What Percentage Do Real Estate Agents Make

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By Steve Nicastro Updated March 19, 2024

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A realtor's commission from a home sale can vary based on location and the agent's individual agreement. The average real estate commission rate across the United States is 5.49%, split between seller's and buyer's agents, and taken from the sale proceeds. 

Realtor fees greatly impact home sale expenses, making up about 70% or more of the total costs. Critics point out that the current commission model, where sellers cover the buyer's agent's fee, results in higher commission rates in the U.S. compared to other countries.[1]

Real estate commission laws, however, may be on the verge of significant change. A notable legal ruling, awarding $2 billion against top brokerages and the National Association of Realtors (NAR), hints at a shift in the traditional commission structure.[2]

NAR has now settled, agreeing to pay $418 million over four years, without admitting any wrongdoing.[3] While the full impact of the settlement is yet to be determined, experts believe that the change will eventually lead to lower buyer’s agent commissions and give buyers the ability to negotiate those commissions based on the services they need.

Business models like discount brokerages also continue gaining traction, providing sellers with cost-effective alternatives and lowering the total commission paid.

Clever, for example, collaborates with top agents from well-known brokerages to provide sellers with low commission rates. Our partners offer comprehensive services at a reduced listing fee of only 1.5%, a move that disrupts the usual 2.5-3% rates. Find a top real estate agent near you today and save thousands on realtor fees.

What percentage do real estate agents make?

Real estate commission rates vary by state or region. Our findings show that the national average rate is 5.49%, ranging from between 4% to 6%. 

On average, the listing or seller's agent receives 2.83% of the proceeds nationwide. The remaining portion of the commission – 2.66%  – goes to the buyer's agent. 

Similarly, Anywhere Real Estate, the parent company of Coldwell Banker and Century 21, disclosed an average brokerage commission rate of 2.45% for the seller side in its latest quarterly report.[4]

📊 Why do commission rates vary?

Although national averages illuminate trends in real estate commission, they don't tell the whole story.

Rates may vary depending on factors including the property's value (higher priced homes may charge lower rates), the condition and location of the property, complexity or easiness of the sale, and the services provided by the agent. 

For example, the average total commission in Hawaii is 4.78%, while commission rates in West Virginia are 6.67% on average.

Wherever you're based, it's wise to explore your options. Interview multiple agents and consider low commission real estate companies like Clever to secure the best service at the most competitive fee.

Real estate commission, by the numbers

To illustrate how commission costs add up, let's say you sold your home for $500,000. Under the national average 5.49% commission rate, you would pay just over $27,000 in commission fees. Your listing agent would pay out the buyer's agent fee, so each would receive around $14,000.

Let's compare that to what you'd pay a low commission real estate agent. If you paid 4% commission (1.5% listing fee, plus a 2.5% buyer's agent commission), the total would be $20,000, and you'd save $7,000!

💰 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.

Who pays realtors?

The seller pays the full commission fee, divided between the listing agent's brokerage and the buyer's agent's brokerage as outlined in the listing agreement.

After the brokerage receives the commission, it pays out the agents and subtracts any fees associated with the brokerage.

🔎 Why does the seller pay buyer's agent commission?

NAR previously mandated that brokers participating in Realtor-affiliated MLS platforms offer compensation to the buyer's agents. This rule ensures buyer agents are motivated to work with listings on these platforms.[5] 

A competitive buyer's agent fee is crucial for drawing attention to your listing. Offering a commission lower than what's typical in your area could dissuade local realtors from showing your home, potentially slowing down the sale process.

Think of it this way: if you plan to pay less than the typical buyer's agent commission for your area, 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!

However, after the settlement of NAR's lawsuit, the way agents are compensated could see changes, offering more flexibility to both buyers and sellers. For instance, buyers could have the option to select only the services they require from an agent, while sellers might no longer be responsible for covering the buyer's agent's fees.

» MORE: Can a seller refuse to pay a buyer's agent fee?

How much do real estate agents make on commission?

On paper, listing agents receive $3,607 to $14,427 from the average home sale, while a typical buyer's agent commission ranges from $3,607 to $14,427. However, the average realtor's take-home pay in the U.S. is only around $6,124.

This is 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 must pay them part 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. More experienced agents generally keep higher commission percentages than less experienced ones.

Can you negotiate realtor commission?

In theory, negotiating realtor fees might seem feasible, yet many agents stick firmly to their standard rates. In fact, according to the NAR, only about 22% of sellers have successfully negotiated lower commissions.[6] 

However, certain scenarios might improve your chances of negotiating commission:

  • Buying and selling with the same agent
  • Opting to dual agency
  • Selling in a competitive seller's market with limited inventory

When agents handle both sides of the transaction, they're more likely to consider a reduced rate due to the increased earnings from combined commissions. 

Similarly, a seller's market can enhance your bargaining power, although agents are not obligated to lower their fees.

Despite the challenges of negotiating commissions independently, partnering with Clever offers a straightforward path to discounted rates without sacrificing service quality.

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