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California’s Top Real Estate Brokers and Brokerages: Is 3% Listing Fee Justified?

Real Estate

Actually, the average commission charged by a real estate broker in California is 4.90 percent, lower than the national average of 5.49 percent. This means that the listing fee charged by real estate brokers in California is about 2.45 percent and not 3. However, is the listing fee commission charged by the brokers justified? Find the answer at the end of this blog. 

With a 4.90 percent realtor commission, you’ll pay around USD 39,200 in realtor costs to sell a California home valued at USD 800,000, which is a huge amount. In fact, while selling a property, the realtor fee is the most expensive expense. But hey, you don’t have to pay the complete 4.90 percent as there is a way around that. 

You can save hundreds of dollars in commission by employing the services of a flat fee MLS in California that lists your home for a flat charge of around USD 99 to 399 instead of the normal 2.45 percent listing commission in Cal. With a Flat Fee MLS California, you’d pay just USD 20,000 including the full buyer’s agent commission, and taking the most premium flat fee MLS package, amounting to savings of about USD 19,200.

How much is the real estate broker California commission

In California, real estate broker commissions range from 1% to 5% of the final transaction price. A realtor in the United States earns around 5.5% of the final transaction price on average. Again, for the more costly residences of California, the commission can be even lower at around 4 percent, which is way less than the national average!

The commission of a real estate broker in California depends on your mode of home selling. The commission percentage may differ from agent to agent. You can offer a lower buyer’s agent commission if your property is attractive enough to catch the eye of the agent. Alternatively, you may have to offer a bigger piece of the pie to the buyer’s agent if your property is not getting any offers. Then you can always haggle with the agent over the final price until you reach an agreement after she approaches you. 

How is the commission distributed among Californian brokers

The average commission of a real estate broker in California ranges from 1% to 5%, with the commission shared evenly between the listing agent and the buyer’s agent. The average real estate broker commission is split as per the following:

5% real estate commission

2.5% listing realtor commission

1.25% listing agent commission

1.25% listing broker commission

2.5% buyer’s realtor commission

1.25% buyer’s agent commission

1.25% buyer’s broker commission

As the money is split between the buyer’s agent and the broker, the California real estate broker commission is essentially lower. The buying agent can be a non-licensed real estate broker. In such a situation, they will receive the entire 2.5 percent broker compensation.

Costs associated with selling a house using flat fee MLS in California

Okay, so you are convinced that selling your house using flat fee MLS in California is in your best interest. But one question may still arise in your mind: how much exactly does it cost to sell my house FSBO?

Below, we have listed some of the major expenses in selling a house using flat fee MLS in California and their approximate value so that you can decide whether you should take the FSBO route. 

1. Determining sales price: USD 200 to 400

You can’t just set the price of your home. It takes some research and some expert help to do that. It is essential that you set your home’s sales price right because if you set the price too low, you won’t attract any buyers and if you set it too low you miss out on potential gains from your house sale. 

A real estate agent would make a comparative market analysis to break down the costs of properties in your neighborhood to arrive at your house’s listing price. Afterward, you and the agent may decide on a price point that is comparable with the other houses on the market.

But when selling a house on your own, it is completely up to you to fix the selling price. You can take the help of real estate marketplaces like Zillow to check out the sales prices of similar properties in your neighborhood. However, you can’t completely rely on such sites. 

Instead, you can hire a home appraiser, especially if you are unsure about doing your home examination on your own. Hiring an appraiser can set you back by about USD 400 but will provide you with a highly precise estimate of your home’s value. 

2. Hiring a professional photographer: USD 200 to 300

This is one of the must-make expenses if you are selling your home by employing a flat fee MLS in California. Engaging the services of a local photographer helps you in unimaginable ways. 

Even a realtor usually arranges for a good professional photographer to shoot your house and highlight its greatest features.

When selling your home FSBO, ensure that you get photographed both the interior and exterior of your house as well as the porch area. Hiring a professional photographer can set you back by about USD 200 to 300, but it will attract amazingly more home buyers.

3. Marketing your home: USD 150 to 750

Normally, a real estate agent lists your house on the Multiple Listing Service but when you set about selling your house on your own, you have the freedom to market the way you feel right. You could market your home on Craigslist, Facebook, or Zillow for free instead of listing it on the MLS at a charge. However, it is advisable to list your house on MLS for maximum exposure. The flat fee of an MLS service is nothing in comparison to the commission you would pay to a listing agent in case you go the traditional route. 

It can cost you around USD 150 to list your house on the Multiple Listing Service. The listing fee goes up depending on the number of photographs you want to be uploaded and the number of days you want your property to stay listed. 

You can even put yard signs, use leaflets, use social media ads, etc. to market your home. 

4. Drafting a sales contract: USD 250

Numerous types of real estate contracts may be found over the internet apart from the basic California contract. It is critical to use a sales contract that is good and legal. Using non-standard contracts can cause legal problems later.

An expense worth making here is hiring an attorney to create a contract or offer legal guidance on your current contract.

5. Taking your home under warranty: USD 400 to 600

Covering your home under warranty is not mandatory but as a gesture of good faith, you can add a one- or two-year house warranty with the transaction.

Larger components like HVAC, septic, sump pump, and high-end appliances are normally covered by home warranties.

6. Realtor fees: 0% to 2.5% of your home value

Even when you are selling your home by employing a Flat Fee MLS, you still need to pay the buyer’s agent commission. While you are selling your house without the assistance of a realtor to save money, you must expect to pay the buyer’s agent 2 to 3% of the sales price when you list it on the MLS.

Most buyers use MLS to search for a home by taking the help of an agent, and a buyer’s agent doesn’t bring in a buyer to you unless they are getting a good commission. 

7. Closing costs: 2% to 4% of your home’s value

Closing expenses in California may vary based on where you live. Closing costs stay the same even when you are selling a home FSBO. You are required to pay for expenses like transfer taxes, settlement fees, owner title insurance, recording costs, and lenders’ title insurance.

Final word

Finally, selling your house by using a flat fee MLS in California might take a long time. Before deciding to sell your property using for sale by owner websites, you must calculate how much of your time will go into marketing your home, showing your home, and working with an attorney. If you are fine with the costs mentioned above and have time to navigate through the whole process you can do away with the listing fee commission charged by real estate brokers in California. If you come to a conclusion that your time and money are not worth the effort then paying the realtor commission would be justifiable for you.


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