You are about to sell, and the first number everyone asks about is the commission. How much of your sale price goes to the agents? It is a fair question, and the answer matters because it comes straight out of your proceeds. Let's put real numbers on it so you know exactly what you are paying and what you are getting for it.
Quick Answer
Real estate agent commission is typically 5-6% of the sale price, split between the buyer's and seller's agents. It is negotiable, and the exact rate depends on your market and how you negotiate. The deciding factors are the level of service, your market, and what is customary in your area. Make sure you understand what the commission covers before you sign the listing agreement. Ask Patrick about agent commissions.
Standard Commission Structure
The term: commission is the fee you pay the agents at closing, expressed as a percentage of the sale price.
The meaning: in a traditional transaction, the seller pays the total commission, typically 5-6%, which is divided between the listing agent and the buyer's agent, and each agent then splits their portion with their brokerage.
The money: on a $350,000 sale at 6%, the total commission is $21,000, split roughly $10,500 to each agent before their brokerage split. Your proceeds are reduced by that amount at closing.
The real-world consequence: the commission comes out of your proceeds, so the sale price and the commission rate together determine what lands in your pocket.
What Is Negotiable?
The term: everything about the commission is negotiable, because rates are not set by law or by any real estate board.
The meaning: you can negotiate the total percentage, what you offer the buyer's agent, and what services are included. Some agents charge a flat fee instead of a percentage.
The money: discount brokers may offer lower rates with fewer services, so compare commission structures and service packages before you sign a listing agreement.
The real-world consequence: following the NAR settlement, buyer agent compensation is no longer advertised on the MLS, so it must be negotiated directly rather than set through MLS rules.
FSBO: No Commission but More Work
The term: For Sale By Owner (FSBO) means you sell without a listing agent and pay no listing commission.
The meaning: you may save the listing side of the commission, but you still typically offer compensation to the buyer's agent to attract represented buyers.
The money: you also handle all marketing, showings, negotiations, paperwork, and legal compliance yourself, and many FSBO sellers eventually list with an agent once they see the complexity.
The real-world consequence: as a dual-licensed loan officer and realtor, I have seen both sides of many transactions. The value of representation goes beyond the rate, because a good agent can net you more through better pricing, negotiation, and marketing than the commission costs. Make it a great one, Patriot Nation.
Ask Patrick about agent commissions
Get a straight answer on commissions, what they cover, and the listing agreement.
