Real Estate Agent Fees And Commissions

In this do-it-yourself digital age, home sellers and buyers alike might wonder if they really need real estate agents — or, more precisely, if they need to pay agent fees. Just how crucial are these agents to a successful real estate transaction?

Well, a good agent is really pretty useful. For homebuyers, agents have access to information you don’t, and can use their expertise to find the best properties for you and put together a strong offer. Sellers see many benefits, too, especially when figuring out the best asking price and marketing the listing. Here, we’ll take an in-depth look at how real estate agent fees work and what you get for the money.

How much are real estate agent commissions?

Only a very small portion of real estate agents work on salary — working on commission, for a percentage of the home’s final sale price, is much more common. That means the more expensive the home, the more money the agents make.

For years, the typical going rate was 6 percent in total, usually split down the middle between the buyer’s agent and seller’s agent. But it began to fluctuate with the advent of discount brokers and the rise of online, publicly accessible listings.

Of course, real estate commissions can be negotiated, and nowadays the total typically runs somewhere closer to 5 percent. The exact terms of an agent’s commission will vary from sale to sale, and can also depend on the region and which firm they work for. As with most of the other expenses related to real estate transactions, a real estate agent’s fee isn’t paid until the sale closes.

Let’s look at an example: A 5 percent total commission on a $250,000 home sale would come to $12,500. But on a $1M sale, a commission at the same rate would come to $50,000. Here’s roughly what the agents would earn based on the price a home sells for:

Dual agency

These numbers might change in the case of dual agency, when a single agent represents both the buyer and seller in a transaction. Buyers working directly with a listing agent may have more room for commission negotiation, because the agent will be earning a fee from both parties. Laws about this vary by state; in some states, dual agency is not permitted.

While agents have a fiduciary duty to their clients, with dual agency, the lines can get blurred. But agents are still required to act in their clients’ best interest: “It’s part of our ethics and built into our contracts,” says Samantha Fish, an agent with Wesely & Associates in Grass Valley, California. “If someone comes into my open house, and they’re interested but don’t have an agent, I might say, ‘Let me connect you with another agent from my office,’ so they feel fully represented throughout the process.”

The brokerage’s cut

Real estate brokerages may get a cut of the commission as well. The brokerage RE/MAX, for example, offers a split commission setup by which its agents receive 95 percent of the full commission from the sale, and 5 percent goes back to the company.

What do real estate agent fees cover?

You might wonder, what services does this commission fee buy me? Well, for one thing, agents are licensed professionals who know their local market well and have ace negotiating skills. Both of these benefit their client, whether it’s buyers or sellers. The fee also compensates the agent for their time spent answering questions and helping you through the process.

Another big benefit for both parties: Real estate agents have access to their area’s MLS, a master database of properties for sale (the acronym stands for “multiple listing service”). This lets buyers see the widest possible range of listings to choose from, and allows a seller’s listing to be seen by the widest possible pool of potential buyers.

For buyers, working with a real estate agent can introduce you to properties or even entire neighborhoods that you wouldn’t have found otherwise. And your agent takes the reins on scheduling home tours, preparing and submitting offers, filling out and filing the proper paperwork and more.

For sellers, a real estate agent’s fee also covers things like price research and market analysis; marketing, staging and showing your property; coordinating open houses; managing offers and more.

Average real estate commissions by state

Currently, the national average real estate agent commission is 5.57 percent total, according to September 2025 data from Clever Real Estate. The average split is 2.82 percent to the listing agent (representing the seller) and 2.75 percent to the buyer’s agent.

Keep in mind, though, ​​that agents may accept a lower commission for high-priced homes to earn a higher amount overall: Their piece of the pie may be smaller, but it’s a richer slice.

Here are the average total real estate commissions by state, according to Clever:

How to avoid paying real estate agent fees

It’s certainly possible to buy a home without a real estate agent. But it’s a lot of work, much of it complicated, and the stakes are high. So weigh the pros and cons of going without professional representation carefully.

It’s more common for sellers to go without the help of a real estate agent — this is called “for sale by owner” or FSBO for short. Between July 2023 and June 2024, 6 percent of home sales were sold by owners, according to NAR data. But selling without an agent’s help is also quite a lot of work, and a big time commitment.

Alternatively, sellers could consider working with a low-commission real estate agent, who will likely charge much less than a traditional agent would (usually 1 to 1.5 percent of your home’s sale price). However, since they’re receiving a smaller commission on each property, these agents are typically focused on volume. As a result, you might not receive as much personal attention as you would with a traditional real estate agent.

There are also brokerages and agents who work on a flat-fee basis, rather than a percentage of the sale price — meaning they earn the same fee regardless of how much your home sells for.

Selling directly to an iBuyer or a company that buys houses for cash is another way to avoid paying agent commissions. But the offers from these buyers will be less than you’d likely fetch in a traditional sale, and some iBuyers charge service fees that are equivalent to what you’d pay in commission anyway.

Finally, remember that even if you’re not paying real estate agent fees, there are still plenty of other closing costs associated with selling a home — and buying one.

FAQs

• What percent commission do most real estate agents charge?
  

  Typically, each agent involved in the transaction earns somewhere between 2.5 and 3 percent of the home’s sale price as their commission fee. However, the amount is negotiable, as is who pays it, so make sure your contract clearly spells out commission rates and which party is responsible for paying them.

• Do sellers or buyers pay fees to the real estate agent?
  

  Sellers traditionally covered both real estate agent commissions — their own and the buyer’s. But that changed in 2024, and now, each party may (or may not) be responsible for paying only their own agent. The details of each transaction will be different, and will be negotiated ahead of time.

• How much commission do you pay on a $500,000 home?
  

  It depends on the specific terms of each agent’s commission. Commissions usually total somewhere between 2.5 and 3 percent of the home’s purchase price, per agent — on a $500,000 transaction, 2.5 percent comes out to $12,500 and 3 percent comes to $15,000.