When selling or buying a home, one of the biggest financial considerations is the commission paid to a real estate agent. These fees can impact both your profits as a seller and your total closing costs as a buyer. While it’s widely accepted that real estate agents get paid for their services, few consumers really understand how those commissions are structured—or whether they’re negotiable. And that misunderstanding comes at a cost.
The average commission real estate agents earn in the U.S. varies but typically hovers around 5% to 6% of the home’s sale price. Split between the buyer’s and seller’s agents, this fee can significantly affect your bottom line, especially in a high-value transaction. Whether you’re listing your home or house hunting, knowing how this commission structure works is essential. You’ll be better prepared to negotiate rates, evaluate alternative selling models, or maximize your home’s overall value.
In this article, we’ll walk through what real estate commissions actually entail, explore typical rates and conditions, and help you evaluate if there are smarter alternatives that offer more control—and major cost savings.
Understanding How Real Estate Commissions Work
Real estate commission is typically a percentage of the property’s final sale price, with 5% to 6% being standard in most markets. This fee is usually paid by the home seller and split between both the listing agent and the buyer’s agent. Each agent’s brokerage might also take a portion of their share, depending on their agreement. While it seems like a simple percentage, that commission can amount to tens of thousands of dollars.
In most cases, the seller agrees to the commission amount when listing the home. When the deal closes, the seller’s brokerage receives the full agreed-upon percentage and then distributes a cut to the buyer’s agent’s brokerage. It’s important to note that the commission isn’t a guaranteed amount. If the home doesn’t sell, the seller usually isn’t obligated to pay it—unless a separate agreement states otherwise.
This system incentivizes agents to work toward closing deals efficiently. But it also inflates the cost of home sales, and many sellers don’t realize that commissions are negotiable. The idea of fixed fees is a myth, and depending on your market, you can often negotiate a lower rate or choose a model that offers greater transparency and lower costs.
For further clarity on agency-backed housing transaction details, the
Consumer Financial Protection Bureau
provides education around how these transactions are structured, along with insights into buyer and seller rights.
What Impacts the Average Commission Real Estate Agents Earn?
Several factors can influence the actual commission agents earn on a deal. Market conditions play a central role. In hotter markets where homes sell quickly and competition is fierce, agents may offer lower commission rates as a way to attract clientele. In slower regions or during economic downturns, agents might stand firm on their standard fees, citing the increased time and effort needed to close a property.
Property price also heavily impacts commission. While the percentage might stay the same, a higher-priced home leads to a larger dollar-value commission. Similarly, unique or difficult-to-sell properties may come with higher or custom commission agreements, as agents expect to put in more specialized work. In luxury markets, it’s increasingly common for sellers to negotiate lower commission rates because of the high transaction value.
Agent experience and brokerage policies factor in as well. High-performing or more experienced agents may command higher rates, particularly those working for prestigious or full-service firms. In contrast, newer agents or discount brokerages sometimes offer reduced fees in exchange for fewer services or faster lease-closure speed. Knowing these variables can help you better evaluate whether the commission structure aligns with the value you’re actually receiving.
According to the
National Association of Realtors
, nearly 89% of sellers used a real estate agent in 2023, yet a growing number have begun questioning traditional commission structures—especially as digital platforms offer alternatives with greater control and lower fees.
Pros and Cons of the Traditional Commission Model
The traditional model certainly offers convenience. For most people, selling or buying a home is a highly personal, emotional, and time-consuming process. Real estate agents help navigate pricing, marketing, negotiations, and paperwork, often making the experience smoother. For sellers, having an agent means greater market exposure through professional networks and MLS listings. For buyers, agents can offer early access to listings and support throughout the financing and offer process.
However, the cost of this support can be substantial. A 6% commission on a $400,000 home comes out to $24,000—money that could otherwise be invested in your next property or saved for moving expenses. Moreover, not all agents provide the same value; some may rely heavily on templated strategies or offer minimal support yet expect full commission. That inconsistency has contributed to growing dissatisfaction with the traditional agent-based approach.
The inflexibility of the model is another major drawback. Sellers often don’t realize they are locked into standard commission contracts that may not account for the unique value of their property, their retail or marketing knowledge, or their willingness to do some of the legwork. In such cases, sellers may end up overpaying for services they didn’t necessarily need in the first place.
To assess whether you’re paying a fair price, referencing resources from the
Bankrate mortgage and home finance platform
can help clarify average fee structures and offer insights into alternatives based on market conditions.
Alternatives to Traditional Commission Structures
Today’s sellers and buyers have more choices than ever before. Flat-fee MLS listing services, limited-service brokerages, and for-sale-by-owner (FSBO) models give homeowners routes to sell without paying full commission. These options allow sellers to retain control over pricing, showings, and negotiations, with access to professional tools—often at a fraction of the price.
Flat-fee models allow homeowners to list their property on the MLS for a set price, often under $500. The exposure typically equals that of agent-assisted sales, giving sellers the visibility to attract buyer agents while maintaining control over the sales narrative. For sellers confident in their ability to handle paperwork and negotiation, this option can save thousands without sacrificing results.
For-sale-by-owner strategies also appeal to entrepreneurial homeowners. While these require more involvement—from marketing to fielding inquiries and handling contracts—the savings can be substantial. Many FSBO sellers report saving around 5% of their home’s value by avoiding commission. However, these models require significant time, diligence, and familiarity with the process.
Agent assist services offer another hybrid route, allowing sellers to pay for only the services they need. Whether it’s help with pricing strategy or managing the closing documents, this model may reduce costs while still delivering professional input when it matters most. For buyers, these models can also offer rebates or partial refunds, placing money directly back into your pocket at closing.
Why Sellers and Buyers Are Choosing Beycome
If the traditional system feels outdated or overpriced, you’re not alone. Home buyers and sellers across the country are turning to platforms like Beycome to reinvent the transaction process—and pocket more money along the way. By eliminating bloated commissions and empowering users to take greater control over their transactions, Beycome reshapes how real estate works for today’s informed consumer.
With over 18,000 homes closed and more than $213 million in commissions saved, Beycome users enjoy an average savings of $13,185 per transaction. A Beycome home sells every 30 minutes, proving that smarter methods can deliver fast, high-value results. For sellers ready to maximize visibility, the Flat Fee MLS option offers nationwide exposure for a fraction of the typical cost.
Buyers benefit, too. Whether you’re early in the search process or ready to close your dream home, Beycome’s buyer platform supports direct access to listings, seller engagement, and efficient communication tools. Plus, sellers can use Beycome’s property value calculator to price their homes accurately and attract competitive offers without overpaying agents for valuation advice.
In the end, understanding the average commission real estate agents charge is just the beginning. The real question is whether you’re willing to settle for old industry norms—or ready to explore smarter, leaner paths to buying and selling your next home.