Real estate agents are paid a commission when they help clients sell or purchase a

home. Generally, this is a percentage of the sale price of the property. For example,

a typical home sales price in the US is around $300,000. A 6% commission on that

amount would yield $12,000. However, many things go into the calculation of real

estate agent compensation including overhead costs, marketing fees and referral

and cooperating agent compensation.


Depending on the situation, you may be able to negotiate the commission rate. Your

real estate agent will typically include their fee structure in the listing agreement,

which is a contract that you sign when you agree to work with a real estate agent. In

addition, real estate agents typically cover various marketing expenses upfront.

Those can include professional photography, 3D tours and virtual open house

videos. These can be a big expense for home sellers, so it’s worth trying to reduce

the commission rate if you can.Must visit


Some real estate agents are a bit more receptive to offering a lower commission

rate if you are willing to work with them on repeat business, such as helping you buy

and sell your next home. They also might be willing to negotiate if they know you

are in a hot market and that the home is likely to quickly sell.

Another way to negotiate your agent’s commission is by offering a rebate of some

portion of the fee. However, this isn’t an option for all buyers, and it’s illegal in some

states. Moreover, even in the few states where rebates are permitted, only about 7%

of home buyers request and receive them.


In addition to the commission, some real estate agents earn other revenue through

their brokerages. For instance, real estate agents who work with a discount

residential brokerage like Redfin might be paid a salary in addition to the

commission they earn from their deals.


Do Buyers Pay Realtor Fees?

Usually, buyers don’t pay the real estate commission. The seller pays the

commission, but the cost is often included in the home sale price as a markup.

This is because a home buyer doesn’t usually have the money to pay the

commission directly to the real estate agent, and it makes sense to bundle it into the

selling price of the home.


In addition, buyers are saving for a down payment and closing costs, which can be a

significant sum of money. The good news is that, in most cases, a buyer’s real estate

agent will help them find a home for less than the seller’s asking price. That’s why it

is so important to have a buyer’s agent who will represent your interests in

negotiations. In some situations, a buyer’s broker may also get a referral fee for

bringing in the buyer. Typically, these referrers are in other markets and will split

the commission with the buyer’s agent. That way, the buyers and the sellers are

both getting a fair deal.