Selling a home in California can be complicated and expensive. One of the biggest costs sellers face is the real estate commission, which typically ranges from 5% to 6% of the sale price.
Before you invest time and money into prepping your house, it’s important to understand how these fees work, who pays them, and how much they’ll impact your bottom line.
In this guide, we’ll break down everything you need to know about California real estate commission rates in 2025 and how Osborne Homes offers a commission-free, stress-free alternative for sellers who want to avoid the traditional process.
What Is the Real Estate Commission in California?
The real estate commission in California is a fee paid to agents for helping buy or sell a home. It’s typically calculated as a percentage of the final sale price and paid at closing.
In most cases, the California real estate commission ranges from 5% to 6%, with the total amount split between the buyer’s and seller’s agents.
There is no standard or legally required commission rate in California. All fees are fully negotiable between the seller and their listing agent.
How Does Real Estate Commission Work in California
In most California home sales, the total real estate commission ranges from 5% to 6% of the final sale price. A recent survey found that the average commission in California is 5.18%, typically split between the buyer’s agent and the seller’s agent.
For example, on a $700,000 home with a 6% commission, you’d pay $42,000 in fees before factoring in additional closing costs or expenses like repairs.
Who Pays Real Estate Agent Fees in California?
In most California home sales, the seller pays the full commission, including the buyer’s agent. This surprises many homeowners, but it has long been the industry standard.
While new rules introduced in August 2024 require buyers to negotiate and agree on fees with their agents upfront, many sellers still offer to pay the buyer’s agent commission. This is because it helps make their home more appealing in a competitive market.
Importantly, this commission doesn’t come out of pocket. It is deducted from your proceeds at closing, which means it directly reduces your net profit from the sale, even though you don’t write a separate check.
California Real Estate Commission by Market
Here’s how commission fees break down across different California markets:
| City | Median Home Price | 5% Commission Fee | 6% Commission Fee |
| Los Angeles | $852,190 | $42,610 | $51,131 |
| San Francisco | $1,600,000 | $80,000 | $96,000 |
| San Diego | $1,040,000 | $52,000 | $62,400 |
| Sacramento | $550,000 | $27,500 | $33,000 |
| Fresno | $442,850 | $22,143 | $26,571 |
| San Bernardino | $490,000 | $24,500 | $29,400 |
| Riverside | $646,840 | $32,342 | $38,810 |
Data compiled from California Association of Realtors and recent market surveys
How Much Do Real Estate Agents Make in California?
Although it may appear that each agent earns 2.5% to 3% of the sale price, they don’t keep the full amount. Most agents work under a brokerage and split their commission. Common splits are 70/30 or 80/20, and in some cases, new agents may agree to a 50/50 split.
For example, on a $700,000 home with a 3% commission ($21,000), an agent might take home only $14,000 or less after sharing their earnings with the broker.
Additional Costs Agents Cover
Real estate agents also pay for many business expenses out of pocket, including:
- Marketing costs such as photography, staging, and signage
- MLS fees and membership dues
- Licensing, insurance, and continuing education
How Income Varies Across California
Agent earnings vary significantly by location and experience. High-performing agents in Los Angeles, San Francisco, or San Diego often earn more due to higher home prices and deal volume, while agents in smaller markets like Fresno or Bakersfield tend to make less.
According to recent data, full-time real estate agents in California earn an average annual income of around $200,000, though this figure can fluctuate widely based on market conditions.
Are Real Estate Commissions Negotiable in California?
Yes, real estate commissions are fully negotiable in California. According to the California Association of Realtors’ standard listing agreement:
“The amount or rate of real estate commissions is not fixed by law. They are set by each Broker individually and may be negotiable between Seller and Broker.”
Despite this, many sellers don’t realize they can negotiate, or they hesitate to challenge what feels like a standard rate. After all, when you’re working with a seasoned real estate professional, it can feel uncomfortable to question their fee.
But as home prices rise and selling costs add up, more homeowners are starting to question whether they really need to pay 5% or 6% in commission.
The truth is, California real estate commissions have always been negotiable, even if most sellers never take advantage of that flexibility. Whether it’s uncertainty, time pressure, or simply not knowing what to ask for, many people settle for the default without ever exploring their options.
6 Tips for Negotiating a Lower Real Estate Commission
Looking to reduce your commission costs? Here are six practical strategies California homeowners often use to save thousands on real estate fees:
1. Compare Agent Rates Before Choosing
Interview multiple agents and ask for their commission structures upfront. When agents know they’re being compared, many are willing to reduce their rates. Just keep in mind, this process can take time, with several meetings and listing presentations.
2. Consider Flat-Fee or Discount Brokerages
Some brokerages charge a flat-fee or a lower percentage (often 1–2%) instead of the traditional 2.5–3% for listing agents. These services may still offer full marketing support, but they often come with less personalized service and limited negotiation help.
3. Explore Dual-Agency Opportunities
If one agent represents both the buyer and the seller, they may agree to a reduced total commission since they’re earning from both sides. However, dual agency can create potential conflicts of interest, so proceed carefully.
4. List During a Hot Market
In low-inventory markets where homes sell quickly, agents may be more flexible with their rates to secure listings. While this can work in your favor, timing the market is never a guarantee and depends on broader economic conditions.
5. Ask About Bundled Services
Some agents offer bundled packages that include staging, photography, and marketing for a flat fee. While this can lower your overall costs, you may still face the stress of ongoing showings, open houses, and prep work.
6. Leverage Your Property’s Strengths
If your home is in a desirable neighborhood or move-in ready condition, use that to your advantage. Agents know attractive homes are easier to sell and may be more open to lowering their commission. Still, you’ll likely need to maintain your property for frequent showings and buyer walk-throughs.
A Simpler Way to Sell Without Paying Commission
Real estate agents offer helpful services like pricing guidance, staging, and negotiation. But even when you successfully negotiate a lower commission, traditional home sales still involve months of uncertainty, constant upkeep, and the risk of deals falling through.
If you’re looking for a more direct and cost-effective approach, selling your home without a realtor may be the right choice.
Here’s what that can look like:
- No Commission Fees: By working directly with a buyer, you can skip the 5–6% agent commission entirely and keep more of your home sale proceeds.
- Faster Sale Timelines: Cash buyers or direct buyers often close in weeks, not months, and don’t require financing contingencies or showings.
- Sell As-Is: No repairs, staging, or open houses. This option is ideal if your property needs work or you simply want to avoid prep costs.
- More Certainty: Skip the last-minute deal fall-throughs and drawn-out negotiations. Direct sales typically offer a more predictable, low-stress experience.
Avoid California Real Estate Commission with Osborne Homes
Commission fees can take a significant bite out of your profits when selling a home in California. While traditional real estate works for some, it often involves months of prep, ongoing showings, and costly agent fees.
If you’re looking for a simpler alternative, Osborne Homes offers a way to skip the commissions, repairs, and delays.
We buy homes directly from sellers, in any condition, and can close in as little as three weeks. There are no fees, no staging, and no surprises—just a straightforward, cash sale that puts you in control of the timeline.
If speed and certainty matter more than navigating the long and expensive traditional process, get a fast, no-obligation cash offer today and move forward without the stress.
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