California Real Estate Commissions: What Sellers & Buyers Need to Know (2026 SEO Guide)

Understanding real estate commissions is one of the most important parts of selling or buying a home in California. These fees can significantly impact your net proceeds as a seller or your total cost as a buyer, so it’s essential to know how they work, who pays them, and how they may be changing.

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What Is a Real Estate Commission?

A real estate commission is a fee paid to the agents involved in selling or buying a home. It’s typically a percentage of the final sale price and is how real estate agents get paid for their services — including pricing strategy, marketing, negotiation, paperwork, and closing coordination.
Commission rates are not legally required; all fees are negotiable between you and your agent. (Osborne Home)

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Average Real Estate Commission in California

In most California markets, the total real estate commission tends to range between 5% and 6% of the home’s sale price. This fee is usually split roughly evenly between:

• The listing agent (seller’s agent)

• The buyer’s agent

For example, a 5.18% total commission on a home can equate to approximately half going to each agent. (Bankrate)

Why It’s Not a Fixed Rate

There is no mandated rate in California — commissions vary widely based on:

• Local market conditions

• Pricing strategy

• Agent experience

• Amount of marketing or staging involved

• Competition among agents
  All of these factors can influence whether the total ends up closer to 5%, 6%, or even a negotiated lower rate. (Osborne Home)

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Who Pays Real Estate Commission in California?

Traditionally, the seller pays the total commission, which is then split between their agent and the buyer’s agent. This is the most common arrangement in California housing markets. (HomeLight)

However, recent changes in industry practices (related to National Association of Realtors settlement rules) mean:

• Sellers are no longer automatically required to pay the buyer’s agent’s fee.

• Buyers and buyer agents may negotiate compensation directly.
  Despite this, most sellers continue to offer compensation to the buyer’s agent to attract more buyers and remain competitive. (HomeLight)

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How Commission Is Typically Split

While splits aren’t set in stone, a common example in California is:

• 2.5%–3% to the listing agent

• 2.5%–3% to the buyer’s agent

This adds up to a total commission of about 5%–6%, though rates below or above this range are possible based on negotiation and level of service. (Bankrate)

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Examples by Price Range

Because commission is percentage-based, the dollar amount increases with home price:

Home Price	5% Commission	6% Commission
$500,000	$25,000	$30,000
$800,000	$40,000	$48,000
$1,000,000	$50,000	$60,000

Larger commissions can add up to tens of thousands of dollars — this is why understanding and negotiating your commission is so important. (Bankrate)

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Are Commissions Negotiable?

Yes — all real estate commissions are negotiable. No law in California forces you to accept a specific rate. Some agents are willing to reduce their fees, especially in highly competitive markets or when selling high-priced homes. (HomeLight)

Sellers should always ask:

• What services are included?

• Can the rate be lowered?

• Will additional fees apply (staging, marketing, transaction coordination)?

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How Commission Affects Your Net Proceeds

Because commissions are deducted from your final sale proceeds at closing, they directly reduce your profit. For example:

• A 6% commission on a $900,000 home equals $54,000 in fees.

• Sellers should factor this into pricing and negotiating decisions.

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Tips to Save on Real Estate Commissions

If you’re selling in California and want to reduce fees, consider:
✔ Interviewing multiple agents
✔ Negotiating a lower commission rate
✔ Considering a flat-fee or reduced-service model
✔ Being proactive in marketing your home
Still, keep in mind that very low fees can mean less service or exposure, which could ultimately cost you in price or time on market. (HomeLight)

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Commission Changes in 2024–2025

A major settlement involving the National Association of Realtors changed how commissions are displayed and negotiated, making them more transparent and open to negotiation between buyers and their agents. However, actual average commissions in many markets have remained similar to historical ranges. (Kiplinger)

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Should Sellers Still Pay Buyer Agent Fees?

While sellers are no longer required to automatically cover the buyer’s agent fee under the new settlement rules, many continue to do so because:

• It increases the pool of buyer agents willing to show the home

• It can lead to more competitive offers

• Buyers often cannot afford additional out-of-pocket fees on top of down payments
  If you choose not to offer buyer agent compensation, you must clearly state this in your listing and be prepared for negotiation. (HomeLight)

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Final Thoughts

Real estate commissions in California are negotiable, typically range from about 5% to 6%, and remain one of the largest costs sellers face. Knowing how these fees work helps you plan your sale more effectively, negotiate better terms, and protect your net proceeds.