Average Real Estate Commission Rates: What Buyers and Sellers Should Know

Current Real Estate Commission Rates

According to recent industry data, the national average real estate commission stands at 5.44% of the home's sale price. This represents a slight increase from the 5.32% average recorded in 2024, which was the lowest rate in five years. For a home priced at the current median value of approximately $415,000, that amounts to roughly $22,600 in total realtor fees.

The commission is typically split between the listing agent and the buyer's agent. Current averages show listing agents receiving approximately 2.77% while buyer's agents receive around 2.67%. However, rates vary significantly by state, ranging from as low as 4.5% in some markets to over 6% in others.

Who Pays Real Estate Commission?

Traditionally, the seller has been responsible for paying the full commission, which is then split between the listing agent and the buyer's agent. While the buyer does not write a separate check for their agent's compensation, this cost has historically been factored into the home's sale price.

The commission structure has undergone significant changes following the August 2024 NAR settlement. This landmark agreement, which resolved a $418 million lawsuit, fundamentally altered how commissions are handled:

Despite these changes, many sellers' agents still recommend offering buyer's agent compensation as a concession to attract more buyers and remain competitive in the market. The practical effect has been more transparency rather than dramatic commission reductions.

How Commission Gets Divided

Understanding where your commission dollars actually go helps clarify why agents charge what they do. The total commission rarely stays with a single person. Here is a typical breakdown for a $400,000 home sale with a 5.44% commission:

Agents must share their commission with their brokerage, with splits varying from 50/50 for newer agents to 90/10 for top producers. After the brokerage takes its cut, agents also cover their own business expenses including marketing, licensing, insurance, and professional development.

It is worth noting that some brokerages operate differently. Some pay agents a salary rather than commission, while others allow agents to keep 100% of their commission in exchange for monthly desk fees or transaction fees.

Are Real Estate Commissions Negotiable?

Yes. All real estate commissions are negotiable by law. While there are typical rates in each market, you are never obligated to accept the first number an agent proposes. Successful negotiation starts with an upfront conversation about what services you need and what the agent will provide.

Tips for Negotiating Commission

Request a detailed breakdown of the proposed commission and the specific services included. This allows you to identify areas where services might be adjusted to achieve a lower rate. Some agents offer tiered pricing based on service levels, while others may reduce their fee for higher-priced properties where the total dollar amount remains substantial even at a lower percentage.

In a seller's market where homes move quickly, you may have more leverage to negotiate lower rates. In a buyer's market with slower sales, agents may be less flexible since they are working harder to close deals. Luxury properties often command lower percentage rates because the dollar amounts are already substantial.

Can Buyers Negotiate Commission?

Following the NAR settlement, buyers now have more direct involvement in their agent's compensation. While sellers traditionally covered both sides, buyers today can negotiate their agent's fee as part of their buyer representation agreement. Some buyers may request that the seller cover part or all of their agent's commission as a concession, similar to requesting seller credits toward closing costs.

Buyers may have additional leverage when their agent is also the listing agent (dual agency), when purchasing a For Sale By Owner property, or in markets where buyer's agent compensation is commonly negotiated separately from the purchase price.

Why Working With an Agent Matters

While avoiding commission might seem like an easy way to save money, the data tells a compelling story about the value professional representation provides.

According to the National Association of REALTORS 2025 Profile of Home Buyers and Sellers, FSBO transactions have dropped to just 5% of all home sales, an all-time low. Meanwhile, a record 91% of sellers worked with a real estate agent. The median FSBO sale price of $360,000 was $65,000 less than the $425,000 median for agent-assisted transactions.

Beyond pricing, FSBO sellers face significant challenges. Research indicates that 43% of FSBO sellers report making legal mistakes during the sale process. Nearly half describe the experience as so stressful it brought them to tears, and 64% did not achieve their desired sale price. Common struggles include pricing the home correctly, selling within the desired timeframe, and managing the mountain of required paperwork.

When you factor in that the average FSBO home sells for significantly less than agent-assisted sales, the "savings" from avoiding commission often become a net loss. A skilled agent's pricing expertise, marketing reach, and negotiation skills typically more than offset their fee.

What Your Commission Pays For

Understanding the services included in your agent's commission helps clarify the value you receive. A full-service listing agent typically provides:

Pricing Strategy: Agents conduct comparative market analyses to price your home competitively. Proper pricing is one of the most critical factors in achieving a successful sale. Overpricing leads to extended market time, while underpricing leaves money on the table.

Marketing and Exposure: Professional photography, virtual tours, MLS listing syndication, social media marketing, print materials, and open houses all fall under the agent's purview. Access to the MLS alone provides exposure to thousands of agents and their buyer clients.

Negotiation: From initial offers to inspection responses to closing credits, skilled negotiators can add tens of thousands of dollars to your bottom line while protecting your interests throughout the transaction.

Transaction Management: Coordinating inspections, appraisals, title work, lender requirements, and closing schedules requires significant expertise. Missing deadlines or paperwork errors can delay or derail a sale entirely.

For buyers, your agent provides access to listings, schedules showings, researches property history, identifies potential issues, writes competitive offers, and guides you through the entire purchase process. They also provide crucial guidance on closing costs and what to expect at the closing table.

Finding the Right Agent at the Right Price

The key to getting value from your real estate commission is not necessarily paying the lowest rate. Rather, it is finding a skilled agent whose performance justifies their fee. A discount agent who sells your home for $30,000 less than a top performer would have achieved is no bargain.

When evaluating agents, ask about their recent sales volume, average days on market, and sale-to-list price ratio. These metrics reveal how effectively an agent prices homes and negotiates on behalf of clients. An agent who consistently sells homes at or above asking price in fewer days than average provides quantifiable value.

EffectiveAgents.com takes the guesswork out of agent selection by matching you with professionals based on their actual performance data. Our network of over 50,000 vetted agents has helped clients save over $2.1 billion through superior outcomes. Whether you are selling your home or searching for your next property, data-driven agent matching ensures you work with a proven performer.

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