Real Estate Terms Every LA Home Seller Should Know

A cash home offer is a written proposal from a buyer who intends to purchase real property without financing — meaning no mortgage contingency, no lender appraisal, and no loan approval period. In Los Angeles, cash buyers are typically private real estate investors, family offices, or institutional buyers who hold liquid capital specifically for direct acquisitions.

A cash offer simplifies the transaction significantly. There is no risk of the deal falling through due to loan denial, and the closing timeline compresses from the typical 30–45 days to as few as 7–14 days. Cash buyers generally purchase homes as-is, meaning the seller is not required to make repairs or improvements prior to closing.

The trade-off is that cash offers often come in below full market value — the discount reflects the buyer's speed, certainty, and the cost of any repairs they will fund after purchase. In California, all cash purchase agreements must still go through escrow and comply with standard seller disclosure requirements under California Civil Code.

A 1.5% commission listing is a full-service residential real estate listing agreement in which the seller's listing agent charges 1.5% of the sale price, rather than the market-standard 2.5%–3%.

In Los Angeles, a typical seller pays the listing agent approximately 2.5%–3% of the sale price. On a $900,000 home, a 3% listing commission equals $27,000. A 1.5% listing agent charges $13,500 for the same service — saving the seller $13,500 that goes directly into their pocket.

A reduced commission rate does not necessarily mean reduced service. Many agents can profitably list homes at 1.5% when they operate efficiently through referral pipelines and proven systems. Before signing any listing agreement, verify that the 1.5% rate covers MLS listing, professional photography, open houses, offer management, and full contract negotiation.

Note: the buyer's agent commission (typically 2%–2.5%) is a separate fee and is not included in the listing commission. Both are visible in the Smart Sell LA savings calculator.

Off-market real estate refers to properties that are sold or under contract without being publicly listed on the Multiple Listing Service (MLS) or popular consumer portals like Zillow, Redfin, or Realtor.com.

In Los Angeles, off-market transactions occur when a seller wants to avoid public showings, preserve privacy, or move quickly without the complexity of a traditional listing. Cash buyers and private investors typically pursue off-market deals because sellers in these situations are often motivated by speed or circumstance rather than maximizing sale price.

Off-market sales in California still require a standard purchase agreement, escrow, title insurance, and full seller disclosures under California Civil Code — the "off-market" designation refers only to public visibility, not legal requirements.

Off-market deals can benefit sellers who prioritize certainty and speed, and buyers who seek to avoid competitive bidding situations. They generally result in a lower sale price than a fully-marketed listing.

In a real estate transaction, a principal buyer is a party who purchases the property for their own account, using their own capital or financing. They assume ownership and all associated risks, costs, and responsibilities at close of escrow. Principal buyers include individual homebuyers, private real estate investors, and institutional buyers (like iBuyers).

A real estate agent or broker is a licensed professional who represents one or both parties in the transaction but does not take title to the property. Agents earn a commission — typically a percentage of the sale price — for facilitating the transaction on behalf of their client.

The distinction matters when evaluating a cash offer: when a private investor makes a cash offer, they are acting as a principal buyer — they will own the home after closing. They are not acting as your agent or representative.

The buyer's agent commission is the fee paid to the real estate agent representing the buyer in a home purchase transaction. This is a separate fee from the listing agent's commission — both are typically paid from the seller's sale proceeds at closing.

Historically in California, the combined seller's agent (2.5%–3%) and buyer's agent (2%–3%) commission totaled 5%–6% of the sale price. On a $900,000 LA home, that's $45,000–$54,000 in total commission paid by the seller.

Following the 2024 NAR settlement, sellers are no longer required to offer buyer's agent compensation through the MLS. Buyers and their agents must now have a signed buyer representation agreement specifying compensation before touring homes. In practice, many LA sellers still offer buyer's agent compensation (typically 2%–2.5%) to attract offers from buyer-represented clients.

Smart Sell LA's savings calculator uses a default buyer's agent estimate of 2.5% in its net proceeds calculation, so you always see your true take-home number — not just the listing commission savings.

Escrow is a legally required process in California residential real estate in which a neutral third party — the escrow company — holds all funds and documents until every condition of the sale has been satisfied. California requires escrow for all residential property transfers; unlike some other states, California uses licensed escrow companies rather than attorneys to handle the closing process.

Once both buyer and seller have signed the purchase agreement, the escrow company receives the buyer's deposit, coordinates with the title company to clear any liens or encumbrances, collects remaining purchase funds, ensures all disclosures and contingencies are resolved, and ultimately disburses proceeds to the seller.

Escrow fees in Los Angeles typically range from $1,500–$3,000 depending on the sale price and are generally split between buyer and seller, though this is negotiable. The timeline differs significantly by transaction type:

• Financed transaction: 30–45 days (lender underwriting drives the timeline)
• All-cash transaction: 7–14 days (no lender involved, faster title clearance)

The post-NAR settlement refers to changes in U.S. real estate industry practices that took effect following the August 2024 settlement of the Sitzer/Burnett class-action lawsuit against the National Association of Realtors (NAR) and several major brokerages.

The core change: Sellers are no longer required to offer compensation to a buyer's agent through the MLS (Multiple Listing Service). Additionally, buyers must now have a signed buyer representation agreement — specifying their agent's compensation — before their agent can show them a home.

Previously, the standard practice was for sellers to pre-commit to paying both their listing agent and the buyer's agent (combined 5%–6%) via the MLS listing. The settlement removes that requirement, giving sellers more room to negotiate total commission costs.

What the settlement did NOT do: It did not cap commissions or set new rates. Agents can still charge whatever rate they and the seller agree to. The change is about disclosure and payment structure — not price.

For LA homeowners, this creates a real opportunity: sellers can now more aggressively negotiate listing commission rates, offer a competitive buyer's agent fee separately, and keep significantly more from the sale. Smart Sell LA's 1.5% network agents are designed specifically for this post-settlement environment.