Selling a home can come with significant costs, and realtor commission fees often top the list. On average, sellers pay about 5.32% of the home's sale price on realtor fees, 2.74% going to the seller's agent and 2.58% going to the buyer's agent.
Let's break it down: If your home sells for the median U.S. price of around $357,469, the total realtor commission would be about $19,017.
But remember, you can often negotiate realtor fees. As a seller, you've got some power here. If you know the market and your options, you might save quite a bit.
And here's more good news: some innovative real estate companies now offer lower commission models, which can help you keep more of your hard-earned equity. For example, with Real Estate Witch, you'd only pay a pre-negotiated listing rate of 1.5%. That's way less than the national average of 2.74%, so this could mean big savings for you!
» Ready to save thousands on your home sale? Get matched with a top-rated agent offering lower commissions today!
Average real estate agent commission rates
| Agent | Average rate |
| Seller's agent | 2.74% |
| Buyer's agent | 2.58% |
| Total | 5.32% |
Average listing agent commission
Realtor fees pay for lots of different services. For listing agents, this includes marketing your home, showing it to buyers, handling important parts of the sale, and dealing with offers.
Listing agents' fees range from 1.00% to 4.50%, with an average of 2.74%. That equates to about $3,575 to $16,086 on a $357,469 home. The proceeds from the home sale pay for the commission.
Average buyer's agent commission
Buyer's agent commission rates typically range from 1.00% to
4.50%, or 2.58% on average. That's about $3,575 to $16,086 on a $357,469 home.
Sellers typically cover buyer agent fees, and so it isn't a direct expense for the buyer.
Average commission based on final sale price
A realtor's commission is determined by their commission rate and the home's final sale price. Interestingly, a realtor charging a 2% commission could earn more than one charging 3% if they sell a more expensive home.
Below is a table showing how the national average commission (5.32%) breaks down at different home sale prices:
| Sale price | Commission (5.32%) |
| $270,000 | $14,364 |
| $540,000 | $28,728 |
| $890,000 | $47,348 |
Average real estate commission by state
Realtor commission rates differ widely based on your location and the typical housing prices in your state.
For example, in states such as Ohio, where housing prices are generally lower than the national average, the commission rates tend to be higher, around 5.60%. Conversely, in states like California, where housing prices are higher, the average commission rate is slightly lower at 4.99%.
Do you know what the average realtor commission rate is in your state? Take a look at the table below to get a better understanding of the rates specific to your area:
| State | Average commission rate |
|---|---|
| Alabama | 5.44% |
| Alaska* | 4.99% |
| Arizona | 5.43% |
| Arkansas* | 5.44% |
| California | 4.91% |
| Colorado | 5.52% |
| Connecticut* | 5.12% |
| Delaware* | 5.44% |
| Washington DC | 4.96% |
| Florida | 5.40% |
| Georgia | 5.76% |
| Hawaii* | 4.99% |
| Idaho* | 5.36% |
| Illinois | 5.24% |
| Indiana | 5.67% |
| Iowa* | 5.67% |
| Kansas* | 5.67% |
| Kentucky* | 5.44% |
| Louisiana* | 5.44% |
| Maine* | 5.12% |
| Maryland | 5.11% |
| Massachusetts* | 4.84% |
| Michigan | 5.64% |
| Minnesota | 5.41% |
| Mississippi* | 5.44% |
| Missouri | 5.73% |
| Montana* | 5.36% |
| Nebraska* | 5.67% |
| New Hampshire* | 5.12% |
| New Jersey | 5.13% |
| New Mexico* | 5.59% |
| New York | 4.97% |
| North Carolina | 5.60% |
| North Dakota* | 5.67% |
| Ohio | 5.81% |
| Oklahoma* | 5.59% |
| Oregon | 4.99% |
| Pennsylvania* | 5.53% |
| Rhode Island* | 5.12% |
| South Carolina | 5.63% |
| South Dakota* | 5.67% |
| Tennessee | 5.44% |
| Texas | 5.59% |
| Utah* | 5.36% |
| Vermont* | 5.12% |
| Virginia | 5.23% |
| Washington | 5.29% |
| West Virginia* | 5.44% |
| Wisconsin | 5.67% |
| Wyoming* | 5.36% |
| Nevada* | 5.02% |
Surprised by the average commission in your area? Don't worry, there's a savvy way to keep more money in your pocket.
Real Estate Witch selects the cream of the crop in local agents nationwide, offering you a top-notch, full-service selling experience. The best part? A low commission rate of just 1.5%. This smart move could save thousands of dollars when you sell your home!
How realtor fees work
Who pays realtor fees?
In today's housing market, the seller typically pays all the realtor fees, including their own agent's commission and the commission of the buyer's agent.
These costs are covered at the end of the sale using the money from the sale itself, so the seller doesn't have to pay anything upfront.
Why does the seller pay the buyer's agent fees?
The seller paying the buyer's agent's commission encourages agents to bring in serious, interested buyers. This commission motivates the buyer's agent to find the right buyer for the home.
Once the sale goes through successfully, the agent receives their commission as a reward for their successful matchmaking.
🧙♀️ Real estate commission changes are here!
Some big news is shaking up how we think about selling and buying houses. Traditionally, sellers were responsible for paying both the listing agent and the buyer's agent. However, recent legal developments are challenging this long-standing practice.
In November 2023, a landmark lawsuit accused the National Association of Realtors (NAR) and several major real estate companies of fostering unfair practices, particularly requiring sellers to set and disclose buyer agent fees on the MLS.[1]
This lawsuit concluded with a settlement in August 2024, bringing several key changes:
Listing agents can't advertise buyer’s agent fees. MLS platforms will no longer display buyer's agent fees. This responsibility now falls to buyers and their agents, who must negotiate compensation directly—removing sellers from this part of the process.
Real estate agent Danielle Dolan from Denver, CO, notes: "Agents don’t know how to best position their seller when a buyer's agent calls and asks if the seller is offering compensation. On the flip side, this may decrease showings because many buyers can't afford the services of a buyer's agent without seller assistance."
Seller concessions may resemble the current system. Many MLSs now include a field for seller concessions, often expressed as a percentage. If a buyer’s agent fee is lower than the agreed concession, buyers may pocket the difference, providing potential savings.
However, as real estate agent Barbara De Lucca from Honolulu, HI, pointed out: "Sellers are misinformed that they don’t need to offer buyer’s agent compensation, which can hurt their ability to attract buyers."
Buyer's agency agreements are mandatory. Buyer’s agents must secure a signed agreement outlining services and fees before taking on clients or touring homes, providing buyers more transparency.
This change has faced mixed reactions, with Michael Pellegrini from Sonoma County, CA, sharing:
"Most buyers don’t want to sign a contract just to see a home. Real estate used to be about building relationships—it doesn’t feel that way anymore."
Settlement payments for impacted sellers. As part of the settlement, NAR will distribute $418 million to eligible sellers over the next four years. If you sold a home during the relevant period, you may qualify for a portion of this payment.
"This is a teachable moment for our consumers," says realtor Marisa Bilkiss from Las Vegas, NV. "Once explained, they get it and don’t seem to have pushback."
» Want to learn more? Check out the NAR's big agreement
Why are realtor fees so expensive?
When you're paying realtor commissions, you're covering a variety of services that agents provide. For listing agents, these services include:
- Marketing your property with professional photography, staging advice, and online listings to attract buyers.
- Showing your home to prospective buyers and hosting open houses.
- Managing critical aspects of the sale, like negotiating offers, handling paperwork, and meeting transaction deadlines.
- Providing expert guidance to ensure a smooth selling process from start to finish.
"It’s not just about writing a piece of paper," explains agent Ryan Davis from Fresno, CA. "It’s about the time, education, marketing dollars, and personal sacrifices agents make to help their clients succeed."
How much do realtors actually earn?
Realtors primarily earn their income through commissions, not a fixed salary. While commissions might seem high, most agents take home far less than many people assume due to brokerage splits and other expenses.
Here’s a breakdown:
- Annual transactions: On average, realtors complete about 12 transactions per year.[2]
- Average commissions: Listing agents earn an average commission of $11,723 per sale, but that doesn't factor in brokerage splits (money paid to their broker), which can be 50% of the total commission.[3]
- Annual income: According to the U.S. Bureau of Labor Statistics, the average annual income for real estate agents in 2023 was approximately $69,610. This figure is notably lower compared to other professions, such as loan officers, who typically earn around $84,490, nurse practitioners, who earn an average of $128,490, and marketing and sales managers, who earn about $161,040.[4]
- Low net income: A deeper dive into the earnings reveals a more nuanced picture. According to a study by the National Association of Realtors (NAR), the median net income for all sales agents was only around $25,000 after accounting for all expenses.
- New agents struggle. The financial picture can be even more challenging for agents with two years or less of experience. According to agent Barbara Kuzma from Wyoming, “New buyers don’t like signing agreements without getting to know their agent, making it harder for newcomers to establish trust.” They often earn a median gross income of just $9,600.[5]
- Additional expenses: Agents also incur costs like real estate licensing fees ranging from $600 to over $1,000, varying by state.[6]
However, there's still room for negotiation on commission rates. For example, an agent might not have to spend as much on advertising your property if you're a repeat client. This reduced expenditure can often lead to a lower commission rate for you, making the selling process potentially more cost-effective.
Factors that influence commission rates
Realtor fees are a significant part of the cost of selling a house, and these rates can vary from state to state.
Clever Real Estate surveyed realtors nationwide to find out how they decide on their commission rates and when they might be willing to change them. The survey identified three main strategies for getting a lower commission:
1. Being a repeat client. If you've worked with an agent before, you're more likely to get a better deal. Agents value ongoing business relationships and may offer lower rates for repeat clients rather than chasing a slightly higher one-time commission.
"Agents value ongoing business relationships and are more likely to negotiate rates for repeat clients," says Kittner, the agent from St. Louis, MO.
2. Selling in low inventory areas. Agents have fewer chances to make money in places with few houses for sale. Homes in these areas also tend to sell quickly and with less effort. This situation allows sellers to shop around and possibly get lower commission rates from agents eager for listings.
3. Selling higher-valued homes. Agents might be open to reducing their commission for luxury or expensive homes. The reasoning is that the commission from selling a high-value property can be substantial, even at a lower rate, and the effort involved isn't much more than for less expensive homes.
So, if you're selling a high-end property, it's a good idea to negotiate for a lower commission.
On the other hand, sometimes agents might ask for a higher commission rate. This can happen if you, as the seller, want extra advertising or special photos of your house. These additional features cost the agent more, so they might charge you a bit extra to cover their costs.
How to save big on realtor fees
You've got several options to save on real estate commissions:
Choose a low-commission brokerage
A low commission real estate company is our top recommendation for cutting costs without compromising on service quality. For instance, Clever offers a reduced listing fee of just 1.5% and still provides full service with experienced local agents.
Negotiate a discounted rate
You can always try to talk down the commission rates with your realtor. This works best if you're selling again with the same agent or your area's housing market is hot. But remember, agents prefer not to drop their fees unless necessary, so negotiating on your own may be a bit challenging.
» LEARN: How to negotiate realtor fees
Sell your home yourself (FSBO)
Going the FSBO route is a popular way to save. You skip the seller's agent fee by handling the sale alone. But be prepared to do all the work an agent would normally handle. Also, several studies suggest FSBO homes often sell for less than those sold through agents.
» MORE: How to sell your house for sale by owner
Methodology
The data from the Clever Real Estate research is based on a 2024 survey of 734 agents who were asked to indicate typical commission rates for buyer and seller agents in their area.
We've adopted a comprehensive methodology to give our readers the most accurate and helpful information on average real estate commissions. Our approach includes:
Analyzing regional differences. Since real estate markets vary by location, our data reflects these differences in commission rates across states and local areas, giving readers relevant information for their specific region.
Emphasis on clear, useful information. Our goal is to make complex real estate information easy to understand. We simplify our research findings into clear, actionable insights for home buyers and sellers.
Consulting with real estate experts. To enhance the reliability of our data, we consulted with real estate professionals, including current and former real estate agents and brokers. Their expertise helps validate our research and provides additional insights for home sellers and buyers.