A 3% real estate commission has long been the standard rate home sellers pay each agent involved in their transaction. Most sales involve two agents — a listing agent and buyer’s agent. When each realtor earns 3%, the seller pays a 6% total commission fee.
However, average commission rates are on the decline. Rising home prices and increased competition among agents are making standard 3% realtor fees harder to justify. These days, most sellers pay less than 6% total.
There are several ways to save on commission, including shopping around before choosing an agent. Many discount real estate brokerages have found ways to match the experience of selling with a traditional agent for a fraction of the price. And conventional realtors are often willing to negotiate lower rates to win your business.
Read on to learn more about the traditional 3% commission model and find the best ways to save on realtor fees when you sell your house.
How the 3% commission model works
When you sell a house, you’ll typically pay each agent involved in the transaction a 3% commission fee. A conventional home sale usually involves two agents:
- Your listing agent gets a 3% listing fee for helping you market and sell your home.
- The buyer’s agent gets a 3% buyer’s agent fee for bringing the buyer to purchase the home.
Example of commission breakdown for a $300,000 home
✍️ Important note: Home sellers almost never pay realtor fees out of pocket. Most agents only charge a commission at the completion of a successful sale, and both agents’ fees are deducted from the sale proceeds at closing.
3% commission calculator: How much will I pay?
To find out how much selling with a 3% commission realtor could cost when you sell your house, fill out the calculator below. Adjust the sale price, listing fee, and buyer’s agent fee to see how they affect your net proceeds.
*Based on average seller closing costs nationwide. Learn more about closing costs.
As you can see, even a small reduction in your agent’s commission rate can yield big savings.
For example, on a $400,000 home sale, dropping your listing fee from 3% to 1% would put an extra $8,000 in your pocket at closing.
Why do sellers pay a 3% buyer’s agent commission?
Having the seller pay the buyer’s agent commission is a standard practice because it makes the purchase more affordable. Home buyers typically face tens of thousands of dollars in out-of-pocket costs. Most buyers are unwilling — and often unable — to pay their agent’s fee too.
Offering a competitive buyer’s agent commission is also important because it increases the likelihood that you’ll attract more offers, persuade buyers to bid up the sale price, and speed up your selling timeline.
Since buyer’s agents work on commission, offering an attractive rate incentivizes them to show your home. Advertising a low buyer’s agent fee could put you at a steep disadvantage, especially if there are similar houses on the market. When agents schedule showings for their buyers, they’ll naturally be tempted to prioritize the ones where they stand to make the most money!
That said, real estate commission is always negotiable, and average rates vary by market (sometimes quite a bit!). Your agent can tell you what’s competitive in your area and recommend a buyer’s agent fee that makes sense for your unique situation.
Can I pay a 3% total commission rate?
Yes, it’s possible to pay a 3% total real estate commission fee when you sell your house. But, depending on your situation, it could result in an extended timeline or lower sale price.
Pay both agents a lower commission
One way to reduce your total commission to 3% is to pay both agents a lower rate. For example, you could list your house with a 1% commission realtor and offer a 2% commission to the buyer’s agent.
However, advertising a lower buyer’s agent fee gives agents less incentive to show your home, which could make it more challenging to find a buyer. This approach is especially risky if you’re in a slower market or your home is in less-than-perfect shape.
The best way to save money on realtor commissions is by listing with a low-fee realtor and offering a competitive buyer’s agent commission. This will reduce your overall commission, but ensure that you still get the maximum number of buyers to look at your home.
Eliminate one agent from the sale
Another option is to eliminate one agent’s fee altogether. You may be able to do this through dual agency. This is when a buyer works with your agent instead of hiring their own, so you may be able to avoid paying a buyer’s agent commission.
Alternatively, you could list your house “for sale by owner” to avoid paying a listing fee, but you’d still be on the hook for a standard buyer’s agent commission.
Although either strategy could potentially save you money on commission fees, both are extremely risky for most home sellers. Dual agency creates a conflict of interest for your agent — they have to represent you and the buyer equally, so they can’t advocate for your best interests during negotiations. And research shows that sellers typically end up with much lower sale prices when they sell without an agent.
Why do realtors make 3% commission?
A 3% realtor commission is a longtime industry standard. Real estate agents typically don’t get paid until you close on a home sale or purchase. This means they invest a lot of time and out-of-pocket money on behalf of their clients, with no guarantee of payment.
For example, listing agents cover the upfront cost for services like professional photography, MLS listing fees, and marketing for your home. Buyer’s agents don’t face as many direct out-of-pocket expenses, but they may spend days or weeks showing you houses, helping you submit offers, and negotiating on your behalf.
If your home doesn’t sell or you change your mind about buying, your agent won’t get paid. Over time, the industry settled on 3% as a commission rate that realtors and customers alike felt fairly rewarded agents for the time, effort, and risk involved with real estate transactions.
However, real estate commission rates have begun declining in recent years — and it’s becoming less common for agents to charge full 3% fees. Home prices have jumped more than 80% over the past decade, so agents can charge lower rates but still earn the same amount of money from a sale.
Technology is also making the home selling process more efficient, allowing agents to close more deals without compromising on customer service.
Is the average real estate commission rate less than 3% near me?
Today, the average total commission rate nationwide is 5.50%, indicating an average of 2.75% per agent — lower than the longtime 3% standard rate.
But commission rates often vary by state, depending on local market conditions including home sale prices, supply and demand, cost of living, and other variables. Find your state in the table below to see the typical fees in your area.
Average real estate commission rate by state
|State||Avg. seller's agent commission||Avg buyer's agent commission||Avg. total commission|
Data on commission rates comes from a survey of over 900 agents conducted by our partner site, Clever Real Estate.
How to save on realtor commission
There are three main ways you could pay less than 3% commission on your home sale: work with a low commission real estate brokerage, negotiate a lower rate with your agent, or sell for sale by owner (FSBO).
Hire a low commission realtor
The easiest way to save on realtor fees is to sell with a low commission real estate brokerage.
The top discount brands offer the same general services as a traditional agent but charge lower rates, allowing you to save thousands without compromising on service quality.
Top nationwide discount real estate brands
|🥇 Clever Real Estate||$3,000 or 1%|
|🥈 Ideal Agent||2% (min. $3,000)|
|🥉 Redfin||1.5% (min. fees vary)|
In addition to these nationwide brands, there are lots of local discount brokerages you may want to consider.
When shopping for a low commission agent, be aware that not all companies provide the same level of hands-on service. Although the top brands match the experience of working with a conventional brokerage, some brands offset their low rates with suboptimal service and hidden fees.
It’s crucial to be selective when choosing a company to manage your home sale. We recommend you shop around and find the best combination of agent quality, local expertise, service, and pricing for your unique situation.
Negotiate with your agent yourself
Everything in a real estate transaction is negotiable — and that includes your listing agent’s commission.
It doesn’t hurt to ask if your agent is open to working for a lower commission rate. But just because you ask for a discount doesn’t mean you’ll get one.
You’ll increase your chances of scoring a lower commission rate in a hot seller’s market, with a particularly attractive home, or if you’re willing to do some of the heavy lifting to make your agent’s job easier.
Sell your house without a realtor
One way to considerably lower real estate agent commission is to sell your home without an agent. However, this approach will require a significant investment of your time and energy.
In a FSBO sale, you assume responsibility for everything your listing agent would’ve done — from staging to marketing to showing to negotiating to closing. That’s a lot of work if you don’t have experience in the real estate industry!
And, if you make any mistakes along the way, you could run into issues.
For example, price your home too low, and you’ll leave money on the table. Price it too high, and you’ll drive away buyers.
With FSBO, you’ll also need to comply with all local legal requirements. Not making the right disclosures could lead to legal issues in the future.
Are 3% commission realtors worth it?
Most home sellers should hire an experienced, full-service real estate agent. This gives you the best chance of finding a buyer quickly and selling your home for top dollar.
In the past, that meant working with a 3% commission realtor. But these days, you can find top-rated real estate agents who charge a lot less than the industry standard.
That could mean selling with a low commission company like Clever Real Estate or negotiating a discounted rate with an agent yourself. The bottom line is that there are more ways than ever to save thousands on realtor fees.
It’s a good idea to shop around and compare your options to pick the best agent for your needs and budget. Consider factors such as service quality and experience along with rates when choosing an agent.
FAQs about 3% commission realtors
Can I pay less than 3% commission?
Yes, you can pay less than 3% commission to the listing agent! There are a number of real estate agents that charge low commission rates to list your house, like Clever Real Estate, Ideal Agent, and Redfin. If your goal is to pay less than 3% in total commissions, you'll need to eliminate one agent from the sale, which usually means selling FSBO and offering a buyer's agent commission lower than 3%.
Is a 3% real estate commission fair?
Real estate commissions are negotiable, so a fair rate is whatever you and your agent are comfortable with. Competition in the real estate industry is driving down commission rates, so it's easier to find listing agents offering full service for a 2% commission instead of the conventional 3% rates. Check out our guide to the top low commission companies.
Do realtors always make 3%?
No, they don’t. A 3% commission is the standard for listing agents, but in some places, realtors may make closer to 2.5%. The standard commission for buyer’s agents is also 3%, and you'll usually want to offer this full amount. Reach out to a real estate professional to find the competitive rate in your area.
What is the lowest commission a realtor will take?
The lowest commission most full-service realtors will accept is a 1% listing fee. This is a significant discount compared to average real estate commissions, which are usually around 2.5–3%.
The best way to pay a lower commission while still receiving full service and support from a licensed agent is to work with a low commission real estate brokerage. Top brands, like Clever Real Estate, offer listing fees as low as 1%, and allow you to work with the best local agents from brokerages like RE/MAX and Century 21 for a fraction of the price.
What is the most common commission for a realtor?
Most realtors charge a total commission of 5–6% of the final sale price of your home. This amount is split between the listing agent (who represents the seller) and the buyer's agent — so each agent receives around 2.5–3%. Learn more about 3% commission realtors in this guide.
Interested in learning more about real estate commission rates and how to save on your home sale? Check out our other resources on low commission realtors, negotiating real estate fees, and more!
These Companies Offer the Lowest Real Estate Commission Fees: It can be tough to figure out which companies offer you the best deals on real estate commission fees. Read our in-depth reviews of the best low cost realtors!
Discount Agents and Real Estate Brokers — Are They Legit Or a Scam? Are discount agents and rock bottom rates too good to be true, or the real deal? In this piece, we sort through the hype, and uncover the truth.
How to Negotiate Your Real Estate Fees — and Save Thousands: Negotiating your real estate fees against a professional negotiator can be challenging, unless you’re a lawyer or a professional poker player. This guide gives you some tips to even the playing field.
How to Find a Real Estate Agent: Separating the wheat from the chaff isn’t always easy. This piece outlines the main ways to locate a great realtor near you.