Real estate commissions: How much do agents make, and who pays?
Key takeaways
- Most real estate agents get paid a commission from each sale they close, rather than a regular salary.
- The commission is typically a percentage of the home’s final sale price, so they make more on higher-priced homes.
- Rates can be negotiated, but each agent in a sale usually earns between 2.5% and 3% of the sale price.
Affordability is top-of-mind for both homebuyers and sellers these days. And in this do-it-yourself digital age, many people wonder if they really need real estate agents — or, more precisely, if they need to pay agent fees. Here, we’ll take an in-depth look at how real estate commissions work, and how much they really cost you as a buyer or seller.
How much do real estate agents make?
Only a very small portion of agents work on salary — working on commission, for a percentage of the home’s final sale price, is much more common. That means the agent is motivated to close deals, and the more expensive the home, the more money they make.
For years, the typical going rate was 6% in total, usually split down the middle between the buyer’s agent and seller’s agent. But it began to fluctuate with the advent of discount brokers and the rise of online, publicly accessible listings.
Of course, real estate commissions can be negotiated, and nowadays the total typically runs a bit lower. The exact terms of an agent’s commission will vary from sale to sale, and can also depend on the region and which firm they work for (brokerages may get a cut of their agents’ commissions as well). The agent isn’t paid until the sale closes.
Let’s use a 5% total commission as an example. On a $250,000 home sale, that would come to $12,500; split evenly between the buyer’s agent and the seller’s, that’s $6,250 each. But on a $1M sale, a commission at the same rate would come to $50,000, or $25,000 each. Here’s roughly what the agents would earn based on the price a home sells for:
| Home’s sale price | Seller’s agent commission (2.5%) | Buyer’s agent commission (2.5%) | Total commission (5%) |
|---|---|---|---|
| $250,000 | $6,250 | $6,250 | $12,500 |
| $500,000 | $12,500 | $12,500 | $25,000 |
| $750,000 | $18,750 | $18,750 | $37,500 |
| $1,000,000 | $25,000 | $25,000 | $50,000 |
Dual agency
These numbers might change in the case of dual agency, when a single agent represents both the buyer and seller in a transaction. Buyers working directly with a listing agent may have more room for commission negotiation, because the agent will be earning a fee from both parties. Laws about this vary by state; in some states, dual agency is not permitted.
While agents have a fiduciary duty to their clients, with dual agency, the lines can get blurred. But agents are still required to act in their clients’ best interest: “It’s part of our ethics and built into our contracts,” says Samantha Fish, an agent with Wesely & Associates in Auburn, California. “If someone comes into my open house, and they’re interested but don’t have an agent, I might say, ‘Let me connect you with another agent from my office,’ so they feel fully represented throughout the process.”
Average real estate commissions by state
Currently, the national average real estate agent commission is 5.7% total, according to May 2026 data from Clever Real Estate. The average split is not perfectly even, but it’s pretty close: 2.88% to the listing agent (representing the seller) and 2.82% to the buyer’s agent.
Keep in mind, though, that agents may accept a lower commission for high-priced homes to earn a higher amount overall: Their piece of the pie may be smaller, but it’s a richer slice.
Here are the average total real estate commissions by state, according to Clever:
| State | Total average commission rate |
|---|---|
| Alabama | 5.96% |
| Alaska | 5.51% |
| Arizona | 5.82% |
| Arkansas | 5.66% |
| California | 5.47% |
| Colorado | 5.71% |
| Connecticut | 5.57% |
| Delaware | 5.66% |
| District of Columbia | 4.50% |
| Florida | 5.57% |
| Georgia | 5.66% |
| Hawaii | 5.51% |
| Idaho | 5.71% |
| Illinois | 5.53% |
| Indiana | 5.50% |
| Iowa | 5.84% |
| Kansas | 5.84% |
| Kentucky | 5.66% |
| Louisiana | 5.66% |
| Maine | 5.57% |
| Maryland | 5.41% |
| Massachusetts | 5.57% |
| Michigan | 6.20% |
| Minnesota | 5.84% |
| Mississippi | 5.66% |
| Missouri | 5.94% |
| Montana | 5.71% |
| Nebraska | 5.84% |
| Nevada | 5.71% |
| New Hampshire | 5.57% |
| New Jersey | 5.20% |
| New Mexico | 5.82% |
| New York | 5.69% |
| North Carolina | 5.53% |
| North Dakota | 5.84% |
| Ohio | 5.90% |
| Oklahoma | 5.82% |
| Oregon | 5.51% |
| Pennsylvania | 5.77% |
| Rhode Island | 5.57% |
| South Carolina | 5.88% |
| South Dakota | 5.84% |
| Tennessee | 6.05% |
| Texas | 5.88% |
| Utah | 5.71% |
| Vermont | 5.57% |
| Virginia | 5.50% |
| Washington | 5.90% |
| West Virginia | 5.66% |
| Wisconsin | 5.84% |
| Wyoming | 5.71% |
| Source: Clever Real Estate | |
Who pays Realtor fees, the buyer or the seller?
Changes to the way commissions work went into effect in 2024 after a lawsuit settled by the National Association of Realtors (NAR) and several major brokerages. As a result, the longstanding commission model of sellers footing the bill for both their own agent and their buyer’s is no longer in effect.
Today, which party pays for which commission is negotiated upfront, and sellers may or may not agree to pay their buyer’s agent’s fee. Be sure your contract spells out who is paying, and how much, very clearly.
Can you avoid paying real estate commissions?
The short answer is yes. If you’re looking to avoid paying an agent’s full commission, here are some alternatives:
- Go it alone: It’s certainly possible to buy or sell a home without a real estate agent — it’s more common for sellers, with “for sale by owner” transactions. This saves you the fee entirely. But it’s a lot of work, much of it complicated, and the stakes are high. So weigh the pros and cons of going without professional representation carefully.
- Use a low-commission agent: Sellers might consider working with a low-commission real estate agent, who will likely charge much less than a traditional agent would (usually 1% to 1.5% of your home’s sale price). Since they’re receiving a smaller commission on each property, these agents are typically focused on volume and don’t provide as much personal attention.
- Pay a flat fee: There are also brokerages and agents who work on a flat-fee basis, rather than a percentage of the sale price — meaning they earn the same fee regardless of how much your home sells for.
- Work with a homebuying company: Selling directly to an iBuyer or a company that buys houses for cash is another way to avoid paying agent commissions. But the offers from these buyers will be less than you’d likely fetch in a traditional sale, and some iBuyers charge service fees that are equivalent to what you’d pay in commission anyway.
Finally, remember that even if you’re not paying real estate agent fees, there are still plenty of other closing costs associated with selling a home — and buying one.
FAQs
Why we ask for feedback Your feedback helps us improve our content and services. It takes less than a minute to complete.
Your responses are anonymous and will only be used for improving our website.
