How to Negotiate Real Estate Agent Commission
We explain how to negotiate a lower real estate agent commission rate and still receive comprehensive services.
Editor’s note: On March 15, 2024, the National Association of Realtors (NAR) announced a landmark lawsuit settlement that will change the way real estate agent commissions are handled in the future. These changes will “decouple” seller and buyer agent compensation. Industry experts predict that this decoupling will likely lower agent fees and give buyers the ability to negotiate commission amounts directly. Learn more.
The commission you pay your real estate agent to help sell your home may seem steep. You want the best return on your largest investment so you can put it toward a new home, your kid’s college fund, or retirement. Fortunately, the fee you pay your real estate agent is absolutely negotiable.
In this article, we’ll walk you through the process of negotiating your real estate commission, and provide insights into whether seeking a lower rate will fit your selling objectives. To better answer your questions, we spoke with top-performing agents Rick Ruiz, who sells homes nearly 46% quicker than the average Las Vegas agent; and Robert Dombrowsky, who works with over 85% more single-family homes than the average Fair Lawn, New Jersey agent.
Connect with a Top Agent
It takes just two minutes to match clients with the best real estate agents, who will contact you and guide you through the process. To connect with an agent, simply tell us a little bit about your property (single-family, condo, townhouse, mobile home, commercial, or vacant lot) and how soon you’re looking to sell.
What is a typical real estate agent commission?
The average commission rate for a home sale is 5% to 6%, traditionally deducted from the net proceeds of the seller and split 50/50 between the listing (or seller’s) agent and the buyer’s agent.
This commission structure changed in 2024 to decouple the listing agent and buyer’s agent commissions. A listing agent and a buyer’s agent still typically receive the same commission amount of around 2.5% to 3% each, with negotiations determining who pays for each agent’s commission.
Who pays a real estate agent’s commission?
According to new commission rules and regulations, the seller is on the hook for the listing agent commission of around 2.5% to 3%, while the buyer will pay the 2.5% to 3% buyer’s agent commission. Still, many sellers offer to pay the buyer’s agent commission as an additional marketing tool for their property.
However, the buyer and seller don’t pay the fee directly to the agents. The escrow or settlement company that is overseeing the closing receives payment from the buyer’s lender (or the buyer if it’s an all-cash purchase) and then distributes all payments, including the commission checks to each agent’s brokerage at closing. The listing agent and the buyer’s agent then receive their commission from their brokers.
“At the end of the day, the commission payment comes out of the transaction,” says Dombrowsky.
Do the buyer and seller agents keep all the commission?
No. Agents receive part of the total commission from their brokerage. The amount the agent keeps – typically 50%, but up to 95% – depends on each agent’s experience, the number of homes they’ve sold, and the brokerages that they work for.
Below is an example of how a 6% real estate commission is typically split in an agent-assisted home sale with the seller covering both the listing agent and the buyer’s agent commission. We’ve used a sale price of $400,000.
6% commission split example
Seller pays 6% commission: $24,000
How that $24,000 might be split:
| Seller commission | Selling brokerage share | Selling agent share |
| $12,000 (3%) | $6,000 (1.5%) | 6,000 (1.5%) |
| Buyer commission | Buyer brokerage share | Buyer’s agent share |
| $12,000 (3%) | $6,000 (1.5%) | 6,000 (1.5%) |
In our example above, the brokerage received 50% of their agents’ commissions. Here are the (agent/broker) commission splits for some of the top brokers in the country:
- Century 21: 50/50
- RE/MAX: starting at 60/40
- Keller Williams: 70/30
- ExP: starting 80/20
- HomeServices of America: starting at 80/20
- Compass: starting at 80/20
Here is how the commission will look like if the seller pays for the listing agent’s 3% commission, while the buyer pays for the buyer’s agent’s 3% commission.
Seller pays 3% listing agent commission: $12,000
Buyer pays 3% buyer’s agent commission: $12,000
| Seller commission | Selling brokerage share | Selling agent share |
| $12,000 (3%) | $6,000 (1.5%) | 6,000 (1.5%) |
| Buyer commission | Buyer brokerage share | Buyer’s agent share |
| $12,000 (3%) | $6,000 (1.5%) | 6,000 (1.5%) |