Real Estate Agent Commission: How Much Do Agents Make in 2024?
- Published on
- 13 min read
-
Richard Haddad Executive EditorClose
Richard Haddad Executive EditorRichard Haddad is the executive editor of HomeLight.com. He works with an experienced content team that oversees the company’s blog featuring in-depth articles about the home buying and selling process, homeownership news, home care and design tips, and related real estate trends. Previously, he served as an editor and content producer for World Company, Gannett, and Western News & Info, where he also served as news director and director of internet operations.
Most real estate agents get paid through commissions. Commissions are typically calculated as a percentage of a property’s sale price, though some brokerages will charge a flat fee.
Average real estate agent commission rates nationwide have traditionally been around 5.8% of the home sale price, but recent court-mandated changes in commission and homebuyer rules are reshaping these percentages and even shifting who pays Realtor fees.
For generations, the commission has typically been paid by the home seller, and the seller’s agent splits it with the buyer’s agent. But effective August 17, 2024, a court settlement by the National Association of Realtors (NAR) “decouples” seller and buyer agent compensation, giving buyers the responsibility to negotiate commissions directly with their own agent.
However, sellers can still offer to pay both the listing and buyer agent commissions. Such an offer can be used as a strategic concession to attract buyers and speed up a home sale.
Find an Agent Worth Their Commission
We’ll connect you with three top local agents proven to deliver amazing results for their clients. You won’t regret a dime spent!
How much do real estate agents make?
If you choose the traditional seller-funded commission option you can expect to pay your agent between 5% and 6% in commissions when selling a home in 2024, with some variation based on location. On a property worth $400,000, that amounts to $20,000–$24,000 in commission costs.
If you are only covering your listing agent commission, the Realtor fees would be about half that amount ($10,000–$12,000). Your total will depend on the rate you negotiate and whether you offer to pay the buyer’s agent.
Let’s look at how commissions might play out by home price broken out in three ways:
- If you, as the seller, agree to pay both the listing and buyer agent fees
- If you only pay a typical 3% listing agent commission
- What the buyer might pay if they negotiate a 3% commission
For simplicity, we’ll use a 6% commission and show the decoupled buyer and seller fee rates.
Commission examples by home price
| Home price | Combined 6% fee | 3% listing agent fee | 3% buyer’s agent fee |
| $200,000 | $12,000 | $6,000 | $6,000 |
| $300,000 | $18,000 | $9,000 | $9,000 |
| $400,000 | $24,000 | $12,000 | $12,000 |
| $500,000 | $30,000 | $15,000 | $15,000 |
| $600,000 | $36,000 | $18,000 | $18,000 |
| $700,000 | $42,000 | $21,000 | $21,000 |
| $800,000 | $48,000 | $24,000 | $24,000 |
| $900,000 | $54,000 | $27,000 | $27,000 |
| $1,000,000 | $60,000 | $30,000 | $30,000 |
| $1,500,000 | $90,000 | $45,000 | $45,000 |
More real estate agent commission examples
The table below illustrates a wide range of different commission amounts you might pay on a home with a $400,000 selling price, depending on the compensation arrangements of your sale. We’ve started with lower, non-typical fees in case you happen to be working with a low-commission agent. (We’ll share more about discount and limited-service agents later in our post.)
Commission examples on $400,000 home purchase
| Commission rate | Agent fee | Commission rate | Agent fee |
| 1.25% | $5,000 | 3.75% | $15,000 |
| 1.5% | $6,000 | 4% | $16,000 |
| 1.75% | $7,000 | 4.25% | $17,000 |
| 2% | $8,000 | 4.5% | $18,000 |
| 2.25% | $9,000 | 4.75% | $19,000 |
| 2.5% | $10,000 | 5% | $20,000 |
| 2.75% | $11,000 | 5.25% | $21,000 |
| 3% | $12,000 | 5.5% | $22,000 |
| 3.25% | $13,000 | 5.75% | $23,000 |
| 3.5% | $14,000 | 6% | $24,000 |
Still curious about agent fees? Next up are the answers to common questions about real estate agent commissions.
Who pays real estate commission fees?
Historically, the seller in a transaction paid the commission fees in full. As top real estate agent Rachel Moussa of Flower Mound, Texas, explains, in most places, “the standard has been for sellers to pay both the listing agent and the buyer’s agent’s commission.”
However, as part of the NAR lawsuit settlement terms, buyers are now expected to negotiate and pay their own agent fees. To accommodate and reinforce this change, buyers are being asked to sign a buyer-broker agreement even before touring a property.
In addition, Moussa explains that under the old model, “the listing agent [would] put on the multiple listing service (MLS) what percentage the seller agreed to pay cooperating brokers.” But under the new rules, compensation offers are no longer allowed to be posted on NAR-opertaed MLS systems.
This change was made to avoid what is known as “steering,” where some buyers’ agents would only show their clients homes that would make them the most money. Commission offers can still be shared from agent to agent through off-MLS communications, such as phone calls, emails, and non-NAR real estate portals.
When is the commission owed?
As the seller, the real estate commission you owe will automatically be deducted from the sale proceeds at the time of closing. Until then, you won’t owe any money to the real estate agent.
For buyers who have negotiated a commission with their agent, the Realtor fee will be paid as part of their final closing costs.
Does the agent get to keep the full commission?
In cases where the seller agrees to pay the entire commission, the listing agent (representing the seller) doesn’t keep it all. Part of their commission will go toward marketing your property with professional photography, open houses, offline marketing, and more.
In the traditional seller-funded commission scenario, there was typically a 50/50 split with the buyer’s agent to compensate them for bringing a buyer to the sale and coordinating the buy-side of the transaction. So, around 2.5% to 3% would go to the listing agent, and the other 2.5% to 3% would go to the buyer’s agent. Both the listing agent and the buyer’s agent would then share a percentage of their commission with their sponsoring broker.
These split rates can vary; however, it’s common for the listing agent to give their broker anywhere from 20% to 50% of their portion of the commission, depending on the agent’s level of experience, their market size, and the brokerage agreement.
Under the new NAR settlement rules, if you pay just your listing agent fees, that agent will still only be able to keep what’s left after covering their marketing expenses and whatever slice of the commission their brokerage office requires.
How is the commission divided between agents?
Under the old model, the commission that’s paid by the seller is split between each agent and the brokerages through which they hang their real estate license. Let’s say you sell your home for $200,000 with a 6% commission rate. You pay a commission of $12,000, and each agent has a 70/30 split agreement with their brokerage. Here’s how that might look:
- Listing agent: $4,200 (70% of their $6,000 commission share)
- Listing broker: $1,800 (30% of their $6,000 commission share)
- Buyer’s agent: $4,200 (70% of their $6,000 commission share)
- Buyer’s broker: $1,800 (30% of their $6,000 commission share)
A transaction following the new NAR settlement rules will see a similar split, but the buyer is funding their own agent’s compensation.
Are commission rates negotiable?
Real estate agent commissions have always been negotiable. However, with the new real estate commission and buyer rules in place, market experts predict there will be more negotiating taking place.
In one survey before the NAR settlement changes, LendingTree found that 64% of homebuyers or sellers who asked their agents for a lower commission rate were successful.
One reason agents don’t lower their rate is that it may reduce their ability to negotiate a higher sale price for the seller. An agent’s services often include photography and pricing analysis, so a lower commission could also translate into a smaller marketing budget for your property, an inaccurate list price, fewer home promotions, and a lower likelihood of selling.
Exceptions can occur if you’ve already found a buyer. Let’s say you’re selling your house to a friend or have decided to sell to a family member. In that case, the agent would likely be willing to play the role of transaction coordinator and independent go-between for a reduced commission rate.
When asking an agent to lower their pay, do some research and keep in mind you may be limiting the pool of agents willing to work with you. And the downsides to working with a low-commission agent can be steep. Without a top agent in your corner, you could dramatically undersell your home, have a rough selling experience, or fail to sell the home at all.
What is included in a real estate agent’s commission?
A full-service real estate agent will provide a high level of offerings that go toward giving you a great selling experience and boosting exposure to your home.
An agent’s services fall into a few main categories:
Guidance on pre-sale improvements
Agents have seen a lot of houses. They will have an eye for the small but impactful improvements you could make to help it sell for more. The best agents will go above and beyond to help their clients get the job done.
“We had one seller who had stuff everywhere, the home was super dirty, the furniture wasn’t working the way they had it, but the house was over a million dollars,” shares top-selling agent Sandra Rathe of her experience selling the home of a client in South Florida. “We went through the whole process of making a list of things that they needed to do.”
Pricing strategy
An agent will put together a comparative market analysis in the form of a thick packet featuring charts, facts, figures, and photographs of houses. The analysis will show you what your home is worth based on comparable sales in the neighborhood, market trends, and local price per square foot. This key tool helps you set a realistic price that can attract offers right off the bat in a fraction of the time it would take a non-professional to determine.
Marketing services
As part of their commission, at a minimum, agents should offer expert home prep and staging, professional photography, marketing flyers and pamphlets, direct mail, automatic postings of your listing on major home search sites, local advertisements, exclusive previews for other brokers, and open house coordination. Advanced agents may also offer the development of a virtual tour.
“Our team actually meets the photographer out at the house to make sure that all the right angles are taken,” shares Moussa.
Offer management and negotiations
When you receive one or multiple offers, an agent will help you determine the strength of the offer and work with you to proceed with responding to buyers. They’ll advise on whether to accept, reject, or make a counteroffer while putting together offer spreadsheets to identify the best offer in bidding war situations.
If a buyer requests repairs after the inspection, an agent will help you push back where appropriate and advise on when to concede. Should the appraised value be lower than the contract price, an agent can help you determine whether to ask the buyer to make up the difference or if you should lower your price.
Market knowledge and neighborhood expertise
Great real estate agents know what local buyers seek in homes and which of your home’s attributes to highlight. An agent will skillfully incorporate key features into your home’s listing description and immediately be able to recognize what makes your house or the surrounding area special.
Moussa summarizes an agent’s services and the ultimate goal:
“The agent puts everything into the MLS, asks detailed questions about the home, writes the property description, and then markets it. We do Facebook Ads, door hangers, and whatever we need to do to get it out, so that every possible buyer’s agent can see the home. The listing agent’s responsibility is to bring as many offers as they can to the seller.”
What is a fair real estate commission?
If you are only paying your listing agent commission, 2.8%–3% is standard for most markets to hire a full-service real estate agent. If you are agreeing to also pay the buyer’s agent Realtor fees, a commission rate between 5%-6% is typical for most markets.
These rates should mean you have an agent who is dedicated to selling your home for the best possible price, who is available and communicative, and who is willing to shepherd the transaction from start to finish. If an agent isn’t willing to offer all or the majority of services listed above, you should interview more candidates.
What if the house doesn’t sell?
Real estate agents only get paid commissions if and when your home sells successfully. Most real estate contracts include an exclusive right to sell, which gives the real estate agent the sole rights to market the property, list the property on MLS, and receive the commission if the sale closes in a determined time frame. If your house remains on the market beyond the time period outlined in the listing agreement, you are not obligated to pay your agent.
However, keep in mind that your listing agreement may contain a protection clause, also known as a “brokerage protection clause,” “safety clause,” “extension clause,” or “tail provision.” The protection clause states that if a buyer who the listing agent introduced to the property purchases the property after the listing agreement expires, the seller still must pay the agent a commission.
How can you avoid paying Realtor fees?
There are two main ways to avoid paying Realtor fees. You can either sell your home without an agent’s help or sell it directly to a cash buyer without ever going on the market.
For Sale By Owner
Without a real estate agent, you’re responsible for preparing your home for sale, marketing, negotiating, and navigating legal and financial documents. When selling a house on your own, you’ll need to hire an attorney, at a minimum, to make sure the paperwork is right.
Typically, For Sale By Owner (FSBO) makes the most sense if you already have a buyer. As of 2023, 57% of FSBO sellers knew their buyer.
This indicates that while the FSBO route is rare, making up just 7% of sellers, it’s even more rare to forgo a real estate agent’s help when you don’t already have a buyer lined up and ready to go. In addition, according to the National Association of Realtors, the median FSBO house sold for $310,000 last year, compared to a median of $405,000 for agent-assisted sales. That’s a 23% loss in value for a possible commission savings of only 3%–6%.
Sell to a cash buyer
Cash buyers — including iBuyers, investors, and housebuying companies — are individuals or entities that purchase your home outright without the need for lender financing. These buyers typically make off-market purchases and can provide speed and convenience to sellers. If you’re interested in a cash sale, you can receive a competitive cash offer through HomeLight’s Simple Sale platform in 24 hours, with no hidden fees or agent commission. Just be aware that the price offered by any cash buyer will typically be lower than what you could receive on the open market with the help of a top agent.
Connect with a Trusted Top Agent for Top Results
HomeLight can connect you with a top-performing, trusted agent in your market. We analyze over 27 million transactions and thousands of reviews to determine which agent is best for you based on your needs.
Now you know how real estate agent commissions work
Sellers and buyers pay real estate commissions in exchange for an agent’s expertise and services throughout a real estate transaction. If you’re worried about the cost of the commission, consider that targeted upgrades, stellar marketing, and savvy negotiations can help you maximize your sale price. With an agent to guide you, you’ll also avoid the stress of navigating this complex process without professional oversight.
The key is finding a quality agent who provides the highest amount of value for their commission fee. In fact, our transaction data shows that the top 5% of agents in the U.S. sell homes for as much as 10% more than the average agent.
We’d recommend going through an online agent matching service like HomeLight that can surface top agents with an experience tailored to your needs. Whenever you’re ready to get started, HomeLight would be happy to put your commission worries to rest by introducing you to several agents in your area who are well worth it.
Writer McCoy Worthington contributed to this story.
Header Image Source: (Goodluz/ Depositphotos)
- "64% of Homebuyers or Sellers Who Asked Their Real Estate Agent for a Lower Commission Rate Were Successful," Lending Tree, Jamie Cattanach (February 2024)
- "What Is Exclusive Right to Sell?," The Motley Fool, Aly Yale (November 2023)
- "Signing a Listing Agreement With Your Real Estate Agent," NOLO, Ilona Bray, J.D. (November 2023)
- "Highlights From the Profile of Home Buyers and Sellers," NAR (November 2023)
- "Judge approves multimillion-dollar Realtor settlement, upending the way Americans buy and sell homes," CNN, Samantha Delouya (April 2024)
At HomeLight, our vision is a world where every real estate transaction is simple, certain, and satisfying. Therefore, we promote strict editorial integrity in each of our posts.
