How Much Is Real Estate Commission Paid?


Real estate agents are paid a commission by buyers and sellers for their services. This fee is a percentage of the purchase price or rent that the agent facilitates in a real estate transaction. The exact amount depends on the contract that the buyer or seller has with their real estate agent.

What Is a Real Estate Commission?

In the United States, real estate commissions range from around 6% for selling a property to 12% of a rental rate. This figure can vary depending on the local market conditions and other factors that influence the real estate industry.

What Are the Different Types of Real Estate Commissions?

Traditionally, real estate agents were paid by the hour, but many now work for a commission. Brokers and agents often work under the same roof as a brokerage, so their share of the commission is split between the brokerage and the agent after it is paid to the broker. Read more


The Commissions Are Split Between the Seller and Buyer

In most cases, real estate commissions are split between the seller and buyer of a home or apartment. The seller pays the commission to the listing agent who then passes it on to their buyer’s agent. The buyer’s agent receives 3% of the total commission, and in some cases, their broker also receives a portion of it.

How is the Commission Paid in New York?

In New York, a real estate agent who sells a home will usually receive a 6% commission. This is a percentage of the sales price and is paid to the agent after it is paid to the listing broker and their brokerage firm.

The real estate commission is split between the broker and the agent and can vary by broker, company, and individual circumstances. A common commission split is 60/40, where the agent receives 60% of the commission and the broker receives 40%.

Why Does the Commission Get Split?

The split of the commission is a matter of negotiation between the agent and the broker. The agent may prefer to keep more of the commission for themselves or may want to pass it on to their brokerage firm. This can help the agent attract more business.


How Do Real Estate Agents Make Money?

Unlike other professions, real estate is a commission-based field. Agents earn money based on the amount of time and effort they put into a real estate transaction.

Some brokers and agents charge more for their services than others, and this can have a significant impact on the total compensation earned. Those who are more experienced or better at closing sales might be able to command higher commissions.

What Are the Different Types and How Do They Work?

The real estate commission can vary by agent, company, and location. However, the overall rate in most parts of the country has been declining for the past decade, with average rates falling to 5.06 percent in 2021, according to research firm RealTrends.

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