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  • Writer's pictureDr. Will Puente

Why are Real Estate Commissions and Fees so High in California?

This is a much-loaded question, but it does have some answers.

California Real Estate Brokers and Agents

The California Department of Real Estate administers the tests for the Broker and Agent tests in the state of California. This is widely understood as a very difficult real estate examination than the rest of the states.

For this reason, there are big hurdles for sellers to simply hire a "pass-through" agent. Most Brokers and Agents are not looking to charge a discounted rate for their services.

California Forms and Disclosures

In California, there are plenty of documents to sign as a seller. Most documents are part of the California Association of Realtors (CAR) Zip Form packages in which only Realtors have paid access through CAR.

These are expensive forms for the California Realtor, and they are quite lengthy depending on the transaction. Some compare selling a property in California, as the amount of documents that it takes to apply for a loan on a home.

For this reason, Brokers tend to charge quite a bit for this responsibility.

California Status Symbols

You have seen them on Netflix shows, the image of the California real estate agents. Well, this is at the cost of the seller. Do remember who pays for most commissions throughout the US, the seller and not the buyer.

This image of luxury among California real estate is costly to the seller. So, whenever you see a lavish real estate party in LA or a Halloween Realtor soiree in San Francisco, remember that is more than likely funded with California seller's proceeds.

What can I do to Avoid paying so much for Real Estate Commissions?

Use Flat Fee MLS services that work.

And we mean that they must work, because there are plenty of flat fee services that do not do the appropriate job to close the transactions. So, concentrating on paying the least for commissions may not work as well.

Here, at Flat Fee Close, we make sure you list and close with the compliance needed by California real estate regulations and guidelines. That way you can both save and close effectively.

Watching someone party on your dime hurts most people financially and emotionally.

Dr. Will Puente

CA Broker

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