How Much Do Real Estate Commissions Really Cost When Selling a Home?
Reviewed by Mark Lee
When you decide to sell your home, one of the first questions that pops up is, “How much will I pay in real estate commission—and how does it affect my profit?” 🏠 Understanding commissions can help you plan your sale strategically and avoid surprises at closing.
On average, real estate commissions range from 5% to 6% of your home’s final sale price. That fee is typically split between the listing agent (representing the seller) and the buyer’s agent, each receiving about 2.5% to 3%. But since recent industry changes took effect in August 2024, who pays which portion may look a little different.
Below, we’ll explain how commissions work, how they’re divided, what the 2024 rule changes mean, and how to save money without sacrificing results.
What Is a Real Estate Commission?
A real estate commission is the fee paid to real estate professionals for helping you buy or sell a property. Rather than charging upfront, most agents work on a commission-only basis, meaning they get paid when the deal closes.
Agents typically work under a licensed real estate broker, who manages the transaction, ensures compliance with local laws, and receives part of the commission for providing resources like MLS access, marketing tools, and client support.
Before 2024, sellers commonly paid the total commission (both agents). However, after the National Association of Realtors (NAR) settlement, commissions are now “decoupled”—meaning buyers and sellers are responsible for their own agent’s fees unless they negotiate otherwise.
How Are Real Estate Commissions Split?
Let’s break down a typical commission scenario using a $350,000 home sale with a 6% total commission:
Total commission: $21,000
Listing agent’s share (3%): $10,500
Buyer’s agent’s share (3%): $10,500
Each agent’s commission is then split with their broker—usually 50/50—so both the agent and the brokerage each receive $5,250.
Different firms have unique commission structures. Here are examples from top U.S. brokerages:
Compass: 80/20 (agent/broker split)
RE/MAX: 60/40
Keller Williams: 70/30
Century 21: 50/50
eXp Realty: 80/20
As agents gain experience or hit certain sales goals, their split may become more favorable.
How Much Do Real Estate Agents Actually Earn?
Even though commissions can seem high, agents don’t keep the full amount. Their portion covers marketing, professional photography, listing fees, open houses, and time spent negotiating offers.
According to Glassdoor, the average annual income for U.S. real estate agents is around $152,000, with top producers earning significantly more.
As top agent Robert Dombrowsky notes, “Competition between agents is stronger than ever. Experienced agents who consistently close deals earn far more than part-time or newer agents still learning the ropes.”
Who Pays the Real Estate Commission in 2025?
As of August 17, 2024, new NAR regulations changed commission responsibilities:
Sellers now typically pay their listing agent’s commission (around 2.5%–3%).
Buyers are responsible for paying their buyer’s agent’s commission (around 2.5%–3%).
However, everything remains negotiable. A seller can still offer to pay part—or even all—of the buyer’s commission as an incentive to attract offers.
The escrow or title company handling the closing usually distributes commissions directly to each broker, ensuring full transparency.
Do Realtors® Charge Higher Commissions?
Not necessarily. The term Realtor® refers to a licensed agent who’s also a member of the National Association of Realtors and abides by its strict Code of Ethics. Hiring a Realtor® ensures professional accountability—but it doesn’t mean you’ll pay a higher rate than a standard real estate agent.
Real Estate Teams vs. Individual Agents
Some sellers hire a real estate team, which is a group of agents led by an experienced team leader. Teams can handle multiple parts of your sale—marketing, showings, negotiations—under one umbrella.
Pros of hiring a team:
You get more availability and specialized expertise.
The team can manage multiple buyers and showings efficiently.
Cons:
You might not work directly with the team leader.
Communication can sometimes feel less personal.
In most cases, you’ll pay the same commission for a team as for a solo agent.
Ways to Save on Real Estate Commission
Selling your home doesn’t always mean paying the full 6%. There are several ways to reduce your commission costs while still getting great results.
1. Negotiate Your Listing Agent’s Fee
Commissions are 100% negotiable. Many agents are open to slight reductions, especially for higher-priced homes.
However, as agent Rick Ruiz explains:
“The commission is a motivator. If you cut it too much, you may also cut the agent’s incentive to go above and beyond.”
It’s often best to negotiate modestly while keeping full-service representation—since top agents typically sell homes for up to 10% more than average agents.
2. Try a Flat-Fee or Discount Broker
A flat-fee broker charges a set rate (often around 1.5%) rather than a percentage of the sale price. However, the services offered are usually limited to listing your property on the MLS and handling basic documentation.
While this can save money upfront, you might lose more in the sale price if your home doesn’t attract the same buyer traffic or marketing exposure.
3. Sell Your Home Yourself (FSBO)
Selling “For Sale By Owner” can eliminate agent commissions entirely—but it comes with challenges. You’ll be responsible for:
Pricing, staging, and marketing your home.
Handling showings and negotiations.
Managing legal documents and disclosures.
According to NAR’s 2024 report, FSBO homes sold for a median of $380,000, compared to $435,000 for agent-assisted homes. So while you save on commission, you might still earn less overall.
4. Work with a Cash Buyer
If speed is your priority, consider a cash buyer. Many companies that advertise “we buy houses” cover closing costs and skip agent commissions entirely. This is ideal if you want to sell your house fast without repairs, staging, or lengthy listings.
What Does the Real Estate Commission Cover?
Your agent’s commission pays for more than just listing your home—it funds a wide range of professional services that help your property sell quickly and for top dollar.
These include:
Professional photography & staging
MLS listing and syndication
Targeted digital marketing
Open house coordination
Offer negotiation and contract management
Coordination with title, escrow, and lenders
Essentially, your agent is your project manager, guiding you through a complex legal and financial process.
FAQs About Real Estate Commissions
❓Who decides the commission rate?
Commission rates are not fixed by law. They are negotiated between you and your listing agent before signing the listing agreement.
❓Can I negotiate both the listing and buyer’s agent commissions?
Yes. You can negotiate both sides, though you’ll want to ensure your home remains attractive to buyers and their agents by offering a fair buyer’s commission.
❓When are real estate agents paid?
Agents receive payment only after closing, once the sale has officially funded and recorded.
❓What if my home doesn’t sell?
If your listing agreement expires without a sale, no commission is owed. Some agents may charge minor marketing expenses, but this should be outlined clearly in your contract.
❓Can I avoid paying commission completely?
Only by selling your home without an agent (FSBO) or working directly with a cash buyer who handles all transaction costs.
The Bottom Line: Are Real Estate Commissions Worth It?
While the idea of paying 5–6% may seem steep, top-performing agents consistently earn sellers more money and smoother transactions. From expert negotiation to professional marketing and handling paperwork, the commission fee is often offset by the higher sale price and reduced stress.
If you’re preparing to sell, take the time to interview multiple agents, review their experience, and compare what’s included in their service package.
💡 Pro tip: The top 5% of agents in the U.S. sell homes for up to 10% higher prices than average agents—often covering their own commission in added profit.
How Absolute Properties Helps Houston Sellers
Absolute Properties makes it easy for Houston homeowners to sell fast - even when facing challenges like financial difficulties, inherited properties, troublesome tenants, or repairs.
As-is, fast cash offers with clear terms
Many closing costs covered; no realtor commissions in most cases
You choose the closing date (as little as 7 days, case-dependent)
Coordination with experienced title company for a compliant sale process
Call or text: (713) 230-8059
Email address: info@absolutepropertieshtx.com
Share your street address and timeline for a free consultation and a straightforward number no pressure.
Helpful Houston Blog Articles
How To Sell Your House in Houston Without Sinking Any More Money Into It
6 Tips For First Time Home Sellers in Houston
Hiring an Agent Vs. A Direct Sale to Absolute Properties When Selling Your House in Houston
Who Pays Closing Costs in Texas
The True Costs of An FSBO Listing for Houston Investors
What To Do With Your Expired Listing in Houston
Also check out our Free Guides & Education for more education on how to sell your house for cash quickly to a local home buyer.
