California real estate commission: rates, fees, and what to ask

An average from a survey describes that survey's sample, not a fee schedule for your sale. Before using a published number, check its date, location, sample size, and whether it combines listing-broker and buyer-broker compensation. This guide does not claim a statewide average without a current, verifiable dataset.

For a decision you can act on, request written proposals for the same property and services. Compare the listing brokerage's fee, any proposed buyer-broker contribution, and other selling costs separately. A lower percentage alone does not tell you which proposal fits your needs.

California has no legally mandated commission percentage. Each brokerage can propose its own fees, and clients can discuss the terms before agreeing to them. An advertised average does not determine what you owe.

What a brokerage charges reflects the services it provides, the property, the market, and the agreement reached with the client. Because rates are negotiable, they are worth discussing directly and in writing before you sign a listing or representation agreement.

Following a national settlement involving the National Association of REALTORS®, practice changes took effect in August 2024 that affect how compensation is handled. Two are especially relevant to California consumers.

Under the NAR practice changes, offers of buyer-broker compensation are no longer communicated through the MLS. MLS participants working with a buyer generally need a written agreement before touring a home together, including a live virtual tour. Attending an open house independently does not itself trigger that requirement.

Compensation itself was not eliminated or capped. Sellers may still agree to contribute toward a buyer's broker compensation, and that can be negotiated within the purchase agreement or through other permitted means. What changed is where and how those offers are communicated, and how clearly the buyer's own arrangement is documented.

California's AB 2992 took effect January 1, 2025. The DRE explains that a buyer and buyer's agent must enter into a buyer-broker representation agreement as soon as practicable and no later than execution of the buyer's purchase offer. This state requirement is separate from the earlier touring requirement under applicable MLS rules.

The agreement addresses compensation, services, when payment is due, and expiration. Ask your broker to explain the duration, renewal requirements, and any exception that applies to your circumstances before you sign.

For a percentage fee, multiply the sale price by the agreed percentage divided by 100. At a hypothetical $800,000 sale price, each percentage point equals $8,000. This is arithmetic to compare proposals, not a suggested commission rate or an estimate of the statewide average.

Calculate each separately agreed fee only once. Then subtract loan payoff and the other transaction costs to estimate proceeds. For a flat fee, use the actual written amount and check which services or expenses are additional.

The listing agreement sets the total compensation to the listing brokerage, the length of the listing period, and what happens if the property does not sell. Read it as a contract rather than a formality, and ask for anything unclear to be explained in writing.

It is also reasonable to ask how the fee relates to the marketing and services actually delivered, and how the brokerage would handle a buyer who is unrepresented.

Because buyers now sign a written representation agreement up front, it is important to read what it says about compensation, duration, and scope. The agreement will state what the buyer's agent is to be paid and how that amount is satisfied.

In practice, a seller contribution may cover some or all of that amount, but that is negotiated on the specific transaction and is not guaranteed. Understanding the arrangement before you tour homes avoids a difficult conversation at the offer stage.

Commission is the largest line item in most California sales, but it is not the only one. Sellers also encounter escrow and title charges, county and in some cases city transfer taxes, required reports, repairs negotiated during escrow, payoff of existing liens, and prorated property taxes.

A net sheet prepared for your specific property and price gives a far more useful picture than a commission percentage alone.