How Much Is Real Estate Commission?


If you are thinking of selling your home or are a real estate agent looking for a new position, you may be wondering how much is real estate commission. In this article, we’ll look at average real estate agents salaries across the country and explain how commission works so that you can better understand the value of your work.

Generally, real estate commissions are paid by the seller to real estate brokers in exchange for their services during the sale of a property. The amount of the commission is negotiated between the broker and the seller, which means that there is no set rate for how much real estate agents earn. Typically, the more experienced and top-producing agents will receive higher commission rates. Also read

As with most professional fields, real estate agents’ earnings are significantly impacted by taxes and expenses. Federal, state, and self-employment taxes as well as business costs like insurance, membership fees for multiple listing services (MLS), advertising, and more, can all eat into a real estate agent’s profits. As such, despite having one of the highest earning jobs in America, a real estate agent’s salary is not as high as it may seem at first glance.

The typical residential real estate commission in NYC is split between the listing and buyer’s agents. For example, if a property sells for $250,000 with a 6% commission rate, the agent who works with the buyer will receive $30,000 while the agent who worked with the seller will receive $6,000. In some cases, the real estate agent will find both the buyer and seller, in which case they will be credited for both sides of the deal and will receive a full 6% of the sales price.

For luxury properties, the commission is usually much higher. For instance, a 5% commission on a $20 million property would yield a total of $10 million in sales. These types of transactions tend to be more complex and require specialized expertise from top-producing real estate agents.

In the past, the National Association of Realtors required its members to offer buyers’ agents compensation on affiliated MLS broker marketplaces. This policy, known as “cooperative compensation,” reduced competition and kept broker commission rates artificially high, according to lawsuits filed against NAR. In 2024, the NAR agreed to settle these claims by agreeing to pay $418 million and to stop offering brokerage compensation to buyers’ agents on its MLS listings.

As a result of the NAR’s settlement, it is now more common for sellers to negotiate a lower real estate commission with their listing and buyer’s agents. In addition, many sellers are now using Hauseit’s commission calculator to estimate their selling costs and see how a lower real estate commission can help them save money on their transaction. This way, they can make a more informed decision about their agent and broker before settling on a commission percentage. This allows them to maximize their earnings and help them achieve their career goals.


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