Real Estate Commissions, Buyer Rebates & Flat Fees Explained | How to Save Thousands
Real estate commissions in California are no longer one-size-fits-all. After the 2024 settlement with the National Association of Realtors, buyers and sellers have more freedom to negotiate how agents are paid. That opens the door to new options like flat fee listings and buyer rebate programs, but also raises an important question: what are you actually getting for the fee you pay?
How commissions worked for decades
The traditional model was simple and familiar. Sellers typically paid 5 to 6 percent of the sale price, split between the listing agent and the buyer's agent. That structure made marketing, cooperation with buyer agents, and compensation predictable across the industry.
What changed after the 2024 settlement
The settlement removed many of the practices that made commission rates effectively fixed. Today:
Commission rates are negotiable in California.
Flat fee listing services and buyer rebate programs are available and more visible.
Consumers can choose a compensation model that fits their goals, whether that is maximum net proceeds, lower upfront costs, or a particular mix of services.
Flat fee listing agents: how they work and when they make sense
A flat fee listing agent charges a fixed price for a defined set of services rather than a percentage of the sale. For example, on a one million dollar home a flat fee might be $10,000 instead of 5 percent, which would be $50,000.
Pros:
Clear, predictable cost.
Potentially large savings on high value homes with straightforward sales scenarios.
Cons:
Services are often limited. Premium marketing like high quality photography, video tours, targeted online advertising, or extensive staging may not be included.
Less flexibility on negotiations and problem solving during escrow if the flat fee scope ends at the sale.
Good fit: sellers with very simple properties, strong local buyer demand, or seller teams comfortable handling many of the tasks themselves.
Buyer rebates: what they are and how to evaluate them
Buyer rebate programs return a portion of the buyer agent commission to the buyer at closing. Companies such as Save Six are examples of services that offer these rebates.
Pros:
Immediate, tangible savings at closing.
Can lower out of pocket costs or increase your down payment budget.
Cons:
Rebates do not replace negotiation, inspection advocacy, or creative financing strategies that a full service agent provides.
An agent focused on earning a rebate may not deliver the same level of attention as one who is fully aligned with a buying strategy that maximizes long term value.
The value of a full service agent
Saving a commission percentage looks good on paper, but the right agent delivers value in ways that often outweigh raw savings.
Professional marketing—high quality photography, video tours, targeted online and offline advertising, and exposure to networks of buyers and agents.
Skilled negotiation—a strong negotiator can add tens of thousands of dollars to your bottom line by structuring offers, leveraging competing bids, and handling repair or credit negotiations.
Contract guidance and risk avoidance—real estate contracts in California are complex. Properly navigating disclosures, inspections, appraisals, and contingencies can prevent costly mistakes.
Emotional support and project management—managing timelines, expectations, escrow tasks, and vendor coordination brings peace of mind during a stressful process.
Do not underestimate the value of a full service agent.
Real world perspective from San Diego neighborhoods
In high value neighborhoods, like La Jolla or Del Mar, flat fee models can look attractive because the dollar savings are large. At the same time, those same areas often produce higher final sale prices when a full service agent positions the property effectively and creates competitive pressure among buyers.
On the buyer side, a rebate check may be appealing, but thoughtful negotiation of repairs, seller credits, and financing terms frequently produces a larger net benefit than the rebate alone.
How to decide: a short checklist for sellers and buyers
Sellers should ask
Exactly which services are included in the fee? Photography, syndication, open houses, staging, and agent showings?
How will the property be marketed to get maximum exposure to the right buyers?
What is the agent’s track record in the neighborhood for sales price to list price ratio and days on market?
What happens if complications arise during escrow? Are additional services included or billed separately?
Buyers should ask
How much is the rebate and are there any conditions?
Will the agent negotiate repairs, credits, or creative financing strategies on my behalf?
Does the agent have experience in the local market and with the type of property I want?
Key takeaways
Commissions are negotiable in California and new models like flat fees and buyer rebates are legitimate options.
Flat fee listings and rebates can produce significant savings in the right circumstances, especially in high value or simple-sale scenarios.
Full service agents offer marketing, negotiation, contract expertise, and support that often save or earn you more than the commission cost.
Compare net proceeds and total value, not just the headline commission number. Ask concrete questions and get the scope of services in writing.
Next steps
If you are buying or selling in San Diego, run the numbers for your specific property and situation. Compare service scopes, expected marketing plans, and likely negotiation outcomes alongside any commission savings. That comparison will show whether a flat fee, a rebate, or full service representation delivers the best net result for you.
