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Realtor Commission in California


realtor holding keys for new house

It is no surprise that realtor commission in California is one of the most expensive fees you will have to pay when you sell your home in the Golden State. If you are in the market of selling or buying a home in California, you need to know how much commission does a realtor makes in California.

The last thing you want to do is prepare to buy or sell a home just to find out that there is a considerable amount of money that goes to the real estate agent.

If you are looking for more information on the standard commission for a realtor in California, you came to the right place. This brief article will go over the average commission amount a realtor receives in California and ways you can negotiate lower commission fees!

What Is Real Estate Commission?

An agent’s commission in California is a percentage of money earned after the final sale of a home. These commission payments are incentives on top of the salary that these agents receive.

The incentive encourages the realtors to try to close more sales so they can, in turn, earn more commission. There is no limit on how much commission a real estate agent can make, as they have no earning cap in their careers.

What Percent Commission Do Realtors Make in California?

On average, the salary for realtors in California is about $68,000 each year before any commission! The percentage for realtor commission is about 4.92%.

So if your house sells for $700,000, you can expect to pay about $28,000 in realtor fees. The realtor commission rate in California is usually the most significant expense you will have to pay during the home selling process.

What Is the Standard Commission for a Realtor in California?

Although the standard commission percentage is around 5%, the answer is not concrete. The final commission amount ranges between 1% to 6% depending on what is agreed between the seller and the agent. The commission amount is negotiable, but if you are selling high-priced property, you can expect to have to pay between 5% to 6% of the final sale price.

Realtor Commission in California

In a traditional real estate transaction, there are two real estate agents involved. There is usually a listing agent or a real estate agent representing you, the seller, and one for the homebuyer.

The buyer’s agent represents the person purchasing the home. Once the sale closes, both agents earn a portion of the home’s final sale price after closing.

Because there are two agents involved, they both receive a split of the commission price. The listing agent typically takes about 51%, while the buyer’s agent takes around 49%.

Who Pays Realtor Fees?

In California, the house seller typically pays the real estate commission fees out of the final proceeds of the house’s final sale price.

Negotiating Realtor Fees

Regardless of what city your house is in, you have the opportunity to negotiate the price of the typical realtor commission in California. Your negotiation power depends on your current situation and the current housing market.

If you are selling a high-value home and have a great personal relationship with a realtor, you will most likely have an easier time negotiating realtor fees. It is even better if you can provide the realtor with repeat business.

With the housing market, if house values are rising and a few homes are listed for sale, you will also have an easier time negotiating realtor fees. In general, if the market condition favors the seller, the home seller will have more leverage than any buyer and their agent.

How to Judge the Market

To judge the current market of your area, you will want to take a look at a few defining factors. Those factors are months of inventory, sale to list pricing and home value trends.

If these factors favor the seller, you are in a “seller’s market.” A seller’s market makes it so much easier for you to negotiate a lower commission rate on the sale of your home. If the market conditions favor the buyer, you will likely have a more challenging time negotiating lower commission fees.

How to Save on Commission Fees

Popular to contrary belief, there is a way that you can save on those expensive commission fees. An alternative to the traditional homebuying process is utilizing an iBuyer to handle the entire process for you. These companies are drastically changing the real estate industry, offering homeowners a quick and efficient way to sell their homes.

What Is an iBuyer?

An iBuyer is a company that purchases homes from homeowners quickly and efficiently. iBuyer’s utilize technology to generate an all-cash offer on your home.

The entire home buying process is streamlined and available to be completed online. The “i” in iBuyer stands for “instant” or “internet.” This gives the meaning that these companies complete the process online, and most companies can generate an offer for you within 24 to 48 hours.

iBuyer Pricing

iBuyer companies use an automated valuation model, also known as an AVM, to generate the value of your house. iBuyers remove the personal preference and pickiness that comes with traditional home buying, and they give you an offer based on factual data.

iBuyers utilize cutting-edge technology that determines a fair offer for your home based on the market trends in your area. The traditional homebuying process depends on the real estate agent to determine how much your house is worth.

That process can take days, and sometimes the information these agents have can be inaccurate and outdated. iBuyers have up-to-date technology-driven data that can provide accurate and up-to-date offers on your home.

iBuyers vs. Real Estate Agents

Most people assume that iBuyer companies replace all real estate agents, which is far from the truth. iBuyers purchase from sellers who have agents and from sellers who do not have a real estate agent.

Working with realtors is an integral part of the iBuyer process. Many people prefer to work with real estate agents to find their homes, and that is okay. iBuyers will still pay a commission to your agent on your behalf.

How to Sell to an iBuyer

The process may vary depending on the iBuyer company that you decide to work with, but the process is pretty similar regardless of who you pick. The end goal of using this process is to sell your home in a more convenient, easy, and less stressful way.

Request an Offer

Requesting an offer is free and very easy to do. Once you select your iBuyer company, you will submit your information on their website.

You will put in your personal information and answer a few questions about your property. If your house meets the criteria, the iBuyer will send you an offer on your home. Most iBuyers will give you your offer within 24 hours.

Review the Offer

Once you have the offer, you usually have a few days to think about the offer. There is no obligation to accept the offer, so there are no problems if you decide against it!

The offer letter will contain a breakdown of your home’s value, any transaction fees, and all applicable closing costs. The offer will also show you how much you can expect to receive at the close of the sale.

Accept the Offer

If you are happy with the offer, you will let the iBuyer know, and they will start the homebuying process. To ensure that your house matches the information you input online, they will schedule a time to inspect the home.

The appointment time will work with your schedule, and you have the ability to pick the date and time. If there are any repairs needed, the company will let you know before they do anything.

The iBuyer will pay for the repairs and deduct that amount from your net proceeds. You won’t have to worry about these repairs impeding your move-out date. They will handle the repairs after you move out.

Pick a Closing Date

Once the repair kinks have been worked through, you will have the opportunity to select your closing date. Most iBuyers are flexible, allowing you to choose between 14 to 60 days after accepting the offer.

iBuyer Payment

After you close, you can expect to receive a payment within a matter of days. This entire home buying process typically takes a few days versus months with traditional homebuying.

The best part about all of this is there are no out-of-pocket expenses on your behalf. The iBuyer will handle commission fees, inspections, repairs, and any other transactional fees.

All you have to worry about is when you want to move out and where you want to go! The iBuyer company will handle the rest.

Minimizing Realtor Commission in California

Traditional home buying works for some people and can be a stressful and strenuous situation for others. Realtor commission in California is a relatively expensive fee that you will have to take care of if you decide to sell your home the traditional way.

If you are looking for more information on how much your home is worth, submit your address now. Our quotes come with a zero obligation guarantee and are free for you to use.

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