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?
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.
- Sellers can save on realtor fees (without sacrificing service!) in a few ways.
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.
Traditionally, realtor fees cost around 6% of the final sale price of a home. If you sold a $350,000 home at a 6% commission, you’d spend around $21,000 on realtor fees. But in today’s housing market, it’s possible to pay lower rates while still receiving top-notch service from the best realtors in your area.
If you’re looking to save on realtor fees, a company like Clever Real Estate is a great option. Clever negotiates 1% listing fees with realtors at top brokerages like Keller Williams and RE/MAX. Youβll get guaranteed full service from a local agent β at a fraction of the typical cost! Find top local agents and save big on realtor fees today!
Realtor fees definition
Realtor fees and real estate commissions are different terms that refer to the same thing β the fees that real estate agents earn for helping you sell or buy a home. In this article, we’ll use the terms interchangeably.
How much are typical realtor fees?
Realtor fees are typically 6% of the final sale price of a home. 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 commission | 3% | $12,000 |
| Total commission paid by seller | 6% | $24,000 |
Β» MORE: How does a 3% real estate commission work?
Average realtor commission 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 | 5.44% |
| 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% |
| Nevada* | 5.02% |
| 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% |
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 guaranteed full service 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.
Commission split on a $400,000 home
| Agent's commission | $12,000 |
| 50/50 brokerage split | $6,000 |
| Agent's final pay* | $6,000 |
Β» MORE: What’s a real estate broker?
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 sale price along with the percentage you’ll pay to each agent. Remember, sellers are responsible for covering both the listing agent and buyer’s agent fees.
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.
Β» MORE: Who pays realtor fees?
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.
For buyers, this typically includes the following services:
- π Identifying properties that meet your needs and budget
- π Scheduling showings and attending open houses
- π Writing and submitting offers
- π€ Negotiating deals and facilitating closing
For sellers, realtor fees typically cover services such as:
- 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
- π€ Negotiating deals and 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?
Realtor fees are always technically negotiable β but many agents aren’t willing to budge on their rate. As the Consumer Federation of America reports, roughly 73% of listing agents won’t negotiate on their fees.
That said, there are some situations where a realtor may have some room to negotiate. If you’re selling a more expensive home (think above $500,000), a realtor may be willing to lower their fees β because they’ll still receive a high dollar amount overall.
Realtors may also be more flexible on their fees if your home is in excellent condition and is likely to sell fast, if it’s a hot seller’s market, or if you’re planning to buy and sell a home with the same agent.
Β» MORE: How to negotiate your real estate commission
Other ways to reduce realtor fees
You can save money on realtor fees by working with a discount real estate brokerage. The top discount companies pass on incredible savings to their customers, but still provide all the support that you’d expect from a traditional realtor.
Another way to reduce realtor commissions is by selling your home for sale by owner. However, this will require a lot of DIY, and you may not be able to sell your home for top dollar.
Discount brokerages
One of the best ways for home sellers to save money on realtor fees is by working with a discount real estate brokerage.
These companies offer built-in savings on listing fees β 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 | $3,000 or 1% | 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 are the ones where the agents provide the same level of support and service as traditional realtors. A nationwide company like Clever Real Estate matches sellers with agents at well-known brokerages like Keller Williams and RE/MAX.
When you sell your home with Clever, your agent will provide full-service and support, but list your home for just 1% β compared to the 3% listing fee that traditional agents charge.
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.
Β» MORE: How to sell your house without a realtor
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!
FAQs 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'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%.
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.
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.
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!
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