If you’re buying or selling a home, chances are you’ve wondered, “How much commission do realtors make?” It’s one of the most common questions in residential real estate—and for good reason. Realtor commissions often make up a significant portion of the transaction costs, yet few fully understand how they are calculated or distributed. Whether you’re a first-time buyer, an experienced investor, or a homeowner ready to sell, knowing what agents earn and why can help you make smarter decisions.
Real estate commissions are typically baked into the home selling price and paid at closing. While they may seem like invisible fees, they directly affect your bottom line as a seller and indirectly influence what buyers ultimately pay. Understanding how commission works can empower you to negotiate better deals, evaluate alternatives, and reduce unnecessary costs while still receiving expert guidance throughout the process.
What Determines How Much Commission Realtors Make?
The industry standard for realtor commissions usually falls between 5% and 6% of the home’s sale price. This fee is commonly split between the listing agent (representing the seller) and the buyer’s agent. So if a home sells for $400,000 and the commission is 6%, the total commission paid is $24,000—divided $12,000 each if it’s an even split.
However, that doesn’t mean either agent pockets the full amount. Most agents work under a brokerage, which also takes a cut of the agent’s earnings. These splits vary based on the agent’s experience, performance, and brokerage agreement. A seasoned agent might keep 80%, while a newer one could receive just 50% of their portion. Therefore, although the seller technically pays the commission, these payments pass through multiple layers before reaching the individual agent.
The listing agreement you sign when selling your home outlines the commission structure. Sellers can attempt to negotiate these fees, and in some competitive markets, agents may agree to lower rates. However, buyers don’t usually pay agent commissions directly. Their agents are compensated through the seller’s payment at closing, which is one reason buyers often don’t realize how commissions impact the final transaction cost.
Commission structures are also influenced by local customs and market dynamics. In fast-moving hotspots, commission rates might shift due to high demand and competition among agents. Conversely, in slower markets, agents may stick firmly to established percentages. It’s essential to know your local conditions to understand what typical commissions look like in your area.
How Are Commission Splits Structured?
Now that we’ve answered the base question—how much commission do realtors make—it’s worth exploring how that commission gets carved up. At first glance, it may seem excessive, but there are many hands in the pie, each playing a vital role in your home transaction. The initial split goes between the listing agent and the buyer’s agent.
Suppose a 6% commission is in place and each agent receives 3%. Next comes the brokerage cut. Real estate agents typically affiliate with brokerages for legal oversight, brand exposure, tech tools, and marketing resources. Brokerage splits vary. One agent might have a 70/30 arrangement where they keep 70% and the brokerage collects 30% of their received commission. That could reduce a $12,000 share to $8,400 after the brokerage cut.
Some teams or dual-agency arrangements can alter the dynamic further. A dual agent represents both buyer and seller, often retaining the full commission. However, dual agency isn’t legal in every state and has inherent drawbacks, such as potential conflicts of interest. Teams allocate commissions differently too, with structure-dependent payouts among team leaders and junior agents.
It’s also key to consider agent expenses. Realtors usually cover their own marketing budgets, licensing fees, MLS dues, continuing education, insurance, and travel costs. Once all overhead is accounted for, their actual earnings could be significantly lower. This breakdown helps explain why the perceived high commission figure does not always equate to proportionally high profit.
Advantages of Working with Commission-Based Realtors
Despite the costs, there are valid reasons why homeowners and buyers continue to work with traditional agents. One key advantage is market expertise. From pricing your home competitively to preparing it for listing and navigating offers, agents provide invaluable support backed by deep local experience. Their guidance often leads to a quicker sale, better negotiations, and fewer legal surprises.
Commission-based incentives can drive realtors to work diligently on your behalf. Agents don’t get paid unless a deal closes, so their interests generally align with yours: a successful transaction. This performance-based compensation model motivates proactive communication, strong negotiation, and solid follow-through at every stage of the process.
Agents also handle the bulk of the paperwork, deadlines, and disclosures that can be overwhelming for the average buyer or seller. Their familiarity with required documentation can reduce errors and delays. According to the National Association of Realtors, 89% of buyers used a real estate agent in 2023, illustrating the value many still place on this professional guidance.
Networking is another overlooked benefit. Skilled agents often have contacts in appraisal, lending, inspection, and title services that can significantly streamline the experience. If you’re selling, they may even know motivated buyers seeking homes like yours, reducing time on the market.
Drawbacks to Traditional Commission Models
While realtors offer meaningful services, traditional commissions can be hard to justify as home prices rise. On a $600,000 sale, a 6% fee means $36,000 in commission—an amount many sellers would rather keep or allocate elsewhere. That’s a serious drawback for homeowners focused on maximizing profits.
In some markets, the level of service doesn’t always match the cost. Sellers may feel shortchanged if agents rely primarily on automated tools rather than personalized support. This dissatisfaction has led to a rise in alternatives, including flat-fee MLS listings and broker-less services. These options aim to preserve homeowner equity while still offering access to essential listing platforms and some support services.
There’s also the issue of perceived bias. Since commissions depend on the final sale price, there’s an incentive to close quickly rather than hold out for the best offer. While most agents maintain ethical standards, it’s natural for clients to second-guess motives when large sums are at stake. The commission model can blur the lines between service and self-interest.
Buyers may also bear hidden costs, especially when agents steer clients toward higher-priced properties that may lead to better commissions. It’s one reason financial watchdogs like the Consumer Financial Protection Bureau encourage transparency in real estate transactions and informed decision-making throughout the process.
Alternatives That Save You Thousands with Beycome
If you’re wondering whether a traditional commission-based model is the right fit, there are clear alternatives that deliver more value with fewer costs. That’s precisely what Beycome was built to do. Beycome empowers homebuyers and sellers with tools to navigate their own real estate transactions while saving tens of thousands in agent commission fees. In fact, the average user saves $13,185—money that stays in your pocket without cutting corners on service or exposure.
With over 18,000 homes closed and more than $213 million saved in commissions, Beycome has helped thousands of people complete successful real estate transactions on their terms. A Beycome home sells every 30 minutes, and its intuitive process makes managing your sale or search both rewarding and efficient. No guesswork, just practical, tested systems enhanced by friendly support along the way.
Want to know your home’s true value before listing? Our property value calculator helps you identify your ideal starting point. Looking to list without paying a full commission? Learn how to access the MLS as a seller. If you’re on the other side of the deal and ready to buy, we’ll help you proceed with confidence. Explore our streamlined home-buying experience to turn browsing into ownership—without overpaying for advice you don’t need.