How Real Estate Agent Commission Works in California

The rules around real estate commission changed in August 2024. If you have not sold a home in several years, the process now looks different from what you may be expecting. Here is what Westside LA sellers need to know about how agents get paid, what the changes mean in practice, and what to ask before you sign any agreement.

This article covers general information about how commission works in California. For questions specific to your legal or tax situation, consult a California real estate attorney.

A settlement with the National Association of Realtors, which took effect August 17, 2024, changed how buyer's agent compensation is handled through the Multiple Listing Service.

Before the change, sellers could offer buyer's agent compensation through the MLS as part of their listing. That was a common practice for decades. After the change, sellers are no longer required to offer buyer's agent compensation through the MLS. The offer, if any, must be negotiated separately from the listing.

Separately, buyers are now required in most cases to sign a written buyer representation agreement before they tour homes. That agreement spells out what the buyer's agent will be paid and by whom.

As a seller, you now have more visible control over what, if anything, you contribute toward the buyer's agent's compensation.

You can choose not to offer any buyer's agent compensation. You can offer a specific dollar amount or percentage as a seller concession. Or a buyer can include a request for seller-paid buyer's agent compensation as part of their offer terms, which you can accept, counter, or decline like any other term.

None of these paths is automatically better. The right approach depends on your property, your market, and the competition you are facing at the time of listing. That decision belongs in the strategy conversation before you go to market, not after an offer arrives.

Commission was always negotiable under California law. The 2024 rule changes made this more visible and explicit, but the underlying principle is the same: there is no mandated agent commission rate. What an agent charges, and what services come with that, are part of the conversation before you sign a listing agreement.

What you should be asking before signing: What is included in the commission? What marketing does this cover? Will I have professional photography, drone and twilight video, and a targeted digital campaign?

Those questions matter more than the commission percentage alone. A lower rate on a flat-service listing can cost you more in net proceeds than a full-service commission with proper marketing. See questions to ask a listing agent before you sign for the full list.

When sellers ask me about commission, the conversation usually shifts to what they are actually getting. The Concierge Standard is the full-service approach I apply to every listing: vendor management for cleaning and repairs, staging I handle myself, professional photography and drone video, the AI-driven digital campaign through The First Key Launch, and coordination from contract through closing. That is not a menu of add-ons. It is the standard.

For a full look at what it costs to sell a home in Westside LA beyond commission, see what it costs to sell a home in Westside Los Angeles. Sellers who have owned for many years are often surprised by the full picture, including transfer taxes, title costs, and escrow fees. It is worth working through all of it before you have a contract in hand.

Before you sign a listing agreement with any agent, ask these questions: What services are included, specifically? What happens if my home does not sell? What is the cancellation policy? How do you handle buyer's agent compensation in the current market?

The answers tell you a lot about how the agent will handle your sale once you are under contract. See what full-service listing representation actually means for a detailed look at what the difference is in practice.

I'm Bobejo Kelley, calDRE 02085097. I work with tenured Westside LA homeowners selling during life transitions, and I give straight answers before anyone signs anything. If you want to understand exactly what I charge, what I include, and how I handle buyer's agent compensation in the current market, let's talk through it. Book a consultation at firstkeypacific.com/contact or email bobejo@firstkeypacific.com. No pressure, just real answers.

Every Playa del Rey sale I take on starts the same way: I see the house, then we talk numbers. Not the other way around. If that is the order you would rather work in, get in touch and I will come and look. First Key Pacific handles the rest from there.