What Percentage Does a Real Estate Agent Make on a Home Sale?

Although some realtors are paid a salary, the vast majority are independent contractors who work on commission.^[1] This means they’re paid a commission percentage when a real estate transaction is completed.

The average commission for a real estate transaction is 5–6% of the home's selling price, making it the largest part of the house's sale cost. The seller typically pays this commission, historically split between the seller’s and buyer’s agents.

Now, there are ways to cut down on the commission you have to pay, from negotiating with your realtor to using a low commission real estate agent. We’ll explore all these options in this article.

What percentage do realtors make?

Nationally, the average commission rate on a real estate transaction is 5–6%. This doesn’t mean that each realtor actually receives that much, though. That 5–6% often includes both the seller's and buyer's agent, who charge between 2.5–3% each.

This is then further split between each agent and their brokerage. Arrangements with brokerages can vary greatly, with the agent getting as little as 50% or as much as 80% of the commission.

Agents sometimes keep 100% of the commission, but then charge a monthly fee or a flat fee per transaction. In return for these fees, the brokerage provides support and resources to help the agent locate clients and close deals.

Realtor commission example

Say you’ve sold a house for $500,000 and paid 6% commission. That’s $30,000 in fees to the real estate agents. Let’s say that’s split evenly between the two, so each gets $15,000 (3% of the sale price).

Now, each agent’s brokerage takes 30% of that commission—$4,500. That means each agent walks away with $10,500.

Even then, additional expenses, such as an assistant or other professional costs, likely further reduce that commission.

» Estimate the total amount you’ll pay in realtor fees

Biggest factors impacting what a realtor makes

Several things can impact how much a realtor makes:

• Location: Commission rates can vary by state, region, city, and even neighborhood. Generally, agents will try to stay in the range of the local average commission.
• Home price and condition: Realtors may be more willing to take a lower percentage if a home is priced higher or in great shape because the value and likelihood of a quick sale can offset the lower percentage.
• Ease of sale: If a home seems likely to sell particularly quickly or easily, the realtor may accept a lower commission rate, because they can close the deal and focus on the next one faster.
• Level of service: Realtors broadly fall into full-service and limited-service categories. Full-service agents, as expected, offer the full range of services necessary to sell a home, and these are often factored into the commission rate. Limited-service agents often charge a lower fee but obviously offer fewer services for that price.

Lastly, the recent settlement with the National Association of Realtors (NAR) changes how realtors can set commissions for buyers’ agents. The change is expected to result in more transparency around these commissions (read more below).

NAR settlement: Impact on what a realtor makes

In early 2024, the National Association of Realtors (NAR) settled a lawsuit brought by home sellers. The lawsuit revolved around complaints about broker commissions and questioned the practice of sellers paying the commissions for both the seller's and buyer's agents.

In addition to a payout for impacted sellers, the settlement changes how buyer agent commissions are determined.

Traditionally, sellers paid the buyer’s realtor fees, and there was little room for negotiation—the fees were advertised by the listing agent and appeared on the MLS. The new rules prevent this advertising and require buyers to work out fees with their own agents before viewing homes.

Sellers could still cover the buyer’s agent fee as a concession due to market expectations, to incentivize agents, or to support buyers who might be short on funds. The key difference is that it’ll have to be negotiated along with other aspects of the sale.

Ultimately, these changes should bring more transparency and options for buyers and sellers.

How to cut down a realtor's commission

There’s no real way to get out of paying realtor commissions—this is how most agents earn money. That said, it’s possible to cut the commission down some. Here are some tips to reduce the realtor fees you need to pay.

• Don’t be afraid to negotiate. Ask your agent what commission they charge. If you feel it’s too high, negotiate with the agent. You might be surprised how flexible some realtors can be.
• Interview multiple agents to find better rates. If an agent’s rate seems too high, shopping around is perfectly okay. Just be upfront with the realtors so you don’t lead them on.
• Know your bottom line. Before shopping for realtors, determine the highest commission you’re willing to pay. This makes negotiating much less stressful.
• Use a discount broker. Companies like Clever Real Estate negotiate with agents to get a reduced commission for sellers. This can be a great way to be sure you’re paying less in realtor fees.
• Leverage market conditions. When negotiating, it helps to be aware of your area's current real estate climate. For example, if it’s a seller’s market (where the home is likely to sell very quickly), you can use this fact to encourage the agent to accept a lower commission (since the sale will be fast and easy).
• Consider dual agency. Lastly, you can consider dual agency—where one agent represents both the buyer and seller in a transaction. Since they get the commission from both parties, they may be willing to accept a lower percentage. However, this option should be used with caution: It can create a conflict of interest, as it can be hard for an agent to represent both parties fairly.

Ultimately, while commission is a large expense for the seller, many ways exist to reduce it.