6% Real Estate Commission Explained

Ashley Simon's Photo
By Ashley Simon Updated March 24, 2023

SHARE

Young couple shakes hands with a real estate agent at the closing table

Typical realtor commissions | How to save thousands on realtor fees | Why would a realtor accept a lower commission? | Are 6% commission real estate agents worth it? | FAQ

Will the NAR lawsuit change how real estate commission works?

A November 2023 lawsuit found the National Association of Realtors (NAR), Homeservices of America, and Keller Williams Realty guilty of misleading sellers into paying high realtor fees.     

The judge agreed with the plaintiffs that sellers should not be on the hook for the buyer's agent commission. It's too early to tell if this decision will change how buyer's agents are paid. We're monitoring the appeal in this case as well as other lawsuits and will keep you updated. 

» READ MORE:

What is a 6% real estate commission?

A 6% real estate commission is when a seller pays a total of 6% in realtor fees on the sale of their home. This usually means paying 3% to the listing agent and 3% to the buyer's agent.

For example, if you sell a $500,000 home at a 6% commission rate, you'd pay a total of $30,000 in realtor fees:

6% commission on a $500,000 house
Fee Cost
Listing fee (3%) $15,000
Buyer's agent fee (3%) $15,000
Total 6% commission cost $30,000
Show more

Why do realtors get 6%?

A 6% real estate commission has long been considered the industry standard.

Listing agents earn their 3% for helping the seller price their home accurately, prep it and market it to potential buyers, negotiate favorable contract terms, and navigate the closing process. Buyer's agents earn their 3% for bringing a qualified buyer to the sale.

But in today's market, many sellers pay less than 6%. On average, U.S. home sellers pay 5.49% in real estate commissions.[1]

And there are ways you can pay even less — as low as 1.5% in listing fees — while still getting full service from a top local agent.

How to pay less than 6% in realtor fees

You can save on real estate commissions in several ways. The best methods allow you to pay reduced fees without sacrificing service and support from your agent.

Here are some of the most common ways to save on realtor commissions:

  1. Work with a company that offers built-in savings
  2. Negotiate with your agent
  3. Sell your home for sale by owner (FSBO)

1. Work with a low commission realtor

The most reliable way to save money on realtor fees is by working with a real estate brokerage that offers built-in savings. The best low commission companies offer discounted listing fees in exchange for full service and support from a high-quality realtor.

For example, Clever Real Estate offers a low 1.5% listing fee and matches you with top, full-service realtors in your area.

On a $400,000 home sale, you'd save $6,000 with Clever compared to what you'd pay with a 6% commission real estate agent!

You can interview as many agents as you'd like from well-known brokerages like Coldwell Banker and Century 21. Or you can walk away at any time with no obligation.

👋 Get a better agent AND bigger savings

Why pay more in commission fees for less service? Clever offers you bigger savings without sacrificing the service you expect from a traditional realtor.

With Clever:

 ✅ You'll only pay 1.5% to list your home

 ✅ You'll work with a full-service realtor from a top broker

 ✅ It's free, with zero obligation — you can walk away at any time

Saving on realtor fees doesn't have to mean sacrificing service. Find a top local agent today!

2. Negotiate realtor commission

Real estate commissions are technically always negotiable, and it's worth it to try negotiating a lower rate. Even a 1% difference can save you thousands of dollars.

That said, your realtor may not be willing to budge on commission — especially if your home is less expensive than the area average or comparable homes in your area are selling slowly. In addition, many realtors work for brokerages with set minimum requirements, so your agent may not be able to lower their commission.

» MORE: 10 tips for how to negotiate realtor commissions

3. Sell your home for sale by owner (FSBO)

You can avoid paying a listing fee by selling your home without an agent. But that means you'll handle the entire sale process yourself, including setting a listing price, marketing to potential buyers, and navigating negotiations and closing. While the potential savings are real, there are quite a few risks involved with selling FSBO.

» MORE: How to sell your house for sale by owner

How does a 6% real estate commission work?

A 6% real estate commission is typically divided 50/50 between the two agents involved in the sale: the listing agent gets 3% and the buyer's agent gets 3%.

Each agent usually splits half their commission with their brokerage, so the agents might walk away with just 1.5% each.

The seller is generally responsible for paying the entire 6% commission fee. This fee usually comes out of the sale proceeds at closing.

If the real estate agents charge you a 6% real estate commission rate, here's how much you'd pay at different home price points:

Home price 6% real estate commission
$100,000 $6,000
$200,000 $12,000
$250,000 $15,000
$300,000 $18,000
$500,000 $30,000
$750,000 $45,000
Show more

What's the average cost for a real estate agent?

Currently, the average U.S. home seller pays an average of 5.49% in realtor fees.

However, real estate commissions are not standardized or set in stone. They're negotiable, and rates can vary by state and city. To find the average commission rate in your area, check out our guide to average real estate commissions by state.



What percentage do most realtors charge?

Traditionally, realtors charge 2.5–3% of a home's final sale price for their services — bringing a seller's total commission costs to 5–6%.

Sometimes one agent earns more than the other. This typically happens when a seller negotiates a lower listing fee or offers a smaller rate to the buyer’s agent.

» MORE: What percentage do real estate agents make?

Why would a real estate agent accept a lower commission?

A real estate agent will generally accept a lower commission only if they think the payday is still worth it. Here are the most common situations where a realtor might accept a lower commission:

  • You're selling an expensive home, and the agent believes it will sell quickly.
  • You can provide repeat business. For example, you're willing to buy a new home with the same agent.
  • The agent already charges discounted rates to attract new business.

It can be difficult for an individual to negotiate lower rates with an agent. The majority of traditional real estate agents (73%) refuse to negotiate their commission.[2] And most realtors who are open to negotiating generally won't reduce their listing fee below 2.5%.

» MORE: What's a fair commission rate for a real estate agent?

If you're looking for a bigger discount, the best way to save money and still receive full service is to work with a company like Clever Real Estate.

Clever pre-negotiates a low 1.5% listing fee with top realtors from brokerages like Berkshire Hathaway and RE/MAX. These agents get new business from Clever at no up-front cost, so they can pass the savings on to you. Interview as many local agents as you want until you find the right fit — or walk away at any time with no obligation.

💰 Never pay the full 6% commission again

The "standard" 6% commission predates the internet, when realtors had to work harder to find clients and potential buyers.

At Clever, we connect top-rated real estate agents with sellers like you at zero upfront cost to the agents — so they’re willing to pass savings along to you.

You get full service for a pre-negotiated low listing fee (1.5% instead of the typical 3% rate), which can save you tens of thousands at the closing table.

Should I use a realtor who charges a 6% real estate commission?

In today's real estate market, most U.S. home sellers can pay less than the full 6% commission fee. Though you may have to pay 6% if you live in a state where the average commission rate is higher, like Kansas and New Mexico.

Any top realtor provides great overall value, offering hands-on support and helping you get top dollar for your home. But you can find a high-quality realtor for a lot less than 6%. We recommend exploring your options so you can find a great agent without overpaying on commission fees.

👉 Jump to: How to pay less than 6% in realtor fees

How to choose a 6% commission realtor

The best way to find a great 6% commission realtor is by interviewing local agents from a few different brokerages. This allows you to compare your options and choose the best fit for your priorities and budget.

We recommend using an agent matching service like Clever or HomeLight to build a list of realtors to interview. These services match you with pre-vetted local agents and tailor their recommendations to your needs.



FAQ about 6% commission real estate agents

Why are realtor commissions so high?

The total realtor commission may seem high, but it's typically split between the listing agent, the buyer's agent, and each of their brokerages. Out of a 6% commission, each agent may take home only 1.5%. If you want to pay less in realtor fees, you can work with a low commission real estate brokerage near you.

Do realtors only get paid commission?

Yes. For most realtors, commission is their only source of income. Traditional realtors work as independent contractors and get paid only when a real estate transaction is successfully completed. However, a few real estate brokerages, like Redfin and Houwzer, pay their agents a set salary instead of commission. Learn more about how realtors get paid.

Does a for sale by owner (FSBO) seller pay realtor fees?

Yes. While you won't pay a listing fee, you'll likely still be responsible for paying a buyer's agent commission (around 2.5–3% of the final sale price). Here's what you need to know before you sell your house for sale by owner.

Do buyers pay commission to real estate agents?

No. Sellers are almost always responsible for paying the commission to both the buyer's agent and the listing agent. However, realtor fees are typically paid out of the proceeds of the home sale. Because the buyer pays for the home, they pay for the fees indirectly. Learn more about how realtor fees work.

Are realtor fees included in closing costs?

Yes, if you're a seller, realtor fees are usually part of your closing costs. The commissions are typically deducted out of the sale proceeds at closing. In most cases, you'll pay the total real estate commission fee to your listing agent, who will then split the commission with the buyer's agent. Learn more about real estate closing costs (and what you'll need to pay).

How much is real estate agent commission?

Real estate commission is typically 5–6% of a home's final sale price. The commission is usually split between the listing agent and the buyer's agent, who each charge 2.5–3% for their services. The actual commission you'll pay depends on your market, home price and condition, and realtor. Many real estate agents are offering lower commission rates in response to changing market conditions. Learn what's a fair commission for a real estate agent.

Methodology

Data on commission rates is based on a survey of 630 of our partner agents. The survey asked them to indicate the typical rates for both buyer's and seller's agents in their area.

The data on this page doesn't imply that commission rates are fixed — commissions rates are always negotiable. These figures represent estimates of what home sellers can expect to pay in real estate agent fees.

Keep learning

Article Sources

[1] Clever Real Estate – "Average Real Estate Commission Rates by State". Updated 12/21/2021. Based on a survey of 915 real estate agents.

Better real estate agents at a better rate

Enter your zip code to see if Clever has a partner agent in your area
If you don't love your Clever partner agent, you can request to meet with another, or shake hands and go a different direction. We offer this because we're confident you're going to love working with a Clever Partner Agent.