How Real Estate Agents Earn Their Pay — A Clear Look for Houston Homeowners

Written By Mark Lee, Partner at Absolute Properties
 

Reviewed by Mark Lee

Illustration of a real estate agent standing beside a house with a For Sale sign and the Houston skyline, asking how agents make money.

If you’re preparing to sell your house in Houston, one of the big questions you may have is: how much does a real estate agent actually make? It’s a smart question. After all, agent commissions are often one of the largest costs when closing a home sale — and the rules around them are shifting.

In this post, we’ll walk through how agents are paid, how those payments are changing, and how these changes are playing out in the Houston market.

How Agents Are Paid: The Traditional Model vs. the New Reality

What Was the Traditional Commission Structure?

Historically, real estate agents made their income through commissions, which were a percentage of the home’s final sale price. In many markets, including Texas, that amount often landed around 5%–6% of the home’s sale price. HomeLight+1

Here’s how that typically broke down:

  • The seller paid the full commission (from their sale proceeds). HomeLight+1

  • That commission was split roughly 50/50 between:

    1. The listing agent (seller’s agent)

    2. The buyer’s agent

  • Each agent then shared a portion with their broker (brokerage split varies by agent). HomeLight

This structure tied agent pay to the sale price: the more the home sold for (or the more homes they sold), the more agents made.

What’s Changing: The 2024 NAR Settlement

On August 17, 2024, major changes went into effect following a settlement by the National Association of Realtors (NAR). National Association of REALTORS®+2National Association of REALTORS®+2 Here’s what’s different now:

  • Offers of compensation (i.e., what the buyer’s agent is paid) can no longer be advertised on MLS platforms. National Association of REALTORS®+1

  • Instead, any compensation for the buyer’s agent must be negotiated off‑MLS, directly between the buyer (or their agent) and the seller or listing broker. National Association of REALTORS®+1

  • More importantly, buyer’s agents now must enter into a written agreement with their clients (homebuyers) that clearly states how they will be compensated — before touring homes. National Association of REALTORS®

These changes are meant to increase transparency and give more control to both buyers and sellers over how commissions are paid.

What Agent Earnings Look Like in Houston

The Local Landscape: Houston Commission Rates

Commission structures in Houston reflect both the traditional model and some of these newer dynamics. According to a recent survey, the average total commission in Houston is about 5.81% of the sale price. Clever Real Estate+1

Here’s how that typically breaks down for Houston:

These percentages may still seem close to the “old” model, but because of the settlement, how these commissions are handled and negotiated is more flexible than before.

Why Houston’s Numbers Matter

Several factors affect how much agents make in Houston:

  1. Housing Market Conditions
    Houston’s real estate market — with its mix of properties, strong buyer interest, and variable pricing — plays a big role in agent earnings. In a competitive market, seller-paid commissions can help make listings more attractive to buyers.

  2. Agent Experience and Brokerage Splits
    An experienced agent commanding more business or working under a favorable brokerage split (say, 70/30 or 80/20) will take home more. In Texas, agent-broker splits are common and vary widely. Colibri Real Estate School+1

  3. Volume of Sales
    Agents who close many deals, or focus on higher-priced homes, can make significantly more. But if an agent only does a few listings a year, or works lower-priced homes, their commission income will naturally be lower.

  4. Business Costs
    Agents are not just salespeople — they run businesses. They pay for marketing (photography, ads, open houses), MLS access, licensing, insurance, travel, and more. These operating costs affect how much of the commission they actually keep.

Why Paying Agent Commissions Is Still Valuable

You might wonder: Why pay all that commission? Isn’t it just going into someone’s pocket?

Here’s why many sellers still choose to use and pay agents:

  • Expertise and Negotiation: Agents coordinate with inspectors, title companies, lenders, and other parties. They negotiate offers, craft counteroffers, and work to protect your bottom line.

  • Network & Marketing: A good agent brings visibility to your listing — they know which buyers to target, how to present your house, and how to run open houses, all of which can help push your price higher.

  • Time Savings: Selling a house is a full-time job in itself. With an agent, you don’t have to manage all the logistics, paperwork, and timelines.

  • Closing Efficiency: Agents handle closing timelines, coordinate escrow, and ensure everything is in place so your transaction actually closes on time.

As one top agent put it (paraphrased): your commission is paying for someone to get you from point A (listing) to point B (closing) — making the path smoother and more profitable.

What the New Commission Rules Mean for You

As a Seller in Houston

  • You now have more flexibility. Under the new rules, you can negotiate whether to offer compensation to a buyer’s agent — and how much. National Association of REALTORS®+1

  • You should clearly document any offered commission to buyer agents in writing, so everyone knows exactly what’s on the table.

  • Understand the trade-off: offering a buyer agent commission may make your home more attractive to buyers, especially in a slower market, but it comes at a cost.

As a Buyer in Houston

  • You’ll now likely be asked to sign a buyer-broker agreement that spells out what your agent will earn. National Association of REALTORS®+1

  • That means you can negotiate your own commission with your agent — you’re not merely accepting whatever is written in the MLS.

  • If the seller doesn’t offer to pay your agent, you may need to factor in paying your agent directly. That said, many sellers still do offer compensation, because it helps attract buyers. Clever Real Estate

Typical Commission Examples

Here are some rough examples to illustrate how much commission might look in real life — particularly in Houston — under both older models and newer ones:

Home Sale PriceTraditional (6%)Houston-Average (5.81%)$300,000~$18,000~$17,430$400,000~$24,000~$23,240$500,000~$30,000~$29,050

These numbers reflect total commission for both sides (listing + buyer’s agent), not what a single agent pockets.

Common Questions About Agent Commission in Houston

Here are some frequently asked questions, tailored to sellers and buyers in Houston.

Q: Can I negotiate the commission with my listing agent?
A: Yes. Commission is not set in stone. In Houston (and Texas generally), agents are used to negotiating their listing fee, especially in a competitive market. Redfin+1

Q: Am I required to pay the buyer’s agent in Houston?
A: No — after the NAR settlement, sellers are not required to pay the buyer’s agent, but many still do because it can make the offer more attractive. National Association of REALTORS®

Q: Will I definitely save money now that commissions are more transparent?
A: Not necessarily. While the settlement gives more choice and negotiation power, average commissions in practice haven’t dropped dramatically. Redfin But as both buyers and sellers become more savvy, you may be able to use these rules to your advantage.

Q: What if my agent offers a flat fee instead of a percentage?
A: Some agents or brokerages may charge a flat fee for certain services. This could be an option, especially for sellers who don’t want to pay a percentage of a high listing price. But you’ll want to carefully compare the services offered under a flat-fee arrangement.

Q: How do agent expenses affect what they actually take home?
A: Remember that agents split commission with their broker, pay for marketing, licensing, and other business costs. Just because a commission is X% doesn’t mean the agent keeps all of it.

Why It Matters for Houston Sellers (and How to Use It)

  • Use commission strategically: If you're in a slower market or want to attract more buyers, offering to pay a buyer’s agent commission (or a higher one) could give you an edge.

  • Interview agents wisely: Ask potential listing agents how they would structure commissions, what services they provide, and how they split with brokerages. A transparent, experienced agent is worth the cost.

  • Get everything in writing: Make sure your listing agreement clearly states the commission rate, how it's divided, and how any buyer compensation will work.

  • Negotiate buyer compensation if needed: Even though the MLS doesn’t display buyer agent offers anymore, you can still negotiate off‑MLS — either through your agent or directly.

Bottom Line

  • Real estate agents in Houston typically earn through commissions, historically around 5–6% of the home’s sale price.

  • A landmark NAR settlement in August 2024 changed how commissions are disclosed and negotiated: buyer agent compensation must now be negotiated off-MLS, and buyer agents must enter into agreements with their clients. National Association of REALTORS®+2National Association of REALTORS®+2

  • In Houston, average commissions remain around 5.81%, but how that money gets paid and who pays what has more flexibility. Clever Real Estate+1

  • Whether you’re buying or selling, it’s more important than ever to ask questions, negotiate, and document agreements clearly.

Further Reading

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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

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Mark Lee, Partner at Absolute Properties

Mark Lee is a Houston real estate investor and founder of Absolute Properties HTX, a trusted local company that helps homeowners sell their houses quickly and without hassle. With years of experience buying and renovating properties across the Greater Houston area, Mark specializes in providing fair cash offers for homes in any condition — including inherited, probate, and distressed properties. His goal is to make the selling process simple, transparent, and stress-free for every homeowner.

📍 Based in Houston, Texas - serving Harris, Fort Bend, and nearby counties

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