How much is the typical realtor fee? | Realtor fees by state | Who pays realtor fees? | Are realtor fees negotiable? | How to save on realtor fees | What’s a fair realtor fee?
Getting ready to buy or sell a home and wondering how much you’ll pay in realtor fees? This guide contains everything you need to know, from who pays to what you’ll get for your money to smart ways to score discounts. We’ll even outline how realtor fees differ from state to state.
One thing’s for sure, if you want to get the most for your money, our friends at Clever Real Estate have you covered.
Clever connects you with full-service real estate agents who will list your home for $3,000 or 1%. Clever even offers eligible buyers 0.5% of their home purchase price in cash back after closing.
π° Get the best realtor fees and save big with Clever! π°
Key Takeaways
- Home sellers usually pay realtor fees (or commission), which is often a percentage of the total home sale price.Β
- Realtor commission is typically 5-6% of the price, split down the middle by the buyer’s agent and the listing agent (each gets 2.5-3%).
- Realtor fees are negotiable, and can vary by location.
- There are a few alternative approaches sellers can use to reduce realtor fees.
How much is the typical realtor fee?
The typical realtor fee is 6% of the final sale price. The commission is split evenly, with 3% going to the listing agent and their broker, and 3% going to the buyerβs agent and their broker.
The home seller pays both the buyer’s agent and the listing agent’s commission.
How does this actually shake out? On the sale of a $400,000 home, each agent makes about $12,000.
| Percentage | Dollar amount* | |
|---|---|---|
| Buyer's agent commission | 3% | $12,000 |
| Listing agent comission | 3% | $12,000 |
| Total commission paid by seller | 6% | $24,000 |
π‘ Learn more: How Does a 3% Real Estate Commission Work?
Average realtor commissions by state
Realtor fees often vary by state. A number of 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 (location, condition, etc.)
Our partners at Clever recently conducted a survey of agents across the country to learn the average commission rate in each state.
They found that rates can vary significantly β by more than a percentage point in some cases. For example, New Hampshire sellers pay realtor fees of about 4.83%, while New Mexico sellers pay about 6.21%!
Find out how much average realtor fees are in your state in the table below.
| State | Average commission rate |
|---|---|
| Alabama | 5.61% |
| Alaska* | 5.25% |
| Arizona | 5.36% |
| Arkansas* | 5.91% |
| California | 4.92% |
| Colorado | 5.50% |
| Connecticut* | 5.41% |
| Delaware* | 5.75% |
| Washington DC | 5.25% |
| Florida | 5.38% |
| Georgia | 5.87% |
| Hawaii* | 5.25% |
| Idaho* | 5.55% |
| Illinois | 5.21% |
| Indiana | 5.87% |
| Iowa* | 5.90% |
| Kansas* | 6.00% |
| Kentucky* | 5.73% |
| Louisiana* | 5.19% |
| Maine* | 5.45% |
| Maryland | 5.08% |
| Massachusetts* | 4.97% |
| Michigan | 5.98% |
| Minnesota | 5.68% |
| Mississippi* | 5.54% |
| Missouri | 5.92% |
| Montana* | 5.50% |
| Nebraska* | 5.29% |
| Nevada* | 5.00% |
| New Hampshire* | 4.83% |
| New Jersey | 5.18% |
| New Mexico* | 6.21% |
| New York | 5.11% |
| North Carolina | 5.45% |
| North Dakota* | 6.00% |
| Ohio | 5.84% |
| Oklahoma* | 5.89% |
| Oregon | 5.19% |
| Pennsylvania* | 5.60% |
| Rhode Island* | 5.15% |
| South Carolina | 5.83% |
| South Dakota* | 5.00% |
| Tennessee | 5.56% |
| Texas | 5.78% |
| Utah* | 5.17% |
| Vermont* | 6.00% |
| Virginia | 5.15% |
| Washington | 5.17% |
| West Virginia* | 5.54% |
| Wisconsin | 5.93% |
| Wyoming* | 5.48% |
Keep in mind that commissions are negotiable no matter where you live. In fact, Clever pre-negotiates discounted realtor fees with its agent network to help you save big.
A top-rated Clever agent will list your home for 1% (or $3,000 for homes that sell for less than $350,000). You’ll get the same support from your realtor for a third of the price!
Real estate commission splits
If a realtor works for a brokerage (RE/MAX or Coldwell Banker, for example), they don’t get to keep their full commission. Typically, agents split their commission 50/50 with their brokerage.
A 50/50 commission split is common, but some brokerages may structure splits differently. Sometimes, splits may favor the agent more depending on their tenure with the brokerage (as in more experienced agents share less with the brokerage).
Commission splits help cover shared brokerage expenses, like advertising, licenses for technology tools, and office equipment.
Because of brokerage commission splits, your agent makes much less than what you’ve paid in realtor fees.
| Agent's commission | $12,000 |
| 50/50 brokerage split | $6,000 |
| Agent's final pay* | $6,000 |
π‘ Learn more: What’s a Real Estate Broker? (The FULL Story)
Realtor salaries
According to Indeed, the average real estate agent in the United States makes an annual salary of $92,635. The U.S. Bureau of Labor cites $62,000 as the average realtor salary, so the actual average salary is likely somewhere between those two amounts.
Salaries for any profession can vary significantly based on things like location, experience level, and specialties.
Real estate agents may have opportunities to make more through bonuses, incentives, and recruiting. Or they may make less if they’re working part-time, doing business in an area with lower-priced homes, or if they’re new agents.
π‘ Learn more: How Much Do Real Estate Agents Make? (You Might Be Surprised!)
Who pays realtor fees?
The home seller pays realtor fees for both their listing agent and the buyer’s agent out of their final proceeds.
Though buyers pay closing costs when purchasing a home (including things like escrow fees and mortgage points), these do not include real estate agent commissions.
π‘ Learn more: Who Pays Realtor Fees? Find the TRUTH (and Tips to Save)
Why does the seller pay the buyer’s agent?
You can consider the buyer’s agent commission as a marketing expense when selling a home. It’s sort of a bounty β the seller offers a financial reward to the realtor who brings them a qualified buyer with a solid offer.
Since the buyer pays for the house and realtor fees are deducted from the seller’s proceeds, the buyer does pay realtor fees in an indirect way. Technically, realtor fees and other closing costs are just baked into the seller’s asking price.
When and how do you pay realtor fees?
During the home sale closing process, the title company takes the realtor fees out of the seller’s proceeds and distributes them to the agents’ brokerages. The brokerages take their cut and then pay the agents.
This process happens seamlessly during closing. You won’t have to worry about mailing a check or handing cash over to the agents β the title company handles everything.
What do realtor fees cover?
Realtor fees compensate agents for the time they devote to your transaction. This typically includes the following services.
| For buyers |
| π Identifying properties that meet your needs and budget |
| π Scheduling showings and attending open houses |
| π Writing and submitting offers |
| For sellers |
| π² Researching comparative sales and developing a pricing strategy |
| π Assisting in preparing the home for sale |
| π» Listing the property on the multiple listing service (MLS) |
| π£ Marketing your property listing |
| For both |
| π€ Negotiating deals |
| π Facilitating closing |
Realtor fees also typically cover some basic expenses agents may incur as they guide you through the home buying or selling process. This includes paying for things like:
- Professional home photography
- Printed flyers
- Home staging
- Drone photography
- Video tours
Always check with your agent upfront to learn what services they do and don’t include in their standard fees so you’re on the same page.
Are realtor fees negotiable?
Yes, realtor fees are negotiable; they’re never set in stone. When interviewing realtors, you can always ask for a lower rate.
It’s best to address this when you’re interviewing realtors so it’s out in the open from the start.
Agents are more likely to work for a discounted rate in a hot seller’s market, for a repeat client, or if your home is in excellent condition and is likely to sell fast.
π‘ Learn more: How to Negotiate Your Real Estate Commission
Or, you can consider another approach to reduce realtor fees:
- Clever or another agent matching service
- For sale by owner (FSBO)
- Limited service agent
- Discount brokerage
Clever or another agent matching service
Agent matching services connect buyers and sellers with real estate agents in their local area. Some, like our friends at Clever, also provide built-in commission savings β they negotiate a lower rate with their agent network so you don’t have to.
Clever Partner Agents work for big-name full-service brokerages like Keller Williams and RE/MAX that you already know and trust.
When you sell your home with Clever, your agent will provide full-service support but list your home for just 1% or $3,000. On the sale of a $400,000 home, you’ll save up to $8,000 with Clever!
| Clever Real Estate | Traditional real estate agent | |
|---|---|---|
| Listing fee | 1% | 3% |
| Buyer's agent commission | 3% | 3% |
| Total commission cost | $16,000 | $24,000 |
Even buyers can save when they work with Clever. Clever offers 0.5% of your home’s purchase price in cash back to eligible buyers.
On the purchase of a $400,000 home, this is $2,000 in Clever Cash Back, which will definitely come in handy when buying a new place!
Some other agent matching services like Ideal Agent and UpNest also offer discounted commission rates. But with Clever, you’ll save at least twice as much!
For sale by owner
When you sell by owner, you don’t use a listing agent. So, you don’t have to pay half the realtor fees that traditional sellers incur.
However, we recommend you still offer a competitive buyer’s agent’s commission.
If you choose to go FSBO, you’ll be responsible for doing everything your listing agent would have done on your behalf. This makes selling FSBO difficult and time-consuming.
Also, any commission savings you gain are often negated because FSBO homes typically net lower prices overall. Research shows they commonly sell for 5-7% less than homes sold with a traditional listing agent.
We don’t recommend you lower (or omit) the buyer’s agent commission as a way to save money on realtor fees. Offering a reduced buyer’s agent commission could put your sale at a disadvantage.
If you don’t offer a buyer’s agent commission, or if you offer one that’s significantly reduced, buyer’s agents likely won’t bother showing your home to their clients.
Agents make a living from their commissions. Naturally, they will steer clients towards homes where they stand to make a competitive rate.
There are some rare conditions when slightly lowering the buyer’s agent commission may be possible, like in a hot seller’s market. But, for the most part, we don’t think it’s a smart way to cut back on these fees.
π‘ Learn more: How To Sell Your House Without A Realtor: What You NEED To Know
Limited service agent
Limited service brokerages allow you to pick and choose which real estate services you need when selling your home. You pay for what you want, and nothing more.
Some limited service brokerages structure their offerings by service tier. Others allow you to choose each service Γ‘ la carte. For example, you may choose to pay for an MLS listing but opt out of a yard sign.
Limited-service brokerages may charge a flat fee or a reduced commission percentage, allowing sellers to save money on realtor fees.
This approach is generally best for individuals who’ve conducted a few real estate transactions and know exactly what they can handle on their own.
π‘ Learn more: What Is a Limited-Service Real Estate Agent?
Discount brokerage
Some brokerages offer reduced commission rates. Redfin, for example, is a popular discount brokerage that helps buyers and sellers in most major markets.
If you decide to use a discount brokerage, you may not get the same level of service you would with a traditional agent.
Many discount brokerages make some tradeoffs to achieve their lower commission rates, such as having a team manage the sales process versus one designated agent. Others have agents that only provide virtual, rather than in-person, support.
Make sure you ask questions upfront, so you’re aware of exactly what you’re getting if you decide to go this route.
π‘ Learn more: The Best Discount Real Estate Brokers for Every Budget
Bottom line: 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.
To save money, you might be considering an alternative approach, like selling FSBO or working with a limited service agent. But, if you choose one of these money-saving options, you won’t get the same level of service as you would with a traditional full-service agent.
Enter Clever. The company delivers discounted rates with all the benefits of working with a full-service realtor. Plus, its helpful concierge team will walk you through your entire transaction.
Clever connects buyers and sellers with a local member of its agent network who will provide a full-service experience for a 1% listing commission (compared to the traditional 2.5-3%).
Clever’s partner agents are from big-name brokerages. They’re vetted top performers in their region. And Clever’s pre-negotiated low realtor fees with them can help you save big!
Related reading
Do I Need A Real Estate Agent? Learn The TRUTH: If you think the best way to save money on realtor fees is to forgo working with a realtor, you’ll want to read this. Learn exactly what agents do to earn their commission and what you’ll need to do if you opt to buy or sell without one.
How Much Should I Spend on a House? Find Out Now!: Worried about keeping within your budget? Check out this piece, which lets you know how much you should spend on your home based on your monthly income.
20 Ways to Save Money When Buying a Home: There aren’t coupons or discount codes when it comes to buying a house. But you CAN still save money. This guide provides 20 smart ways to save on your home purchase.
FAQs
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've started working together. Check out these proven strategies for negotiating lower realtor fees.
Alternatively, you can work with a company like Clever Real Estate, which has pre-negotiated significantly reduced commission rates with its agent network so you don't have to do any awkward haggling!
How can I save money on realtor fees?
There are many approaches to saving money on realtor fees. For example, you can try selling for sale by owner or work with a discount real estate brokerage.
However, we recommend working with Clever Real Estate. Clever's partner agents will list your home for a 1% commission rate β a significant savings compared to the traditional 3%.
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