How Much Commission Does a Real Estate Broker Receive?
See how much real estate commission you’ll pay to sell your home and how the commission is split between the brokers and the agents.
When you sell your home, you may wonder how much real estate commission you’ll pay, how those commissions are split, and how much you’ll profit from the sale. The average total commission on a home sale is 5% to 6% of the total sale price. This breaks down to around 2.5% to 3% for the listing agent and another 2.5% to 3% for the buyer’s agent.
In this article, we explain how much real estate commission you’ll pay to sell your home and how the commission is split between the brokers and the agents. To better answer your questions, we spoke with top-performing agents Rick Ruiz, who sells more than 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.
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How are real estate agents paid?
Real estate agents are licensed professionals who work for a real estate broker or brokerage firm. When an agent gains enough experience, they can branch out on their own as a broker. According to the National Association of Realtors (NAR), 88% of agents work as independent contractors, not employees.
Agents are typically paid a commission on their sales, but some are paid a salary plus commission on their sales, and a minority are paid a salary only.
Before 2024, the traditional home sale commission was typically paid by the seller and was split 50/50 between the listing agent and the buyer’s agent. On March 15, 2024, the National Association of Realtors (NAR) announced a landmark lawsuit settlement that changed the way real estate agent commissions were handled. These changes to the commission rules and regulations took effect starting August 17, 2024, and “decoupled” seller and buyer agent compensation.
This means that the seller is now on the hook for the listing agent commission, while the buyer is expected to shoulder the buyer’s agent commission. However, as with all aspects of the home sale transaction, who pays for all or a portion of the commission is negotiable.
The 5% to 6% commission on a home sale, with 2.5% to 3% going to each agent, does not fully go into their pocket. How much an agent is paid depends on the broker they work for.
According to Glassdoor, the national average salary for real estate agents is $152,788 with an estimated $90,158 in the form of bonuses and commission.
However, today’s competitive market has increased the number of new agents, which has increased competitiveness between agents. Dombrowsky believes this has caused a widening salary gap between top sellers and average sellers.
“The agent who has less experience, who works exclusively as a buyer’s agent, or who is doing the business part-time is going to be making less because they’re not always winning the bidding war,” he explains.
