How Much Is Real Estate Commission?


Real estate commissions are paid to the agents and brokers that facilitate home

sales. They’re not fixed amounts, but rather percentages of the total sale price.

Generally, the agent who represents the seller receives more of the commission than

the buyer’s agent. The exact amount of the commission depends on the contracts

between the agents and clients.

However, the real estate commission doesn’t go straight to the agents. In order to

practice, real estate agents must work for and be licensed by a broker. The brokers

take a cut of the commission to cover expenses like advertising, sign rentals, and

office space. The brokers also want to be sure that they are being paid a fair amount

for their services and that they aren’t getting ripped off by their agents. On a

$200,000 sale, for example, the broker and agent would each get $10,000.

Then there are the other expenses involved in real estate. In addition to the

brokerage fee, there are costs for items like mortgage fees, title insurance, attorney

fees, and transfer taxes. Those can add up quickly, especially for high-priced


A real estate transaction requires a lot of time and effort on the part of the sellers,

buyers, and their agents. The agents are responsible for marketing the property,

holding open houses, showing the property to potential buyers, negotiating the

contract, and facilitating the sale from contract date to closing. Also read


As a result, the commission rate varies greatly depending on the local market and

the price of the home. It’s important to find a Realtor who you trust and who

understands your needs and expectations. Oftentimes, an agent will offer lower

commission rates in exchange for repeat business from the same client. For

example, if you’re planning to buy in the same area as your selling property, offering

to have the same agent represent you when you purchase can be an incentive for

them to lower their rates.


Another thing to keep in mind is that the seller pays the Realtor’s commission, not

the buyer. That’s why it’s essential to have a good relationship with the buyer’s

agent so that you can convince them to show your property to their clients.

It may seem counterintuitive to pay for the buyer’s agent’s commission, but if you

think about it, this is an investment. The real estate agent you hire will do a lot of

work to market your property, including professional photography, online and offline

marketing, and attending open houses. In fact, Butera says that 90 percent of her

work on a listing occurs before it even goes live.