If you’ve considered a career in real estate or are simply curious about how real estate agents earn their income in California, you’re not alone. This blog answers the question, “What is the average real estate agent commission in California?” We’ll explain how commissions are calculated and paid and why choosing a real estate career can be financially rewarding—even for beginners. By the time you’re done reading, you’ll understand what percent real estate agents make in California and learn how to kickstart your career.
Key Takeaways
- Typical Commission: Real estate agents in California generally earn 1.5% to 2% of a home’s sale price after commission splits.
- Average Sale Example: On a $788,920 home (California’s average), that equals $11,830 to $15,780 per transaction.
- Total Commission Rate: The standard real estate commission is around 5.14%, which is typically split between the buyer’s and seller’s agents and their brokerages.
- Who Pays: Traditionally, the seller covers commission, but recent legal changes may require buyers to pay their agent’s commission in some cases.
- When It’s Paid: Commission is paid at closing once the transaction is finalized.
- Income Potential: Full-time California agents earn about $200,000 per year on average, depending on market, effort, and brokerage agreements.
How Real Estate Commission Works
Most real estate agents do not receive a fixed salary; instead, they earn income through commissions based on the properties they sell or help clients buy. While this compensation structure can feel uncertain to some, it also presents a powerful opportunity for those who are self-motivated and entrepreneurial. With no cap on earnings, agents can directly benefit from their hard work, negotiation skills, and ability to build strong client relationships—making real estate a potentially lucrative career for those willing to invest the effort.
What percent do real estate agents make in California?
Real estate commissions are negotiable and depend on your local market, the type of property sold, the value you offer, and your negotiation skills.
According to a survey by FastExpert, the average real estate commission in California is 5.14%. However, this commission is split among several parties, namely the buyer’s agent, the seller’s agent, and their respective brokerages.
How is real estate commission calculated?
Real estate commission is calculated as a percentage of the final home sale price. The average home value in California is $788,920 (Zillow 2025), so here’s an example of how the commission is calculated from a typical sale, where the seller agrees to pay a 5.14% commission to real estate professionals involved in the transaction.
- $788,920 sale price x 5.14% = $40,550 commission
This commission may be shared with the buyer’s agent, depending on the agreement the buyer and seller make with their agents. In some cases, this commission is split evenly between the two professionals.
- $40,550 / 2 = $20,275
In addition, an agent shares a portion of their income with their brokerage. Even if you negotiate a 50/50 split with your brokerage, you can still earn between $11,830 and $15,780 for a $788,920 property.
Who pays the commission?
Traditionally, buyers didn’t directly pay their agent’s commission. Instead, the seller factored commission costs into the home’s sale price, which then covered the fees for both the listing agent and the buyer’s agent. However, recent legal developments have changed this structure in some situations.
Now, buyers may be responsible for paying their agent’s commission directly, depending on the circumstances of the agreement. This shift means it’s essential for buyers to clarify the commission terms with their agent upfront and factor these potential costs into their home-buying budget. While sellers may still cover these costs in some cases, buyers should no longer assume it’s a given.
This change amplifies the importance of transparency during negotiations and highlights the need for buyers to work with agents who provide clear value and advocacy throughout the process.
How is the commission paid?
Commissions are paid at closing, and the payment is dependent on the successful completion of the property sale. Once the buyer and seller have finalized the transaction, the escrow service handles the distribution of funds, ensuring both agents and brokers are compensated.
What does the commission cover?
Commissions aren’t just payments for showing homes or staging photos; they represent the many services both agents and brokers provide. Here’s what commissions cover:
- Market Expertise: Real estate agents do market research, evaluate competition, and set pricing strategies.
- Marketing Costs: This includes photography, online listings, virtual tours, and physical staging.
- Negotiation Expertise: Agents negotiate on behalf of clients to secure optimal terms.
- Administrative Support: Agents manage most of the transactional details, from paperwork to property disclosures.
Ultimately, commissions are a reflection of the value agents provide during the complex process of buying or selling a property.
California Commission and Income Insights
Now that you understand how the commission structure works and you know the answer to “What percent do real estate agents get?” let’s look deeper into the income statistics of California real estate agents.
How much does a real estate agent make per month?
According to the 2025 California Real Estate Salary Guide produced by Allied Schools, the average real estate agent income in California is around $200,000 per year, meaning agents working full-time can expect to earn approximately $16,600 per month.
It’s worth noting that it may take time for you to earn this impressive income. Most real estate agents have savings or another source of income when they start, as they are unsure how much they will make the first year.
Negotiating your commission rate
A real estate agent’s commission rate is negotiable with clients. Learning the skill of negotiation is critical, not only for making deals but also for advocating for what you’re worth. Clients are willing to pay higher commission rates when they see:
- Local market expertise
- A professional track record
- White glove service
What factors determine how much a real estate agent makes?
Other factors determine how much you’ll make as a real estate agent.
- Local Market Conditions: The real estate market where you work plays a significant role. High-demand areas like Los Angeles, San Francisco, and San Diego often lead to higher commissions due to elevated property values. Conversely, agents in less competitive or rural areas may see smaller earnings.
- Hours Worked and Effort Invested: Real estate rewards hustle and persistence. Agents willing to put in long hours, attend multiple showings, and stay engaged with clients are more likely to close higher volumes of transactions. The more effort you put into your career, the more it pays off. You can learn more about how the number of hours worked affects a real estate agent’s income by downloading the 2025 California Real Estate Salary Guide.
- Size and Strength of Your Network: Your network can directly impact the number of opportunities you secure. A large sphere of influence—including connections with past clients, business partners, and local communities—increases the likelihood of referrals and repeat business. Smart agents actively cultivate these relationships through excellent service and consistent follow-ups.
- Negotiation Skills: Strong negotiation skills can be a game-changer for your career. Buyers and sellers want agents who can advocate for their interests while securing the best possible deal. By refining this skill, you can build a reputation as a savvy negotiator, attracting more referrals and higher-value clients. Consider taking negotiation workshops or shadowing an experienced agent to enhance your approach.
Understanding commission splits
Your commission split is another factor that determines how much you’ll get paid.
Real estate agents in California must work under a broker. You’ll agree to a commission split when signing on with a brokerage. In return for a share of your income, your brokerage will oversee your transactions and may provide office space, marketing tools, training, and mentorship opportunities.
Some brokerages offer caps, which means that after earning X amount, you can keep the rest of the commissions earned that year.
Why Choose a Real Estate Career in California?
The high cost of living and booming housing market provide California agents with some of the highest earnings in the industry. But beyond financial incentives, becoming a real estate agent means:
- Helping clients buy or sell their dream homes
- Building your schedule around your personal goals
- Unlimited earning potential with no salary cap
Choosing a career in real estate in California is not just financially rewarding but also personally fulfilling. With the proper preparation, persistence, and training, you can position yourself as a highly skilled agent who helps clients while achieving your own career goals.
Looking to launch your real estate career? Allied Schools provides online pre-licensing courses to prepare you for success. Learn at your own pace or from a livestream classroom and get access to additional resources designed to help you hit the ground running in California’s competitive real estate industry.
Disclaimer: The salary guide mentioned in this article is for general informational purposes only, based on an August 2024 survey of Allied School alumni and publicly available industry sources. While Allied Schools strives for accuracy, we make no guarantees regarding the completeness, reliability, or applicability of the information. Earnings and outcomes vary widely based on factors like location, experience, and market conditions and should not be considered guarantees. This guide does not constitute professional advice. Users should consult additional sources for personalized guidance.
