Whether you’re listing your property or preparing to make an offer, real estate commissions are a big part of the home transaction equation. For sellers especially, understanding the average real estate commission by state gives you a major edge when budgeting, negotiating, and ultimately pocketing more from your sale. For buyers, it helps clarify how agents are compensated and how much is baked into the home’s final price. Yet, as variable as home styles across the U.S., real estate commissions aren’t one-size-fits-all.
Instead, commission rates shift significantly depending on where you live, the local market conditions, and the services provided. While the national average typically hovers around 5% to 6%, homeowners in some states might see much different numbers. This creates both an opportunity and a potential pitfall. Whether you’re looking to save money or want to maximize agent performance, knowing the ins and outs of real estate commissions is essential.
In this guide, we’ll explore how real estate commissions work, how they vary across regions, and what that means for buyers and sellers. We’ll break down who pays, what you’re actually paying for, and what alternatives might be worth considering. That way, you can confidently make the best choices for your next move—wherever that may be.
Understanding How Real Estate Commission Works
At its core, real estate commission is the fee paid to real estate agents in exchange for helping facilitate a home sale. This fee typically comes out of the home’s final selling price, which means that sellers, not buyers, usually foot the bill. However, it’s not as simple as one person paying one agent. Generally, this commission is split between the listing agent and the buyer’s agent.
For example, if a seller agrees to a 6% commission on a $400,000 home, that totals $24,000 in commission fees. That amount is often divided—half going to the listing agent and half to the buyer’s agent. But keep in mind that both agents then split that payment again with their respective brokerages. This means agents may take home only a portion of the total fee, often 1.5% or less per side.
In most U.S. markets, commission rates are not fixed and can be negotiated. The Federal Trade Commission prohibits price-fixing, which means agents cannot legally coordinate or agree on standard fees. Sellers can use this flexibility to negotiate a more favorable rate, especially if the property is in a hot market or expected to sell quickly with minimal marketing effort.
Many sellers don’t realize that a significant portion of commissions go toward marketing the property—photography, staging, listing services, signage, and open houses can all be included. Agents also contribute their time and expertise to help price the home accurately and coordinate showings and paperwork. Understanding these services helps clarify why those fees exist in the first place.
Decoding Average Real Estate Commission by State
While the national average real estate commission by state tends to sit between 5% and 6%, where you live can nudge that number quite a bit higher or lower. Regional demand, property values, and competition among agents all influence commission rates. In competitive housing markets like California or New York, you might find agents open to lower rates due to high volume or faster sales. In contrast, rural states may see higher rates reflecting longer sale timelines or limited agent availability.
According to recent data from the National Association of Realtors, states like Colorado, Massachusetts, and Utah consistently report commissions closer to 4.5% to 5%, often due to fast-moving markets and digital efficiencies. Meanwhile, states like Nebraska, West Virginia, and Mississippi tend to see higher average rates—closer to 6% or even 7% in some cases—driven by slower-moving inventory and fewer agents competing for listings.
It’s also worth mentioning that state-regulated housing policies or norms can impact commission structures indirectly. While no state mandates a fixed rate, local customs do shape seller expectations and agent practices. For example, sellers in Florida often encounter 6% as a starting point in negotiations, whereas in Washington or Oregon, 5% is more common and easier to negotiate down.
Regardless of the state, homeowners should shop around and request detailed explanations of what services each agent includes with their commission. Don’t assume all 6% commissions offer the same value. Transparency helps you compare costs apples-to-apples and ensure your listing gets the attention it deserves.
The Pros and Cons of Traditional Agent Commissions
Paying a traditional real estate commission has several potential advantages. Full-service agents offer wide-ranging support—from home pricing, marketing, and staging, to negotiating and walking clients through closing. Many homeowners, particularly first-time sellers, find reassurance knowing professionals handle the details.
Experienced agents also typically have access to powerful listing networks like the Multiple Listing Service (MLS), expanding your home’s visibility far beyond casual browsers. A strong agent will leverage that exposure, increase traffic through reputable platforms, and potentially secure multiple offers. When professionals do their job well, their contribution can more than justify their commission.
However, there’s an increasing debate over whether these traditional models still offer the best return for sellers, especially in digital-first marketplaces. As more buyers begin their search online, the value proposition of agent-led marketing may diminish. Listing websites, social platforms, and self-service platforms enable owners to reach audiences without the typical markup.
Another drawback is cost inflexibility. Sellers often feel trapped into these 5% to 6% commission models—amounts that could shave tens of thousands off their potential earnings. While the fairness of commissions is still under scrutiny in some legal circles, consumers do have options if they want a different path. You can, and should, explore alternatives if you feel traditional commissions don’t align with your goals.
Alternative Models to Save on Selling Costs
With technology reshaping how we buy and sell, more sellers are exploring nontraditional routes. Flat-fee MLS models, for-sale-by-owner (FSBO), and limited-service brokers are gaining traction—especially in hot markets where homes often sell themselves. These options can help lower your total commission cost without losing control over the process.
Flat-fee MLS platforms, in particular, allow sellers to list a home on major networks while retaining ownership over the sale. For a fixed price, you can include your home in the MLS—typically agents-only territory—without handing over a full commission. Some services even offer optional add-ons like photography, signage, and contract support, allowing a more personalized approach to selling.
For those considering FSBO, it’s easier than ever to manage showings, negotiate offers, and navigate the closing process. However, it’s important to understand your state’s real estate disclosure laws and procedures before diving in. Resources like Nolo’s legal guides can help you understand forms, timelines, and seller obligations to avoid legal missteps.
Some sellers simply want help negotiating buyer-side commissions only and prefer not to pay for full-service representation. In those cases, choosing a limited-service agent or a pay-as-you-go transaction coordinator is a smart cost-control strategy. These hybrid models often provide you with essential tools without charging a traditional rate.
Negotiating Smarter and Maximizing Your Investment
The key to reducing your commission costs effectively starts with research. Interviewing multiple agents and asking for a written breakdown of services lets you evaluate fees in the context of value—not just price. Make sure every service claimed adds tangible benefit to your sale process, and don’t be afraid to push back if the numbers feel bloated.
Use market data to your advantage. If homes in your area sell in days rather than weeks, you’re probably in a seller’s market—which means your agent needs to work less hard to get results. That puts you in a stronger negotiating position to request a reduction in commission or extras like upgraded listing photography at no added cost.
Also know your rights as a home seller. Real estate commissions are not required by law to be 6%, despite what some market veterans might imply. Agencies like the Consumer Financial Protection Bureau advise that sellers should always compare rates and never assume industry “standards” are non-negotiable. This informed mindset can lead to thousands in savings.
For buyers, don’t overlook the impact of commissions either. While you may not write a direct check to agents, their fees are baked into the home’s price. Some buyers negotiate to have part of the listing agent’s commission refunded as a closing credit, but that depends on local practices. Transparency helps both parties make more informed decisions.
Choose a Better Way with Beycome
Homeowners seeking to reduce commission costs without sacrificing service are turning to smarter solutions—and Beycome leads the way. With a mission to simplify your real estate transaction, Beycome offers affordable, high-value tools that empower you to sell or buy your home smarter and faster. Sellers who list with Beycome save an average of $13,185 in commissions, contributing to the over $213+ million saved across 18,000+ closed homes. It’s no surprise that a Beycome home sells every 30 minutes.
Instead of the rigid 6% agent commission, Beycome offers transparent flat-fee options while still giving you access to industry-grade services. Want to price your property with precision? Use our free property value calculator. Considering skipping the agent altogether? Start your journey with our for-sale-by-owner support tools. Or see how our flat-fee MLS packages stack up against traditional models.
Whatever your strategy, Beycome lets you take control of the sale—maximizing your proceeds without compromising professionalism. Make your next real estate move efficient, profitable, and on your own terms.