Realtor commission is the payment real estate agents earn for helping buy or sell a home. It’s usually a percentage of the sale price and comes out of the seller’s proceeds at closing.
Our nationwide survey found that the average total real estate commission is 5.70%, with 2.88% for the seller’s agent and 2.82% for the buyer’s agent. Rates vary by region.
To put this in dollars, a seller's agent would earn $15,000 on a $500,000 home with a 3% commission rate.
Recent legal changes are reshaping how commissions are negotiated, so it’s more important than ever to understand them. Below, we cover how realtor commissions work, the typical costs, and what services agents provide for their fee.
Want to save on realtor fees? Clever Real Estate can help you compare seller's agents who offer full service for just 1.5%. Answer 5 short questions to get matched with top-rated agents today!
How realtor commission works
Realtors aren't paid a salary like other professions. Most agents work on a 100% commission basis.
The commission is what an agent earns after closing on a home sale. It's expressed as a percentage of the home's sale price.
Realtor commission is paid by the seller out of sale proceeds at closing. The seller signs a listing agreement that sets the total commission rate — typically 5% to 6% of the sale price — and at closing, the title company deducts that amount from the seller's check and disburses it to the listing brokerage and the buyer's brokerage. Each brokerage then splits its share with the individual agent who did the work.
In most deals, the seller still writes the check. But because that check comes out of sale proceeds, buyers indirectly fund the commission through the price they pay for the home. After the August 2024 NAR settlement, buyers also sign a buyer-broker agreement upfront — and in some deals, they pay their agent directly when the seller declines to cover it.
Realtor commissions are negotiable, and successfully negotiating your agent's fee can yield significant savings when selling your home.
Remember that realtor fees don't include closing costs, such as transfer taxes and title insurance, which can add 1–3% to both the buyer’s and seller’s closing expenses.
How much are realtor fees?
Home sellers should expect to pay 5–6% of their home's sale price in realtor fees, which covers both agents. Nationwide, commission rates average 5.70%, according to our February 2026 survey of 533 agents across the U.S. However, these rates are negotiable.
A home seller and their listing agent typically agree on a commission rate when they sign a contract to work together. This contract — called the listing agreement — outlines the payment, duration, and other terms of the realtor-seller working relationship.
The table below shows what total commission looks like in dollar terms across common rate scenarios and home prices.
| Sale price | At 5.70% (national avg) | At 5% | At 4.5% | At 3% (low-commission) |
|---|---|---|---|---|
| $200,000 | $11,400 | $10,000 | $9,000 | $6,000 |
| $350,000 | $19,950 | $17,500 | $15,750 | $10,500 |
| $700,000 | $39,900 | $35,000 | $31,500 | $21,000 |
The 3% column reflects rates offered by low-commission and discount brokerages — typically 1% to 1.5% on the listing side, with the buyer's agent still earning 2% to 3% to attract showings.
Does commission rate vary by state?
Yes — modestly. The national average masks real differences between states. Coastal and luxury markets tend to trend slightly higher; midwestern and FSBO-friendly states often run lower. Local supply of agents, density of discount brokerages, and long-standing market norms all play a role.
A few examples from Clever's state-by-state commission data:[1]
- Texas — averages roughly 5.88%
- Florida — about 5.57%
- California — closer to 5.47%
- New York — runs around 5.69%
- Pennsylvania — around 5.77%
How do realtors get paid?
Realtors get paid from the seller’s proceeds at closing. If your home doesn’t sell, you typically don’t owe a realtor commission.
The payment process occurs during the home’s closing, also known as settlement. At this stage, a title company finalizes the transfer of ownership and distributes the sale proceeds, including:
- Realtor fees for the seller’s agent (often referred to as the "listing agent" because they list the home for sale)
- Realtor fees for the buyer’s agent (the agent who represents the homebuyer)
Realtors also share a percentage of their commission with their broker, who is legally responsible for overseeing the transaction and ensuring compliance with real estate laws. Splits can range from 50/50 to 90/10.
What does realtor commission cover?
A realtor's fee is an all-inclusive charge that covers a wide range of services to support both sellers and buyers throughout the real estate transaction process.
For sellers, realtor commission covers:
- Pre-listing services: Evaluating your home's fair market value to determine a competitive listing price and giving advice on staging and which repairs to make.
- Marketing: Listing your home on the MLS, promoting it online, and providing professional photography.
- Showings and open houses: Organizing open houses, coordinating showings, and managing inquiries from potential buyers.
- Negotiation and paperwork: Representing your interests during negotiations and handling all required legal paperwork.
- Closing support: Guiding you through the final steps to ensure a smooth closing.
For buyers, commission covers:
- Financial preparation: Helping you get pre-approved for financing and understand your budget.
- Home search: Identifying homes that match your needs and scheduling in-person viewings.
- Offer submission and negotiation: Crafting and negotiating offers to secure the best deal.
- Legal and professional guidance: Managing legal paperwork and connecting you with trusted professionals, such as home inspectors and attorneys.
What happens to commission in a dual agency situation?
Dual agency happens when one agent — or one brokerage — represents both the seller and the buyer in the same transaction. In that case, the single agent (or brokerage) collects the full commission instead of splitting it with another brokerage. The total rate is sometimes negotiated down because there's no second brokerage to pay, but more often the agent keeps both sides.
On a $400,000 sale at 5.5% total commission, a dual agent in a single-agent dual agency arrangement could earn the full $22,000 — minus their brokerage split. That's roughly double what either side normally takes home.
Dual agency is legal in most states[2] but raises representation concerns. The agent owes fiduciary duty to both parties at once, which limits the negotiation advice they can give either side. Eight states ban it outright, and several others require explicit written consent. If you're considering a dual agency situation, ask the agent to walk through exactly how they'll represent both parties — and consider hiring a real estate attorney to review the contract.
NAR lawsuit: How it impacts realtor commission
The National Association of Realtors (NAR) announced a preliminary settlement agreement, which was finalized on August 17, 2024. These changes introduced significant shifts in how realtor commissions are handled, particularly affecting home buyers.
Key changes under the NAR settlement
Buyers now negotiate commissions directly. Buyers negotiate with their agents and sign a buyer's agency agreement before touring homes. This agreement clearly outlines the agent’s compensation.[3]
Buyers are responsible for agent fees. This changes from the traditional structure where the seller typically covered these costs. Historically, sellers paid the buyer’s agent a commission (averaging 2.82% nationally) as part of the overall commission structure in the listing agreement.
More complex negotiations. Buyers, especially those with limited funds for a down payment, may face challenges. Sometimes, they might negotiate with sellers to include the buyer’s agent fee in the closing costs.
What's happening in practice?
While the settlement shifts the responsibility of negotiating and potentially paying buyer’s agent commissions to buyers, most sellers continue to offer compensation to ensure their homes attract buyer interest.
However, the transition hasn’t been without confusion or resistance.
“Sellers are asking questions about the impact on not offering a commission,” says Brandi Brooks, a realtor based in Memphis, TN. “Once they hear my explanation, they're still offering the buyer's agent a commission, especially with homes sitting longer on the market.”
Many buyers struggle to afford agent fees, which can complicate transactions if the seller doesn't cover the cost.
“My concern is buyers typically have a hard time coming up with their down payment and closing costs,” says Barbara Kuzma, an agent based in Cheyenne, WY. “They don’t have more to pay towards a commission.”
Where realtor commission is heading
Realtor commission rates have been declining since the NAR settlement, which is likely to continue. Many experts believe that overall rates will drop slightly as some buyer agents struggle to compete.
Glenn Phillips, CEO at Lake Homes Realty, explains: “When you have nothing to set yourself apart, you cut price. But that won’t last—weak agents will eventually be pushed out as others offer even cheaper rates.”
The growth of low-commission realtors also adds pressure to commission rates. Nathan Richardson, founder of CashForHome.com, says that while some rates may decrease, agents who focus on providing exceptional service and expertise will still earn competitive fees.
Commission structures are becoming more transparent and flexible, allowing sellers to tailor agreements to their needs. Levi Rodgers, co-founder at VA Loan Network, predicts this shift will help sellers balance costs while maximizing their outcomes.
Greater transparency will help buyers and sellers see the value skilled agents bring, making the right representation even more important.
How to save on realtor commissions: 5 strategies
Most sellers don't have to pay the 5.70% national average. The five practical paths below trade effort for savings — pick the one that matches how hands-on you want to be.
| Strategy | Typical savings on $500K | Effort | Tradeoff | Right for |
|---|---|---|---|---|
| Negotiate with your agent | $1,500–$5,000 | Low | Outcome varies by market | Anyone willing to ask |
| Discount or 2% broker | $7,500–$10,000 | Low | Service may be lighter | Sellers in standard markets |
| Flat-fee MLS listing | $10,000–$15,000 | Medium | You handle showings and negotiation | Confident DIY sellers |
| Sell FSBO | $12,500–$25,000 | High | You handle the entire deal | Experienced sellers, niche markets |
| Sell to a cash buyer | Skip the commission, but accept 5%–15% below market | Low | You accept a lower offer | Sellers prioritizing speed or certainty |
Negotiate with your agent
Every commission rate is negotiable. On homes priced above the local median, agents are often open to 0.5% to 1% off the listing side — particularly if the home is likely to sell quickly. The lever depends on home price, market conditions, and the agent's pipeline. See our commission negotiation guide for specific scripts.
Hire a discount or low-commission broker
One of the easiest ways to save on realtor commissions is by hiring a low-commission agent. Instead of the standard 2.5–3% listing fee, many low-commission agents charge around 1.5% — cutting your costs in half without cutting corners.
A major benefit is value. Low-commission agents still provide full service, including pricing strategy, professional marketing, showings, negotiations, and support through closing. You get the same expertise as a traditional agent, but at a much lower cost.
It’s also hassle-free. You don’t have to negotiate fees yourself or risk hiring a discount agent who won’t give your home the attention it deserves. Low-commission agents are often highly rated and experienced in your local market, so you can save money and feel confident you’re in good hands.
Clever Real Estate makes it simple to find a trusted low-commission agent. Get matched with top local agents today and pay just 1.5% to sell your home with full service.
- Answer 5 simple questions about your sale
- Get matched with 2–3 top local agents in minutes
- Compare options, choose the best fit, save up to 50% on fees
Use a flat-fee MLS service
A flat-fee MLS service lists your home on the MLS for a one-time charge — usually $300 to $600 — and you handle the rest. You still pay the buyer's agent commission (typically 2% to 3%), so total savings depend on how the buyer side is structured.
Sell FSBO
For sale by owner skips both agents entirely. You handle pricing, marketing, showings, negotiation, paperwork, and closing coordination. The best FSBO websites have made the listing side easier, but FSBO homes typically sell for 5% to 15% less than agent-listed homes. The math only works if you can avoid that discount.
Sell to a cash buyer
Cash buyers — iBuyers, investors, “we buy houses” companies — skip the commission entirely but offer 5% to 15% below market price in exchange for speed and certainty. The right move when timeline matters more than the last dollar.
Questions to ask your agent about commission
Before you sign a listing agreement, walk through these five questions with any agent you're considering. The answers tell you what kind of service you're paying for — and where the negotiation room actually is.
- What's your total listing fee, and what does it cover? Get the listing side and buyer side broken out separately. A 5.5% total usually means 2.5–3% on each side, but the split varies.
- Is the rate negotiable, and under what conditions? Agents often have more room on homes above the local median, on quick-turn listings, or on dual representation. Ask which lever applies to you.
- What's your post-NAR-settlement approach to buyer concessions? Will they recommend offering a buyer-agent concession in the listing? At what rate? How does that decision get made in your local market?
- What's included in your full-service fee — and what's an add-on? Staging, professional photography, drone, video, paid social, and 3D tours are sometimes bundled and sometimes billed separately. Pin this down before signing.
- How are you compensated if the home doesn't sell? Most listing agents work on contingency, but some contracts have early-cancellation fees or marketing reimbursement clauses. Read the cancellation terms before you sign.
Frequently asked questions
The seller writes the check at closing in most deals, but the buyer indirectly funds the commission through the price they pay. After the August 2024 NAR settlement, buyers also sign a buyer-broker agreement upfront, and in some deals they pay their agent directly when the seller declines to offer a concession. See our buyer's agent fee guide for the full breakdown.
Commission is a percentage of the home's sale price — nationally averaging 5.70% per Clever's February 2026 commission survey — split roughly evenly between the listing and buyer's agent. It comes out of the seller's proceeds at closing and is paid to each brokerage. The brokerage then splits its share with the individual agent based on their employment agreement, typically 50/50 to 90/10.
Yes — for sellers, commission is the largest single line in closing costs. Non-commission seller closing costs (transfer taxes, title fees, owner's title insurance, attorney fees in attorney-required states) typically run another 1% to 3% on top. For buyers, commission is separate from their closing costs unless they're paying their agent directly under a buyer-broker agreement.
On new builds, the builder usually pays the buyer's agent commission as a marketing cost — typically 2% to 3%. Builders rarely use a listing agent, so there's no listing-side commission. Confirm the builder's commission policy in writing before signing a buyer-broker agreement; if the builder offers less than your agreed rate, you may be on the hook for the gap.
Yes — commission is always negotiable, and post-NAR-settlement it's increasingly common. Sellers in standard markets can usually negotiate 0.5% to 1% off the listing-side commission, especially for homes priced above the local median. The lever depends on home price, market conditions, and how full the agent's pipeline is. See our commission negotiation guide for specific scripts.
