Across the U.S., real estate commission varies by location and between individual agents. Currently, the average real estate commission rate nationwide is 5.50% of the home's final sale price. This fee is typically split equally between the listing and buyer's agents who handle the transaction, and comes out of the seller's proceeds.
If you're selling your home, realtor fees will make up the bulk of your costs. Due to this, consumer advocates argue that real estate commission is both too expensive and too confusing in its current structure.
Plus, although commission is theoretically negotiable, real estate agents are often reluctant to budge on fees. In a survey of 200 agents, the Consumer Federation of America found that 73% of agents say they won't negotiate their commission.
Thankfully for consumers, the old commission model appears to be on the brink of sweeping change. Class action lawsuits, antitrust lawsuits, and emerging real estate business models are transforming the percentage realtors usually make on a sale.
For example, Clever negotiates low commission rates for home sellers. Our partner agents provide full service support while charging low listing fees of just $3,000 or 1%, instead of the typical 2.5-3%! With Clever Cash Back, eligible buyers can receive a refund of 0.5% of the purchase price at closing.
What percentage do real estate agents make?
While realtor commission fees vary regionally, the average seller can expect to pay between 4.53% to 6.48% of the home's final sale price, according to our research. The U.S. average is currently 5.50%.
The listing agent usually receives 2.79% of the proceeds. The remaining portion of the commission fee — 2.71% on average — goes to the buyer's agent.
📊 Why do commission rates vary?
Although national averages illuminate trends in real estate commission, they don't tell the whole story.
Local market conditions — as well as individual realtors' rates — can impact what you'll pay. For example, the average total commission in New Hampshire is just 4.83%, while rates in New Mexico are 6.21% on average.
No matter where you live, we recommend interviewing multiple agents and checking out low commission real estate companies (like Clever!) to find the best service for the most competitive fees.
Real estate commission, by the numbers
To illustrate how commission costs add up, let's say you sold your home for $250,000.
Under the traditional 6% commission rate, you would pay $15,000 in commission fees. Your listing agent would split this fee with the buyer's agent, so each would receive $7,500.
Now, let's compare that to what you'd pay a low commission real estate agent. If you paid 4% commission (1% listing fee, plus 3% buyer's agent commission), the total would be $10,000. You'd save $5,000!
Who pays realtors?
Traditionally, the seller pays the full commission fee to their listing agent. The specific details of your realtor's commission will be explained in your listing agreement (the contract that you sign with your agent).
From there, the listing agent will split a portion of the commission — typically half — with the buyer's agent. In most cases, both agents share a portion of their commission with their brokers.
🔎 Why does the seller pay buyer's agent commission?
Offering a competitive buyer's agent commission is an important way to attract attention to your listing.
Think of it this way: if you're planning to pay less than the typical 2.27% to 3.19% buyer's agent commission, local realtors might be less motivated to show your home to their clients. After all, they'd stand to earn less money from the sale!
How much do real estate agents make on commission?
On paper, listing agents receive $6,760 to $9,836 from the average home sale, while a typical buyer's agent commission ranges from $6,781 to $9,549. However, the average realtor's take home pay in the U.S. is only around $5,008.
This is obviously much less than the commission fees you'll pay at closing. Most real estate agents work through a brokerage, such as Keller Williams, Coldwell Banker, or RE/MAX. Because brokerages cover certain overhead costs, agents are required to pay them a portion of their commission after the sale closes.
An agent's exact take home pay depends on the agreement they've worked out with their brokerage. In general, more experienced agents keep higher percentages of their commission than less experienced ones.
Take home fees for the average sale*
🧑 Listing agent
$4,056 to $5,900
$2,704 to $3,934
💰 Total listing fees
$6,760 to $9,836
*Estimates for 2021
Can you negotiate realtor commission?
In theory, realtor fees are negotiable. But in practice, agents are often unwilling to budge on their rates.
There are a few situations that will give you a better chance of negotiating commission:
- Buying and selling with the same agent
- Agreeing to dual agency
- Selling in a highly competitive seller's market with limited inventory
In the first two cases, one agent will be able to collect both a listing fee and buyer's agent commission. Because the agent stands to earn more, they may be willing to offer a discounted rate.
Or, if you're in a very competitive market, you may have more power to negotiate lower rates. However, agents are under no obligation to agree to your terms, and many simply say no.
» LEARN: How to Negotiate Realtor Commission
Although it can be difficult to negotiate realtor commission on your own, Clever makes it easy to secure a discounted rate — without compromising on service. The typical Clever seller pays just $11,083 in commission, saving an average of $5,357!
Washington Post. "DOJ agreement requires Realtors to offer transparency on real estate commissions." Accessed July 20, 2021. Updated November 24, 2020.
Consumer Federation of America. "Hidden Real Estate Commissions: Consumer Costs and Improved Transparency." Page(s) 2. Accessed July 20, 2021. Updated October 2019.
New York Times. "July 20, 2021." Accessed July 20, 2021. Updated October 9, 2020.
Axios. "Showdown over real estate fees." Accessed July 20, 2021. Updated February 4, 2021.
Why do realtors get 6% commission?
Traditionally, you'll pay 6% commission in exchange for your listing agent selling your home and the buyer's agent securing a buyer. The full commission is split between the listing agent, the buyer's agent, and both agents' brokers. However, commission rates vary regionally and by agent.Learn more about average commission costs near you.
How can I find agents who charge lower commission rates?
Today, a growing number of real estate companies can help home sellers save on commission. Instead of paying the typical 6% commission, you can pay as little as 4% commission to sell your home. On a $350,000 home, this could save you up to $7,000 in realtor fees! Ready to save? Find the best low commission real estate brokers near you!