When buying or selling a home, one question usually comes up early: who pays the realtor commission? It may not feel as urgent as securing financing or preparing a home for showings, but commission rules can shape your costs and your negotiating power.
In the U.S., real estate commissions are common and often significant. Most people associate them with the seller, but the reality is more nuanced. Market conditions, representation, and deal structure all influence how commissions work in practice.
Many buyers and sellers assume these fees are fixed or unavoidable. That assumption causes problems. Commission structures exist largely because of convention, not because the law requires them. Flexibility does exist, but many people overlook it. Buyers, sellers, and agents often rely on “standard practice” without questioning it, and those assumptions can quietly affect the final outcome.
As the real estate market evolves, new tools and alternative models give consumers more control than before. Understanding realtor commissions is not about memorizing rules. It’s about knowing where options and leverage actually exist.
If you plan to buy or sell, this knowledge matters. Clear understanding leads to better decisions. In real estate, information does more than reduce confusion—it strengthens your position at the table.
How Real Estate Commissions Work
At its core, a real estate commission is a fee paid to agents involved in a property transaction. Traditionally, this amount is a percentage of the final sale price of the home. The most common total commission rate in the U.S. is around 5% to 6%. This amount is usually split evenly between the listing agent, who represents the seller, and the buyer’s agent.
The commission is agreed upon in the listing agreement when the seller hires a real estate professional. Once a transaction closes, the seller’s brokerage collects the full commission and distributes the appropriate portion to the buyer’s brokerage. Each brokerage then compensates the individual agent involved.
Commissions are paid out of closing proceeds. That means most sellers don’t have to pay out-of-pocket—rather, it comes from the amount they receive when the sale finalizes. However, while it may seem the seller pays the fee, the cost often indirectly factors into the buyer’s offer, since sellers usually adjust home prices to account for commission costs.
Because this system is largely standardized, it leads to some misunderstandings. Buyers might assume they’re getting agent services for free, while sellers may overlook negotiation opportunities that could reduce their costs. In reality, commission structures aren’t set in stone, and there’s room for change depending on the scenario.
Who Pays Realtor Commission, and When?
In a typical U.S. real estate transaction, the seller pays the full realtor commission. This fee covers both the listing agent and the buyer’s agent. It is deducted from the seller’s proceeds at closing. This standard stems from the historical structure of residential brokerage, where sellers are seen as the employers of agents.
Although it seems the buyer avoids paying any commission, they may shoulder the fee indirectly. Often, sellers calculate expected commission expenses into their listing price. For example, if a seller lists a home for $400,000 with a 6% commission rate, $24,000 goes toward agent compensation. One could argue some of that amount might have translated into price savings for the buyer under different circumstances.
A growing trend has encouraged renegotiation of these structures. Some homebuyers now ask sellers to rebate a portion of the commission toward closing costs. In heated markets or buyer-favorable conditions, sellers may agree. The [Consumer Financial Protection Bureau explains](https://www.consumerfinance.gov/) that transparency around fees—especially mortgage-related ones—is essential for smarter financial planning, and commissions play into this broader framework.
There are also exceptions to the standard model. In rare cases, buyers may contractually agree to compensate their agents directly. This typically applies to buyers working through exclusive agency agreements or in transactions involving new construction where builders set specific terms. Sellers using discount services or selling by owner may also negotiate lower commission shares.
Negotiability and Alternatives to Traditional Commission Models
The idea that real estate commissions are non-negotiable is a myth. Every party involved has the ability to negotiate commission structure before a contract is signed. However, many consumers don’t realize this—sometimes out of habit, other times due to a lack of clear information provided during the listing process.
Commission rates are not regulated by law and can vary significantly by region, agent experience, property type, or transaction complexity. Sellers can often reduce commissions if they agree to limited services or if their agent is also representing the buyer. Dual agency scenarios, while more complex and subject to disclosure rules, can reduce the total fees paid due to the overlap in representation.
Technology-driven alternatives are also changing the conversation. Flat-fee, à la carte, and digital brokerages allow sellers to retain more flexibility while maintaining access to essential services. According to guidance from [Nolo](https://www.nolo.com/), consumers have every right to shop around and request fee disclosures up front so they can compare offerings among agents or platforms.
These models particularly appeal to informed homeowners who are confident in managing parts of the sale, such as showings, negotiations, or paperwork. For example, a flat-fee MLS listing service allows sellers to get property exposure without committing to a full-service commission. Options like this maintain control while still reaching a large buyer audience.
Hidden Costs and Commission-Related Considerations
While commissions are the most visible expense associated with realtor fees, they aren’t the only cost that matters. Sellers should consider how commissions impact net proceeds, especially once property taxes, repairs, and closing costs are factored in. What looks like a strong offer might shrink quickly when viewed in the context of fees deducted from the total sale value.
Buyers face their own version of cost awareness. Even when they don’t pay commission directly, they pay closing costs that can range from 2% to 5% of the loan amount. Additionally, if buyers unknowingly choose homes where agent commissions are split unfavorably, it could impact the level of service their agents can afford to provide or feel motivated to deliver.
Transparency is key to avoiding frustration or surprises. Forward-looking agencies and sellers who use itemized breakdowns in their agreements can provide clearer financial foresight for all parties. The [National Association of Realtors](https://www.nar.realtor/) encourages this type of agent-client engagement to ensure fair representation and a more trusting market environment.
In some specialized markets—or when home values are particularly high—creative structures like capped commissions or performance-based fees have begun to emerge. These alternatives tie payment to speed of sale or percentage over asking price, incentivizing agents while potentially reducing overall seller burden.
Is Paying a Full Realtor Commission Always Worth It?
There’s no single right answer when determining value from traditional commission-based service. For homes needing extensive marketing or negotiation attention, paying standard rates may make sense. A skilled agent brings pricing expertise, market reach, and experience in handling unexpected complications—all of which can protect sellers from costly mistakes.
However, in high-demand markets or when sellers possess real estate experience, a full-service approach isn’t always necessary. Many recognize that if the process doesn’t require complex staging, broad promotion, or knowledge of local ordinances, they may reach the same buyer pool through a simplified approach. This is especially true with increased access to market data and legal templates online.
Buyers face a parallel issue—especially when unsure whether their chosen agent offers genuine value or repeats information already available from listing platforms. Buyer’s agents do play critical roles in negotiation and contract comprehension, but their value must match the commission they receive—even if indirect.
Tools like online mortgage calculators, FSBO platforms, and government-backed educational portals such as the [Federal Housing Finance Agency](https://www.fhfa.gov/) keep both parties more informed than ever. Smart clients understand what they’re paying for and choose representation—or not—based on effort versus cost.
How Beycome Helps You Keep More of What You Earn
Real estate commissions don’t need to eat into your equity—at least not when you’ve got smarter tools. Beycome helps buyers and sellers take control of the transaction and minimize or eliminate commission expenses altogether. The results speak for themselves: over 18,000 homes closed, with more than $213 million saved in commissions. On average, our customers keep $13,185 more in their pocket per transaction.
By removing unnecessary middlemen and placing cutting-edge tools in your hands, Beycome turns knowledge and transparency into measurable value. We understand who pays realtor commission and why—and we believe you deserve to pay less while still unlocking premium results. With a home closing through Beycome every 30 minutes, homeowners and buyers alike are discovering an easier path to the finish line.
Whether you’re looking to list your home on the MLS, calculate how much your home is worth, or start the journey to buy your next place, Beycome helps you skip traditional commissions without skipping results. Join thousands of five-star reviewers and experience a smarter way to move today.
Other FSBO Resources That You May Be Interested In