If you’re planning to sell a home, one of the first questions that comes up is: How much are real estate commission fees? Since these costs are often a seller’s largest expense, understanding how they work—and what you can negotiate—can save you thousands.
This guide explains the average real estate commission, how it’s split, factors that affect it, and what alternatives exist.
What Is a Real Estate Commission Fee?
A real estate commission fee is the payment made to real estate agents for their services. This fee covers:
- Marketing the property (photos, open houses, online listings)
- Guiding showings and negotiations
- Handling contracts and closing paperwork
Instead of being a flat amount, it’s usually charged as a percentage of the home’s final sale price.
What Is the Average Real Estate Commission in 2025?
In the United States, the average real estate commission is about 5–6% of the sale price.
For example:
- Home price: $400,000
- Commission rate: 5.5%
- Total commission: $22,000
This fee is usually paid by the seller at closing.
How Are Commissions Split Between Agents?
The total commission doesn’t all go to one person. It’s typically divided between:
- Listing agent (seller’s agent) – about half
- Buyer’s agent – the other half
- Each agent’s brokerage also takes a portion before the agent keeps their share
So if a $400,000 home sells with a 6% commission ($24,000 total):
- $12,000 goes to the listing side
- $12,000 goes to the buyer’s side
- Each side’s agent keeps less after brokerage cuts
Real Estate Commission Rates by State
Commission rates vary depending on location:
- New York: ~5.8%
- California: ~5.1%
- Texas: ~5.6%
- Florida: ~5.4%
These differences are driven by local housing demand, average sale prices, and state regulations.
Factors That Affect Commission Fees
Not every seller pays the same percentage. Rates change based on:
- Home price – Higher-priced homes sometimes get lower percentage fees
- Market conditions – In hot markets, agents may accept less
- Agent experience – More experienced agents may charge slightly higher
- Negotiation – Commissions are not fixed; they can be discussed
Flat-Fee vs. Percentage Commissions
Some agents or brokerages offer alternatives:
- Flat-fee listing: A set dollar amount, regardless of sale price
- Discount brokers: Lower percentages in exchange for limited services
These can work well for confident sellers but may reduce the level of service or marketing exposure.
Are Commissions Negotiable?
Yes. Sellers can often negotiate:
- A lower overall percentage (e.g., 5% instead of 6%)
- A tiered fee (higher % if sold below a price, lower % if sold above)
- Reduced buyer’s agent fees in competitive markets
If you’re planning to sell, understanding how commissions work will help you estimate your true costs and net proceeds. For a personalized breakdown, try HouseCostEstimator.com to see how fees and other expenses impact your bottom line.
How Much Do Agents Actually Keep?
Many sellers are surprised to learn that agents don’t pocket the entire fee. After splitting with the other side and their brokerage, an agent may take home 30–50% of the total commission.
FAQs on Real Estate Commissions
Who pays the real estate commission?
In most U.S. transactions, the seller pays it from the sale proceeds.
Can I sell without paying commission?
Yes—through for sale by owner (FSBO) sales, but it often reduces visibility.
Do buyers ever pay commission directly?
In some markets, yes, especially with recent industry changes making fees more transparent.
What’s the lowest commission I can expect?
Some discount agents charge as little as 1–2%, but service levels may differ.
Do commissions affect home prices?
Indirectly, yes. Sellers often account for commission costs when setting asking prices.
Conclusion
Real estate commission fees are a big part of the cost of selling a home, but they’re also flexible. The national average sits around 5–6%, but actual costs vary by state, market conditions, and negotiation.