10/01/2026
There Is No Standard Real Estate Commission
What California Sellers Should Know
Real estate commissions are negotiable.
That isn’t a marketing slogan. It is the rule.
The California Department of Real Estate specifically warns consumers that an agent claiming there is a “standard” commission rate is misrepresenting the law.
DRE states:
“Commissions are fully negotiable under California law.”
NAR’s current policies say the same thing: broker compensation is not set by law and is fully negotiable.
So if you’re selling a home, stop asking:
“What is the standard commission?”
There isn’t one.
Ask instead:
What am I paying, what does it cover, and how will it affect what I net from the sale?
The listing broker’s fee
The listing broker’s fee is the amount you agree to pay the broker representing you as the seller.
It should be clearly established in your listing agreement, along with the services being provided.
That fee directly affects your net proceeds.
For illustration only, on a $700,000 sale:
• A 3% listing fee equals $21,000
• A 2% listing fee equals $14,000
• A 1% listing fee equals $7,000
The difference between a 3% listing fee and a 1% listing fee is $14,000 before considering any other selling costs.
That money remains part of your proceeds rather than being paid as a listing expense.
The sales price matters, but so does the amount you pay to achieve it.
Buyer-broker compensation is separate
Buyer-broker compensation is separate from the listing broker’s fee.
A buyer may ask the seller to contribute toward their broker’s compensation.
The seller can accept, reject or negotiate that request.
It is an offer term — not an automatic listing expense.
Whether a seller should agree to that request is a separate negotiation question. I’ll cover that next week.
My listing fee is 1%
At Park Place Realty, my listing fee is 1% from the beginning.
It isn’t a discount I selectively give sellers who know enough to ask.
It is my fee structure.
Any buyer-broker compensation requested from the seller remains separate from the listing fee and is evaluated as part of the transaction.
And 1% does not mean removing the services sellers should expect from professional representation:
• Pricing strategy
• Marketing
• Negotiation
• Contract management
• Disclosure oversight
• Transaction coordination
The fee is lower by design.
The responsibility isn’t.
Know what you are paying
The U.S. Department of Justice has repeatedly emphasized the importance of competition among real-estate brokerages because competition can reduce prices and improve services for consumers.
For sellers, commission is one of the costs that directly affects net proceeds.
That does not mean choosing a broker based on price alone.
It means cost belongs in the evaluation.
Experience matters.
Negotiation matters.
Marketing matters.
Accountability matters.
And the fee matters too.
Before signing a listing agreement, know:
• What you are paying
• What the fee covers
• What services are included
• What costs remain separate
• How the fee will affect your estimated net proceeds
The goal is to preserve as much of your equity as possible while still getting the job done right.
Before you sign, stop and ask yourself:
How much of my equity am I spending to sell my home?
That is the number that matters.
Full service. 1% fee. By design.
Michelle Arensdorf
831-206-5190
Park Place Realty
Licensed since 1983
BRE #00867211
Sources / Learn More
California Department of Real Estate — Changes to Buyer Representation and Compensation
California DRE Consumer Alert
National Association of REALTORS® — Required Consumer Disclosure: Broker Compensation Is Fully Negotiable
NAR — Compensation and Consumer Disclosure Policy
U.S. Department of Justice, Antitrust Division — Statement of Interest: Real Estate Broker Commissions
U.S. Department of Justice — Statement of Interest
