For nearly half a century, home sellers have been paying a commission of roughly 6 percent of their property’s selling price — 3 percent to the listing agent and 3 percent to the buyer’s agent. But the rules have changed, and many sellers are asking, Is there still a 3 percent commission in real estate? Do sellers still need to pay the buyer’s agent? In this post, we clarify what’s changed and what you can expect to pay in Realtor fees when selling a house. Due to a landmark court settlement by the National Association of Realtors (NAR), the traditional 6 percent seller-paid commission model is changing. Sellers are no longer automatically responsible for paying the buyer’s agent fees. At first mathematical glance, you might think this means you’ll only pay a 3 percent listing agent fee, but this depends on what’s happening in your market. You might pay more than 3 percent if you decide to go ahead and offer to cover the buyer’s agent fee. Why? Because in a competitive market, this concession can help sell your home faster. There may be qualified buyers looking at your property who can afford the down payment and monthly payments but are unable to come up with additional upfront funds to cover their agent’s commission. You might pay less than 3 percent if the listing fee averages are lower in your market or if you choose to use a discount real estate broker. In the current slow market, average commissions have fallen below 3 percent for both listing agents and buyer’s agents. Last year’s transaction data reveals that the combined national average commission was 5.32 percent — 2.74 percent to the listing agent and 2.58 percent to the buyer’s agent. Using the 2.74 percent and 2.58 percent estimates, here is a table showing what sellers and buyers can expect to pay based on different home sale prices, including if the seller decides to pay the buyer’s agent fee:Is there still a 3 percent commission in real estate?
Why you might pay more than 3 percent
Why you might pay less than 3 percent
Examples of real estate agent commissions
Final selling price of the home
Listing agent fee (2.74 percent)
Buyer’s agent fee (2.58 percent)
If seller pays both (5.32 percent)
$200,000
$5,480
$5,160
$10,640
$300,000
$8,220
$7,740
$15,960
$400,000
$10,960
$10,320
$21,280
$500,000
$13,700
$12,900
$26,600
$600,000
$16,440
$15,480
$31,920
$700,000
$19,180
$18,060
$37,240
$800,000
$21,920
$20,640
$42,560
$900,000
$24,660
$23,220
$47,880
$1,000,000
$27,400
$25,800
$53,200
$1,500,000
$41,100
$38,700
$79,800
$2,000,000
$54,800
$51,600
$106,400
