Who Pays A Real Estate Agents Commission on a House Sale?

Share on

Who Pays A Real Estate Agents Commission on a House Sale

If you’re looking to sell a house, you’ve thought about getting the help of a real estate agent. 

The salary that agents earn annually is contingent on various components, such as the transactions they finish and their commissions earned.

Most real estate agents earn their keep through commissions dependent on the selling price of a property; flat fees are an option, albeit rare. Here’s an overview of how real estate agents make money and what you can expect to pay.

Real Estate Agent Commission-How It Works

Commission fees typically fluctuate between 5-6% of the total sale price, although there may be exceptions depending on current market trends.

Unless you choose the for-sale-by-owner (FSBO) route, you’ll pay these fees as a seller.

Typically, the seller pays the commission for the seller’s agent and the buyer’s agent. Sellers usually include this cost in their asking price. Thus, buyers pay at least a portion of the commission through an inflated purchase value.

Real estate agents are sales professionals who must practice their trade under a designated brokerage’s guidance.

Real estate brokers ensure that all relevant state and national real estate regulations are adhered to, thus guaranteeing an ethical transaction for both parties involved. Additionally, these agents cannot independently receive commissions from clients, which is strictly prohibited by law.

With the ability to work autonomously, a real estate brokerage has the authority to acquire real estate agents as their employees. Every single real estate office has one official broker. The appropriate proceeds from the sale go directly to a broker who distributes them among all agents engaged in the transaction.

It is only possible to be called a Realtor when you are affiliated with the National Association of Realtors (NAR) and comply rigorously with their ethical code. Both real estate agents and brokers can qualify for this title.

When selling a property, you and a listing broker will sign an agreement detailing the terms of the sale, including the listing price and the Realtor commission.

This contract typically includes commission fees you pay – which are always negotiable. Moreover, it is illegal for real estate professionals to attempt in any way to standardize or impose specific commission rates.

Two young homeowners negotiate with a realtor to settle who pays real estate agent commission.

Can You Negotiate Real Estate Agent Commission

Homeowners should know that real estate commissions can quickly become one of the highest closing costs. Thankfully, these fees are fully open to negotiation.

You may be obligated to pay a certain amount; however, there is often leeway in the percentage that an agent can charge.

Before heading into any negotiation, it is critical to have a solid plan and rationale for why you believe the agent should reduce their commission. Here are the four tips on how to prep for negotiating and what will likely help in securing the best rate for you.

Interview agents

For the best outcome and an advantageous bargaining position, it is essential to interview at least three real estate agents before selecting one.

Focus on their expertise in your local market. But also consider how well they will align with your personality and whether or not they can help you reach your desired home sales objectives.

If you’re willing to take a risk on a younger agent who is looking for more clients, the commission rate may be lower than usual.

Two homeowners research the market to figure out who pays real estate agent commission.

Do market research

Try evaluating the local real estate market if you’re hoping to score a great deal when selling your home. In a seller-friendly atmosphere, listing agents may be more inclined to reduce their agent fees because the sale takes less effort from them.

Conversely, when inventory is abundant in a buyer’s market, and homes take longer to sell locally, agents may be less likely to accept reduced commissions.

List your house during an off-season period when agents have little business. They could be more open to haggling over Realtor fees.

Know local commission rates

Understanding the norms of your area will provide you with a great point of reference for negotiations, ensuring that both sides are maintaining realistic expectations for the total commission.

Be a repeat customer

You can offer your agent multiple commission opportunities. By hiring them as a home seller and the subsequent act of home buying, agents may be open to negotiating their rates.

Two elderly homeowner talk wth their realtor about the benefits of working with a real estate agent.

Is It Beneficial to Work With a Real Estate Agent?

If you’re considering buying or selling a home, the decision to employ an experienced real estate agent may be daunting. Some individuals will forgo working with agents because they believe real estate commissions are too steep. 

Real estate agents can be beneficial for the following reasons.

Market knowledge

With an experienced real estate agent, you won’t have to worry about browsing multiple properties that don’t fit your needs. Realtors’ expertise lies in their knowledge of the whole housing market and the average home sale price.

Access to real estate data

The real estate data they possess include:

  • Median and average sales prices
  • Ratios of list-to-sold prices
  • Price per square foot of relevant properties

They can also identify comparable real estate information for you. They also take care of the paperwork you need to sell a house

Professional network

Real estate agents excel at networking and are familiar with practically everyone related to selling a house. An advantage of hiring an agent is that they will provide you with a list of reliable service providers with whom they have had successful working relationships. 

Agents work with the following professionals: 

  • contractors
  • home repairers
  • staging companies
  • title companies
  • landscapers
  • plumbers
  • painters


Realtors have been in real estate for many years and know how to market a house to potential buyers to ensure attendance at an open house.

With a valid real estate license, one can access Multiple Listing Services (MLS). Consequently, enlisting an agent is essential if you wish to list your home on this platform. 

Staging help

Agents are professionals in staging homes for sale – they know what potential buyers’ eyes will gravitate towards. Whether rearranging furniture or bringing in props from their collection, agents employ strategic tactics to make your house look ready to sell.

Who Pays Real Estate Agent Commission When a House Sells

Depending on market conditions, commission rates usually range from 5-6% of the sale price; however, higher or lower commissions may also be possible. Your agent and the buyer’s agent determine the commission split.

Most of the time, there will be a 50/50 split between your agent and the buyer’s agent commission.

The seller typically pays the commission unless the buyer and seller agree on a split. Most sellers consider this cost when setting their asking price. One can claim that buyers always bear part of its burden – directly or through an increased purchase price.

Other Things to Consider When Working With a Real Estate Agent

As real estate agents vary in expertise, you must do your homework and keep a few tips at the forefront when selecting one. This way, you can ensure that your experience is stress-free and successful – avoiding any potential issues or frustrations down the line.

Gather Referrals. Word-of-mouth is the best way to find a reliable realtor. Ask friends and family before combing through newspaper advertisements for an agent. The most successful agents acquire their clients through referrals. 

You can trust that they will provide quality service when recommended by someone who has already had a positive experience with them.

Know when to bail. Feel free to switch realtors if the one you’re currently working with falls short of your expectations. They may not have fulfilled their end of the agreement or changed fees without clarity and transparency. 

Considering this individual plays a huge role in your financial future, ensure that you feel completely at ease when working together; otherwise, it’s time for a change.

Communication is key. When selecting a real estate agent, make sure to communicate your preferred method of communication. Whether emailing or texting, they must be aware, so you can connect swiftly and productively when buyers become available. Furthermore, if you want to meet face-to-face, ensure to share this information with them upfront for the two of you to have an efficient relationship throughout the process.

Be prepared. Before you meet with your realtor, ensure that you are well-prepared. This variety of information will give your agent a solid starting point on which potential buyers are right for you. 

Don’t be afraid to ask questions. It is essential to locate a real estate agent you can trust and feel comfortable asking many questions. The inquiries may be even more abundant if this is your first time selling a home.

When selling a house, it is critical to be well-informed of each step throughout the process – from hiring an agent and signing the contract to closing your sale. A thorough understanding of these procedures helps set yourself up for success in maximizing profits and ultimately achieving your desired outcome. 


The bottom line: hiring a real estate agent can be challenging and expensive during the home-selling process. Knowing who pays the real estate agent commission and preparing for this transaction are paramount to ensuring your experience goes smoothly.

As a seller, you pay the commission for the seller’s agent and buying agent.

It is also important to research when selecting an agent- such as gathering referrals, knowing when to bail if necessary, and communicating your preferences. Additionally, it is essential to be prepared before meeting with them, be bold, and ask questions if needed.

Are you looking to avoid the hassle and expense of working with a real estate agent?

At We Buy Houses for Cash, we make it easy for you to sell your home quickly without going through the hassle of a traditional real estate transaction. Contact us today, and let us take care of all the details!

Additional Resources

Get an all cash offer on your home