Find An Agent

What Are Average Realtor Fees?

When buying and selling real estate, one of the first things people want to know is how much the realtor fees are. Although this varies by location and realtor, there is a general consensus on what most agents take in commission. Here’s an in-depth guide on how much you can expect to pay on average in realtor fees.
What Are Average Realtor Fees?

When using a real estate agent to facilitate the sale of a home, most people are understandably concerned about the cost of their services. Real estate agents charge a percentage of the total sales price of a home as compensation for their services.

As licensed professionals, real estate agents can help sell your home quickly, and for the highest sales price possible. But with traditional real estate agents charging an average of 6% of the total sales price, is there a cheaper alternative?

Full-service, low-commission real estate agents do precisely what their name suggests — provide the full services of a traditional real estate agent, but for a lower price.

[popup-modal text= “Get in touch”] to learn more about how you can save money on realtor fees.

What are realtor fees?

Realtor fees are the commission that a real estate agent charges for facilitating the sale or purchase of a property. When you hire an agent to help you sell your home, or procure a new one, they typically take a percentage of the sales price as compensation for the services.

These services typically include listing your home on the local MLS and other real estate websites, putting up "For Sale" signs at your home, hosting open houses, distributing marketing materials and email campaigns, negotiating with potential buyers, and preparing the sales contracts.

While you agree on the amount of commission with your listing agent, they will split it with the buyer's agent at closing. The commission rate and how it will be divided is typically outlined in the listing agreement and sales contract.

Do realtor fees cover closing costs?

It is important to note that the realtor commissions do not cover closing costs. For example, sellers also have to pay transfer taxes to transfer the ownership of their home, and title fees such as title insurance, to protect the buyer in case any title issues arise after closing.

Sellers also have other things to consider buyer credits that was negotiated during the sales contract and loan-payoff fees, if your loan terms include one.

Buyers, on the other hand, must consider the costs associated with their financing and purchase of the home, such as the loan origination fee, appraisal, and title insurance to protect the lender.

Another cost for buyers to consider, is the home inspection. A home inspection helps give buyers an overview of the home's condition, and any repairs that may be necessary.

Here are some other closing costs that buyers and sellers should expect to pay at the closing table.

Sellers

  • Title search: Sellers need to prove they are the legal owner of a home before selling it. Title searches establish ownership and that there aren't outstanding liens on the property.
  • Title insurance: The seller and buyer both purchase title insurance for the property. Sellers buy a policy to protect the buyer in case there are title issues after the deal closes.
  • Transfer taxes: Transfer tax is the fee some states charge to legally exchange ownership of property. This varies from state to state and even county to county.
  • Recording fees: Recording fees are typically paid to the local government to record the sale of property.
  • Mortgage prepayment penalty: If you have an existing loan on your home, there may be a prepayment penalty in the loan terms if you pay it off early.
  • Outstanding amounts owed on the property: Outstanding costs such as prorated property taxes, will also be included in sellers closing costs.

Buyers

  • Title search: Sometimes buyers need to cover the title search which ensures that the title of the property you are purchasing is free and clear.
  • Title insurance: If you're financing the purchase of your home, the lender typically requires you to purchase title insurance that protects them from title issues that may arise after closing.
  • Appraisal: Your lender requires you to pay for an appraisal, which is a professional opinion of the value of a home. The result of the appraisal can impact your financing, as your lender will not let you borrow more than the value of the house.
  • Transfer taxes: Depending on where the property is located, buyers may be required to pay the transfer taxes to transfer the ownership of the property from the seller.
  • Recording fees: The county often charges recording fees to record the sale and purchase of real estate.

What are average realtor fees?

Although real estate commission varies regionally, the average real estate commission in the U.S. is 6% of the total sales price. This is split between the listing agent and the buyer's agent, who both usually receive 3%.

It's prudent to note that realtor fees can vary across different real estate markets and between brokerages. Even two real estate agents at the same office can charge separate commission rates, so it's essential to ask agents you're planning to work with how much their services cost.

If you're in a seller's market for example, and agents have to do less to sell your home, agents may offer a lower commission rate to secure your business.

What percentage do most realtors charge?

When you agree to list your home with a real estate agent, you sign a brokerage agreement stipulating the terms of your contract, and the amount of commission the real estate agent will be compensated.

Since the typical real estate commission percentage is 6% of the total sales price, your final price will impact what you pay. For example, according to August 2019 data from Zillow, the median sale price in Nashville, TN. is $270,100. A homeowner could expect to pay $16,206 in commissions out of the profits of the sale. This amount is typically split equally between the listing broker and the agent representing the buyer, so each would earn $8,103.

Are realtor fees negotiable?

Most realtors are receptive to negotiating their real estate commission; however typically they will not go below a total of 5%. As few real estate agents earn a guaranteed salary, they are unlikely to discount their commission unless they have a high volume of sales.

It is also important to note that real estate agents are expert negotiators, and will likely be challenging to negotiate with.

Who pays realtor fees?

Technically the seller pays the real estate commission of both their agent and the buyer's agent. The seller is the one who negotiates the total commission with their agent and it is stated in the listing agreement they sign. At closing, real estate commission is deducted from the sellers gross proceeds, and is split between the listing brokerage and the cooperating brokerage.

It's important to note that when the seller decides on their list price, they typically calculate it to cover the real estate commission. This means that although the real estate commission is classed as a seller's expense, it's actually a cost that the buyer ultimately shoulders via a higher sales price.

Can you save on realtor fees?

There are many alternatives to traditional, full-service agents who charge a 6% commission. One method is to list your home For Sale By Owner (FSBO) and sell it yourself. When you choose to sell your home on your own, you are responsible for setting the pricing and marketing strategy, showing the property to potential buyers, and handling all aspects of the sales process.

Other alternatives include flat-fee MLS listing services, which agree to put your home on your local MLS for a one-off fee. Flat-fee MLS listing services vary in cost, depending on your location and how in-depth the service is.

If you'd like to save money on realtor commission while also receiving excellent service, Clever Real Estate is a discount agent referral brokerage that works with top-performing real estate agents. Clever partners with experienced local agents who have agreed to provide clients with a full-service, personalized listing experience for a flat-fee of $3,000, or 1% if your home is over $350,000 — no negotiation required.

> Get in touch to learn more about how you can save up to 50% on commissions.

FAQs About Average Realtor Fees

How much money do I need at closing?

The amount you need at closing depends on many factors, including whether you're the buyer or the seller, what the sales price of the home is and where the house is located.

In general, sellers can expect to pay around 8% to 10% of the total sales price in closing costs according to Zillow. This includes 6% in realtor commissions.

On average buyers who are financing their home purchase should expect to pay between 2% to 5% of the total sales price in closing costs.

How can I avoid closing costs?

It is impossible to avoid all closing costs, especially if you're working with a lender to purchase your home. However, you can reduce your closing costs by working with a full-service, low-commission real estate agent.

As realtor fees often make up the bulk of closing costs for sellers, you can reduce your costs significantly by working with a flat-fee, or low-commission agent.

Buyers can also benefit by working with an agent who can negotiate a better deal that includes the seller paying more closing costs..

Do realtors make a lot of money?

Realtors typically charge 6% of the total sales price of a property. This is usually split equally between both the listing agent's brokerage and the buying agent's brokerage, with each receiving 3% each. The agent's brokerage then takes their cut and pays their respective agent the remaining balance.

Brokerage splits vary drastically between agents, and can range anywhere from 50% to 0%.

As an example, if a real estate agent sells the average home in Georgia, valued at $190,200, for a real estate commission of 6%, they would be paid $5,706 minus their brokerage fee.

SHARE

Andrew Schmeerbauch
Andrew Schmeerbauch

Andrew Schmeerbauch is the Director of Marketing at Clever Real Estate, the free online service that connects you top agents to save on commission. His focus is educating home buyers and sellers on navigating the complex world of real estate with confidence and ease. Andrew has worked on projects for the United Nations and USC and has a particular passion for investing and finance. Andrew's writing has been featured in Mashvisor, L&T, Ideal REI, and Rentometer.

See all Andrew's Posts
WHAT'S NEXT

Sell Your Home with a Top Agent and Save Thousands

Learn how you could save thousands when you sell with Clever!

whats next house

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.