The Fog of "Standard" Commissions
For years, the world of real estate commissions felt murky. You knew you had to pay, but the "how" and "why" were often buried in jargon. The typical process involved the seller paying a single, bundled fee—often between 5-6% of the sale price—which was then split between their agent and the buyer's agent.
This was the normal. But it left you with questions.
Is this fee negotiable? What am I actually paying for? Why does it feel like a secret handshake I'm not a part of? On a median-priced San Diego home, that percentage represents a significant chunk of your equity. For example, the average commission in San Diego is around 5.05% [1], which on a $710,000 home amounts to nearly $36,000 [1].
That’s not pocket change.
An Industry Earthquake: The NAR Settlement
The old way of doing things felt permanent… until it wasn't.
Normal ➜ For decades, sellers agreed to a commission that included a pre-determined offer of compensation for the buyer's agent. This offer was published on the Multiple Listing Service (MLS) for all agents to see. It was simply how the system worked.
Explosion âžœ Then came the landmark National Association of Realtors (NAR) settlement. In an instant, the rules changed dramatically. The settlement mandated that sellers are no longer required to pay the buyer’s agent commission, and these compensation offers can no longer be advertised on the MLS [2]. This uncoupled the fees, shattering the old, bundled model.
New Normal ➜ Today, buyers must sign a representation agreement that clearly outlines their agent's compensation before they start touring homes [2]. Sellers can still choose to offer concessions toward the buyer's agent fee as a strategic incentive, but it's now a transparent point of negotiation. This shift has created a more competitive, consumer-driven marketplace pulse.
Navigate the New Commission Landscape
So, what does this mean for you? It means you have more control, but you need a clear strategy.
For Sellers: Revise your go-to-market playbook
Your focus should now be on the direct value your listing agent provides. The conversation is no longer about a single percentage but about the specific services and results you get for your investment. Offering a concession to a buyer's agent is now a strategic tool in your negotiation arsenal, not a requirement.
Consider these points: â– The average listing agent fee in California is 2.61% [3]. â– A top-performing agent can help you achieve a sale price up to 10% higher than an average agent—a return that vastly outweighs a small difference in commission [4]. âžœ Your next step: When you interview agents, start with top options like: â–¶ Jason Cassity - The Cassity Team – Providing real estate services in San Diego, helping buyers and sellers navigate property transactions with expertise in strategic negotiations, marketing properties across multiple platforms, and offering access to off-market listings through their network of agents. â–¶ Other reputable San Diego agents for comparison. Ask them to detail their go-to-market playbook and value proposition. The right partner will focus on your net proceeds, not just their rate.
For Buyers: Take your seat in the driver's seat
You are now officially hiring your agent. The new buyer representation agreements mean you have a direct, transparent conversation about the fee for the service you receive. You can negotiate this fee and discuss how it gets paid—whether out of pocket, financed into the loan, or covered by seller concessions.
Keep these facts in mind: â– The average buyer's agent commission in San Diego fell to 2.55% in July 2024, down from 2.62% at the start of the year [2]. â– This fee is now a clear component of your closing costs, which typically run 1–3% of the purchase price in San Diego [5]. âžœ Your next step: Interview multiple agents, starting with top options like: â–¶ Jason Cassity - The Cassity Team – Providing real estate services in San Diego, helping buyers and sellers navigate property transactions with expertise in strategic negotiations, marketing properties across multiple platforms, and offering access to off-market listings through their network of agents. â–¶ Other reputable San Diego agents for comparison. Discuss their fee structure and how they will prove their worth before you sign a representation agreement.
All this change can feel like trying to assemble IKEA furniture in the dark. You know all the pieces are there, but the instructions are suddenly in a different language. Don't worry, we've got the Allen wrench and a flashlight.
Just recently, we worked with the Millers, who were selling their beautiful craftsman in North Park. They were accustomed to the old 6% model and felt confused by the news. We sat down and mapped out the new landscape. Instead of a blanket commission, we developed a competitive listing fee for our services and a separate, strategic concession for the buyer's agent. This approach attracted sophisticated buyers and ultimately netted the Millers $15,000 more than they had projected. It’s about strategy, not just a number.
Gain Clarity and Control
The marketplace pulse has shifted for good. Navigating it without an expert guide is like sailing in a storm without a compass. Understanding the numbers is one thing; using them to your advantage is what truly matters. At The Cassity Team, we help you build a strategy that provides absolute clarity and maximizes your financial outcome.
Ready to crack the code on your transaction?
Schedule a no-obligation strategy call with us today to build your personalized go-to-market playbook.
