Is 6% Real Estate Commission Now a Thing of the Past?

Traditionally, the industry standard is a 6% real estate commission in home sales, split evenly between the seller’s and buyer’s agent.

However, this rate has slowly declined in many areas of the United States, often falling around 5.5% or less. Additionally, the recent National Association of Realtors (NAR) settlement may lower rates. “This settlement encourages more competitive commission structures, potentially reducing costs,” states Dimitri Zubrich, a Re/Max Affiliates realtor.^[1]

Understanding how these commission structures work and knowing the average rate for your area can help ensure you’re paying a fair price. It may even help you negotiate a lower rate to save on realtor fees.

What is a 6% Real Estate Commission?

In a 6% real estate commission, the seller pays 6% of the home sale price to cover the agents’ fees. This 6% is typically split evenly between the agents, 3% for the listing agent and 3% for the buyer’s agent.

For example, a 6% commission for a $500,000 home would be $30,000. This amount is split between the agents, with each receiving $15,000.

However, this structure is becoming less prevalent, as average rates have fallen in many markets. This allows sellers to negotiate a lower commission rate, leading to big savings. For instance, negotiating a 5.5% total commission on a $500,000 home sale can save you $2,500, and lowering the commission rate to 5% would save you $5,000.

How 6% commission rates actually work

The seller determines the total commission before the listing agreement is signed, such as a 6% total commission. At this point, the seller also sets how the total commission will be split between the seller’s agent and the buyer’s agent. The commission is divided and paid out from the sale proceeds at the closing by the seller.

Once the NAR settlement occurs, buyers may become responsible for paying their agent’s rate instead of sellers. However, buyers can request that the seller pay for some or all of the buyer’s agent fee as part of the contract negotiation.

The listing agent earns their share of the commission by assisting the seller with:

• Marketing the home
• Arranging showings
• Negotiating the contract on the seller’s behalf
• Maintaining the timeline
• Assisting with paperwork and the closing

The buyer’s agent earns their share of the commission by assisting the buyer with:

• Finding properties that fit their needs
• Organizing viewings
• Assisting with paperwork
• Negotiating purchase terms

Why do realtors get paid 6%?

Sellers have always been able to negotiate commission rates. But a 6% commission rate became standard to ensure both the seller’s agent and buyer’s agent were compensated, since the commission is split.

A 6% commission can benefit sellers by ensuring they get the best deal for their home. For instance, paying 6% can help sellers secure the services of an experienced local agent who:

• Understands the local market conditions
• Assists with preparing the home for sale so it can get top dollar
• Provides high-quality marketing strategies to generate interest in the property, possibly helping you sell fast and for more money
• May provide more extensive services, like home staging or 3D photography, as part of the service instead of something you have to add on

But while 6% has been the industry standard, many sellers now pay less. The average commissions have recently hovered around 5.5%. Because the NAR settlement will encourage more competition, experts say the average commission rate may drop further.

Pros and cons of 6% realtors

Pros

✅ Full service and support from experienced agents.

✅ Potential for higher sale prices.

✅ Comprehensive marketing and negotiation services.

Cons

❌ Higher overall cost compared to low commission brokers.

❌ Potential for less flexibility in negotiations.

❌ Paying for services you may not need.

How to pay less than 6% right now

Sellers have several options to pay less than 6% total commission.

Work with a low commission agent

Working with an experienced, low-commission realtor can be the easiest and most reliable way to save on fees while still getting high-quality service. The best low-commission realtors and discount brokerages offer discounted listing fees while still providing full services and one-on-one support from a top local agent.

You can find a quality low-commission agent through free matching services, like Clever Real Estate and Ideal Agent. These services provide multiple local agent options, so you can interview and select the agent who best suits you.

Additionally, the companies will have pre-negotiated a lower commission rate for you. For instance, Clever has pre-negotiated a low 1.5% listing fee with agents, while Ideal Agent has pre-negotiated a 2% rate.

This means that on a home sale of $400,000, you’d only pay the listing agent $6,000 with Clever’s 1.5% pre-negotiated rate versus paying $12,000 to a listing agent charging 3% (half of the 6% commission rate).

Discount brokerages like Redfin can also offer built-in savings by offering full services at a lower rate. However, some brokerages like Redfin use a team-based approach. So, you work with multiple people throughout the real estate transaction instead of having one agent, which might not fit your style.

Negotiate realtor fees

You can always try to negotiate a lower realtor commission directly with agents instead of using a matching service. Even reducing a commission rate by 1% can result in significant savings.

You’ll need to research the average commission rates for your area and develop a strategy to negotiate successfully. Otherwise, you risk offering a rate that's too far below the average rate.

When negotiating realtor commission, you can increase your chance of success by clearly highlighting the strengths of your property. For example, you could showcase that your home is in excellent condition or in a great location. Also, be prepared to shop around for agents who will provide the services you need for less.

However, keep in mind that many brokerages have set minimums, so they may be less willing to negotiate. You may also have trouble negotiating rates down if you’re selling a less expensive home.

Sell without a realtor

Selling your home yourself can help avoid paying a listing agent’s commission. And once the NAR settlement goes into effect, sellers may not be responsible for paying the buyer’s agent fee.

While saving on commission fees is one reason people sell FSBO, this approach also gives you complete control over the whole real estate transaction process. For experienced sellers, this can be a bonus.

However, less experienced sellers may find selling FSBO more time-consuming than anticipated. Additionally, many FSBO sellers underestimate how much they have to juggle and how difficult the legal paperwork and contract negotiations can be.

So, while selling your home without an agent can save on fees, industry statistics show that homes sold by owners typically fetch significantly less than those sold with an agent—$310,000 compared to $405,000 for agent-assisted sales. For many sellers, this means they miss out on higher proceeds, even after accounting for agent fees.