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Written by Steve Nicastro
In a typical home sale, the seller typically pays all realtor fees, also called real estate agent commissions. These fees typically range from 5% to 6% of the home’s sale price.
For example, selling a $500,000 home at a 5.5% total commission would result in $27,500 in realtor fees. This includes the seller’s and buyer’s agent fees and doesn’t include other seller closing costs like transfer taxes and title insurance.
However, significant changes have emerged following a major lawsuit settlement in August 2024. This settlement fundamentally alters how realtor commissions are handled. These changes could lead to lower commission rates and more direct negotiations, giving both buyers and sellers greater control.
You also don’t have to accept high commission costs as an industry norm. Instead, Real Estate Witch can connect you with experienced, full-service agents who offer pre-negotiated 1.5% listing fees. Sell with a top agent, save thousands on realtor fees!
» Realtor fees by state | NAR settlement | What fees cover | How to save | FAQ
How much do realtors charge?
Realtor fees are typically 5–6% of the home’s purchase price. The nationwide average commission rate is 5.32%, according to Clever Real Estate.
The total commission ranges from 2.5–3% to the listing agent and their broker and 2.5–3% going to the buyer’s agent and their broker.
On a $500,000 home sale at a 6% commission rate, each agent makes about $15,000.
| Percentage | Dollar amount* | |
|---|---|---|
| Listing agent commission | 3% | $15,000 |
| Buyer's agent commission | 3% | $15,000 |
| Total commission | 6% | $30,000 |
Average realtor commission by state
Realtor fees often vary by state. Several regional factors impact commission rates, such as:
- Home sale prices
- Market trends
- Supply and demand
- Average time to sell
- Marketing expenses
- Cost of living
- Your property’s characteristics (e.g., location, condition)
Clever recently surveyed agents nationwide to learn the average commission rate in each state.
The survey found that rates can vary significantly — by more than a percentage point sometimes. For example, New Hampshire real estate agent commission costs about 5.25%, while Ohio real estate commission costs 5.60%.
Find out how much average realtor fees are in your state:
| State | Average commission rate |
|---|---|
| Alabama | 5.31% |
| Alaska | 5.04% |
| Arizona | 5.40% |
| Arkansas | 5.30% |
| California | 4.99% |
| Colorado | 5.29% |
| Connecticut | 5.25% |
| Delaware | 5.30% |
| Washington D.C. | 4.82% |
| Florida | 5.05% |
| Georgia | 5.62% |
| Hawaii | 5.04% |
| Idaho | 4.68% |
| Illinois | 5.07% |
| Indiana | 5.31% |
| Iowa | 5.51% |
| Kansas | 5.51% |
| Kentucky | 5.30% |
| Louisiana | 5.30% |
| Maine | 5.25% |
| Maryland | 5.30% |
| Massachusetts | 4.47% |
| Michigan | 5.86% |
| Minnesota | 5.77% |
| Mississippi | 5.30% |
| Missouri | 5.73% |
| Montana | 4.68% |
| Nebraska | 5.51% |
| Nevada | 3.51% |
| New Hampshire | 5.25% |
| New Jersey | 5.07% |
| New Mexico | 5.68% |
| New York | 5.36% |
| North Carolina | 5.47% |
| North Dakota | 5.51% |
| Ohio | 5.60% |
| Oklahoma | 5.68% |
| Oregon | 5.00% |
| Pennsylvania | 5.35% |
| Rhode Island | 5.25% |
| South Carolina | 5.36% |
| South Dakota | 5.51% |
| Tennessee | 5.54% |
| Texas | 5.76% |
| Utah | 4.68% |
| Vermont | 5.25% |
| Virginia | 5.19% |
| Washington | 5.18% |
| West Virginia | 5.30% |
| Wisconsin | 5.78% |
| Wyoming | 4.68% |
Keep in mind that commissions are negotiable no matter where you live. We negotiate discounted realtor fees with our agent network to help you save big.
You can get a pre-negotiated 1.5% listing fee when you use our service. And these aren’t “discount” agents. We partner with top-rated realtors from name-brand brokerages like Keller Williams, Century 21, and RE/MAX. You get the same full service for a fraction of the typical rate.
NAR lawsuit settlement update
The National Association of Realtors (NAR) and some large real estate brokers recently settled a lawsuit from November 2023. NAR has agreed to pay $418 million over four years without admitting wrongdoing.1
The key outcomes from the lawsuit settlement include:
- Listing agents can no longer advertise buyer’s agent fees. This change shifts the responsibility to buyers and their agents to negotiate fees directly – rather than the seller dictating the buyer’s agent’s compensation.
- Seller concessions may resemble the current system. Many MLSs are introducing a field for seller concessions, often expressed as a percentage. If the buyer’s agent fee is lower than the concession, the buyer keeps the difference, potentially saving money.
- 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, which provides buyers with more transparency.
- Settlement payments for impacted sellers. NAR will pay $418 million to past sellers over approximately four years. Eligible sellers may qualify for settlement payments.
» Want to learn more? Check out the NAR’s big agreement
Realtor fee calculator
Use this realtor fee calculator to estimate how much you’ll pay in real estate commission when you sell your home.
Simply enter your estimated home sales price and the percentage you’ll pay each agent. Remember, sellers are responsible for covering the commission for both their listing agent and the buyer’s agent.
What do realtor fees cover?
The fees compensate agents for the time they devote to your real estate transaction.
For buyers, this typically includes the following services:
- 📈 Educating you on the home-buying process and market trends
- 🏦 Connecting you to lenders for pre-approval and financing
- 🔎 Finding properties that meet your needs and budget
- 🏠 Scheduling showings and attending open houses
- 📝 Writing and submitting offers
- 📋 Assisting with paperwork and explaining legal terms
- 🛠️ Helping you set up inspections and the appraisal
- 🤝 Negotiating deals and facilitating closing
For sellers, realtor fees typically cover services such as:
- 🏡 Offering pre-listing advice, such as improvements to enhance the property value
- 📊 Analyzing market conditions to time the sale effectively
- 💲 Researching comparative sales with a CMA report and developing a pricing strategy
- 📸 Arranging for high-quality photos, virtual tours, and 3D home modeling
- 📝 Crafting a compelling listing description
- 💻 Listing the property on the multiple listing service (MLS)
- 📣 Marketing your property listing
- 👥 Networking with other realtors to find potential buyers
- 🤝 Negotiating deals and facilitating closing
Always check with your agent upfront to learn what services they do and don’t include in their standard fees. This way, you and your agent will be on the same page.
» MORE: How much do real estate agents make?
Are realtor fees negotiable?
Yes, you can negotiate realtor fees.
A recent NAR study found that 22% of sellers who initiated discussions about fees successfully negotiated a reduced commission, compared to only 5% who attempted to negotiate but were unable to secure a lower rate.2
» MORE: How to negotiate your real estate commission
How to reduce realtor fees
Negotiating realtor fees isn’t the only way to save on realtor commission. Here are two alternative approaches.
Use a discount brokerage
One of the best ways for home sellers to save money on realtor fees is to work with a discount real estate brokerage.
These companies offer built-in savings on listing fees — no negotiation necessary. In addition, their agents provide all the same services that traditional realtors offer.
Here are the best discount brokerages for home sellers:
| Brand | Listing fee | Locations |
|---|---|---|
| Clever Real Estate | 1.5% (min. $3,000) | Nationwide |
| Redfin | 1.5% (min. fees vary) | 100+ markets |
| Ideal Agent | 2% (min. $3,000) | Nationwide |
| SimpleShowing | 1% (min. $3,500) | Florida, Georgia, Texas |
The top discount brokerages have agents who provide the same support and service as traditional realtors.
Sell for sale by owner (FSBO)
When you sell your home without a realtor, you don’t need a listing agent, which means you can save on listing fees (2.5–3%). However, offering the buyer’s agent a fair commission is smart. This motivates agents to show your home to potential buyers.
Remember that selling FSBO requires you to handle all the tasks a listing agent typically manages, which can be challenging and time-consuming. And a recent study found that FSBO homes sell for about $100,000 less than homes listed through agents.3
So, while selling FSBO can save you money on fees, weighing that benefit against the work you’ll have to do and the potential for a lower sale price is crucial.
FAQ about realtor fees
Are realtor fees negotiable?
Yes. You can always ask your realtor for a lower commission rate. It's best to do this upfront before you start working together. Alternatively, you can work with an agent matching serivce, which pre-negotiates reduced commission rates with its agent network so you don't have to do any awkward negotiating!
How can I save money on realtor fees?
You can save money on realtor fees in several ways. One method is using a discount real estate brokerage. These brokerages offer lower listing fees without you having to negotiate, and they provide the same services as traditional realtors.
Selling for sale by owner (FSBO) is another option. You don't use a listing agent or pay a 2.5–3% listing fee. However, you’ll still want to offer a competitive commission to the buyer's agent. While selling FSBO can save on fees, FSBO homes often sell for less than homes represented by an agent.
What percentage do most real estate agents take on a home sale?
Realtors usually charge a total commission of 5–6% of the sale price, split between the listing agent and the buyer's agent. The national average commission rate is 5-6%. For a $500,000 home at a 6% rate, each agent earns approximately $15,000. The seller usually pays the commission for both agents.
What's a fair realtor fee?
Realtor fees depend on multiple factors, including your home, your local market, and the level of support you need. In most cases, if you work with a traditional real estate agent, you’ll likely end up paying the average commission rate for your state.
How are realtor fees paid out?
During closing, the title company or attorney deducts the realtor fees from the seller's proceeds. They distribute the commissions to the agents' brokerages, who take their cut and then pay the agents. You don't have to worry about mailing a check or handing cash to the agents — the title company handles everything.
Related reading
What Companies Offer the Lowest Real Estate Commission Fees? Working with a low commission realtor is one of the best ways to save money when you sell your home. Here’s an in-depth review of the best low-cost realtors!
How Does a 3% Realtor Commission Work? Learn how the traditional 3% commission model works and tips to save on commission.
Negotiating Realtor Fees: Check out our guide on negotiating realtor fees effectively. Getting a lower rate could save you thousands.
Zillow For Sale By Owner Fees: Zillow doesn’t charge FSBO sellers any listing fees, but is it worth selling your home on its website? Find out here.
How Much Does It Cost to Sell a House? We break down the true cost of selling a home, including common costs like realtor commission, seller closing costs, and optional pre-sale expenses.
Sources
- National Association of Realtors. “What the NAR Settlement Means for Home Buyers and Sellers.” ↩︎ ↩︎
- National Association of Realtors. “2023 Home Buyers and Sellers Generational Trends Report,’ page 131.” ↩︎
- National Association of Realtors. “Highlights From the Profile of Home Buyers and Sellers, 2023.” ↩︎
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