What Is a Fair Commission Rate for a Real Estate Agent?

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  Written by Amy Beardsley

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  Edited by Galina Velgach

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  Reviewed by Steve Nicastro

Real estate commission — the fee agents charge — can be a big expense for sellers. A typical 4–6% commission covers fees for both the listing and buyer’s agents.

The listing agent fee ranges 1% to 3% of the final sale price. Meanwhile, the buyer’s fee tends to be more set in stone at 3% — think of it as a marketing expense for the seller.

However, real estate agents may focus more on the dollar amounts they’ll net from your sale rather than the actual percentage, making the property’s value and level of effort to sell crucial factors in the final rate.

Starting your real estate journey can be both exciting and challenging, no matter your background or experience. In this easy-to-follow guide, you’ll discover fair commission rates for real estate agents so you feel informed and confident when selling a home.

» LEARN: Which companies offer the lowest commission rates?

Factors affecting listing agent commission rates

📍 Location. You may be able to negotiate a lower rate on a property that’s expected to sell quickly. Whether a property is within city limits or a suburb, as well as the market conditions in that neighborhood, can have a big impact on its desirability — and how much you’ll pay.

🏘 Property type. For instance, single-family homes are often in higher demand than condos, so they’re easier to sell.

🤝 Type of agent. You’ll pay more for full-service agents (who typically charge around 2.5–3%) than for medium-service (1.8%) and limited-service agents (1.1%). So for a $440,000 house, you could pay your listing agent as little as $4,840 or as much as $13,200.

💰 Sale price. Listing agent commission rates tend to be lower in high-priced markets like California 2.50% and higher in low-priced markets like Missouri 2.96%.

You can get a sense of what’s standard in your area by chatting with multiple agents and brokers. It can also help to look at local market trends and property specifics before deciding what rate makes sense for you.

How to determine a fair commission rate 

Online platforms like Redfin and Zillow let you research local trends and check out an agent’s experience and success rate. Here are some industry tips to help you navigate the tricky terrain of commission rates.

Research local market trends 

If there’s a high demand for homes, it means the market is hot — and agents may be open to negotiating to get your business. But when the market has more houses than buyers, realtors are less likely to budge on their commission rates.

Look up the agent’s experience

Agents with a proven track record can charge higher commission rates and may be less willing to negotiate, while newer agents may charge less as they build their portfolios. Keep in mind the higher cost may be worth it — their knowledge of the local market can speed up and smooth out the sale.

Consider your home’s condition

If your property is move-in ready or boasts renovations or features that make it popular with buyers, you may be able to negotiate a lower commission rate since the house might sell faster.

One way to get a better idea of your home’s worth and how it’ll fare in the market is by requesting a free comparative market analysis (CMA) from a realtor. This report uses recent sales of similar properties in your area to estimate the value of your home.

Related reading

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How to Negotiate Realtor Commission. Here are 8 tips for how to use information about market conditions, your situation, and more while interviewing agents.

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