A Guide To REALTOR® Fees: What Are They, Who Pays Them And How Much Do They Cost?

Sidney Richardson

5 - Minute Read

UPDATED: Mar 28, 2024

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When buying or selling a home, you’ll encounter various costs associated with closing, including REALTOR® fees. If you hire a real estate agent or REALTOR® to help you buy or sell a house, that agent will be paid a commission in exchange for their services. Who pays this commission and how much it is are important to know as you make this important financial decision.

Let’s explore a few key details you’ll need to know about REALTOR® fees, including more on what they are, who pays them and how much they cost.

What Are REALTOR® Fees?

A REALTOR® fee, also known as real estate commission, is the price you pay to work with a real estate agent or REALTOR® to buy or sell a house. These fees cover the cost of many services your real estate agent or REALTOR® may provide, from marketing your home to walking you through the various processes involved with selling or buying a house.

In some markets, real estate agents and REALTORS® – real estate professionals who are members of the National Association of REALTORS® (NAR) – work for a flat fee. They typically work on commission, though, so in most cases you won’t have to pay your agent unless they successfully sell your home or help you purchase a new one.

Who Pays REALTOR® Fees: The Home Buyer Or Seller?

The home seller usually pays the REALTOR® fees. They’re calculated by subtracting the agent’s commission costs from the total sale price of the real estate transaction. The fee goes to the seller’s agent (also known as the listing agent) who splits the commission with the buyer’s agent.

Home buyers don’t directly pay REALTOR® fees, but the buyer’s money – usually in the form of a mortgage loan – is what the seller uses to cover both agents’ commission costs. In that way, both the buyer and the seller contribute to this expense.

When buying a for sale by owner (FSBO) home, the buyer’s agent will often negotiate directly with the homeowner for the payment of REALTOR® fees. If the seller agrees, they’ll pay the commission of the buyer’s agent.

How Much Are REALTOR® Fees?

Real estate agent commissions are usually calculated as a percentage of your home’s final sale price. This percentage varies, but typically real estate agents are paid 5% – 6% of the final sales price of the home.

That total commission percentage is split between the buyer’s and seller’s agents. On a 6% REALTOR® fee, each agent would receive 3% of the sale price. If a real estate broker assists in the sale, agents will often further split the commission with the brokerage.

Average Cost Of REALTOR® Fees

Though the REALTOR® commission rate can vary from one transaction to another, estimating 6% of your home’s sale price can give you a good idea of how much you might pay in real estate commissions.

For example, if a house sells for $200,000, you can expect to pay around $12,000 for the REALTOR® fee. If you’re the homeowner, you should take this into consideration when determining the listing price of your home.

Here are some examples of the average commission you might pay for different home prices.

Home Sale Price

Seller's Agent Commission (3%)

Buyer's Agent Commission (3%)

Total Dollar Amount

$100,000

$3,000

$3,000

$6,000

$250,000

$7,500

$7,500

$15,000

$500,000

$15,000

$15,000

$30,000


What Do REALTOR® Fees Cover?

Buyers and sellers pay real estate agent fees in exchange for that agent’s experience, expertise and professional connections in the real estate industry. This can be particularly valuable for first-time home buyers and sellers who aren’t as experienced in the processes.

Some of the home selling services covered by an agent’s commission include:

  • Determining an appropriate asking price for your home
  • Marketing your home to potential buyers through different channels
  • Negotiating transactional details with buyers or their agents
  • Guiding you through the closing process when your home sells
  • Preparing virtual or in-person staging
  • Arranging, advertising and hosting open houses or showings

Can You Negotiate REALTOR® Fees?

You can sometimes negotiate the cost of real estate commission fees, though this may affect how much your agent is able to do to help sell your house. Negotiating for a lower commission could mean less money going toward marketing your home to buyers and other tasks your real estate agent may take on for you.

If you want to negotiate REALTOR® fees, it’s best to ask an agent upfront if they’ll be willing to reduce their commission.

What Is Dual Agency?

Dual agency is when one agent represents both the buyer and seller. Since a dual agent is working both sides of a real estate transaction, they’ll receive the full commission percentage after the sale closes.

Dual agency is rare as it’s often seen as a conflict of interest. Some states don’t allow dual-agent representation because of this.

Are REALTOR® Fees Included In Closing Costs?

While the real estate commission gets paid when a home closes, it isn’t technically included in your closing costs. Closing costs are made up of other expenses that are usually related to your loan, not your REALTOR® or real estate agent’s work, and typically include expenses like legal and loan processing fees.

Closing costs will vary, but on average may cost 3% – 6% of your home’s sale price.

What To Look For When It Comes To A REALTOR® And Their Fees

When looking for the right real estate agent or REALTOR® to work with, it’s a good idea to shop around a bit. Buying or selling a home is one of the biggest financial commitments you can make, so it’s important to work with someone you trust.

  • When looking for a real estate agent, keep the following in mind:
  • Be transparent and let them know what you’re looking for. There are plenty of agents out there, so chances are you’ll be able to find one who can meet your buying or selling needs.
  • Ask any questions you have. It’s always better to be informed than confused.
  • Try to negotiate the fee upfront. The real estate commission fee will depend largely on the price of your home, but it never hurts to ask.

FAQs About REALTOR® Fees

Here are some other common questions about REALTOR® fees.

Do buyers pay REALTOR® fees?

Home sellers typically pay REALTOR® fees with proceeds from the sale of the home, which is paid for by the buyers. Buyers pay indirectly when they take out a mortgage for the home.

What percentage do most REALTORS® charge?

The average total real estate commission is 5% – 6% of a home’s final sale price. Commission rates can vary between states, cities and even brokerages. As you search for the right real estate agent, it’s common to see different rate quotes.

Where can I find out how much I’ll pay in fees and commission?

When you hire a real estate agent or REALTOR®, the agent fees and commission should be detailed in your listing agreement, which serves as the employment contract between the agent and the property owner.

The Bottom Line

Working with a real estate agent or REALTOR® to sell your home can take a huge load off of your responsibilities. It’s important, though, to take into account how much you might pay in real estate commission fees and closing costs so you won’t encounter any surprises when it’s time to close. Keep in mind you may be able to negotiate REALTOR® fees upfront, but make sure it won’t affect the help your agent can provide you.

If you’re ready to take the next step in home buying or selling, visit Rocket Homes℠ and match with an agent today.

Headshot of Patrick Chism, section editor for Rocket Central

Sidney Richardson

Sidney Richardson is a professional writer for Rocket Companies in Detroit, Michigan who specializes in real estate, homeownership and personal finance content. She holds a bachelor's degree in journalism with a minor in advertising from Oakland University.