How Commission Fees Work for Buyers and Sellers
Real estate agents are paid a commission when they help you buy or sell a home. They receive a commission based on the home’s price after the sale has been completed.
of the home’s price
The seller pays your agent’s commission. You still have to pay closing costs .
Selling a Home
of the home’s price on average
You pay 2.5%–3% in commission to your agent and 2.5%–3% to the buyer’s agent on average.
How Real Estate Commission Works
How much is real estate commission?
Typically, real estate commission is 5%–6% of the home’s sale price. In most areas the buyer’s agent receives 2.5%–3% in commission and the seller’s agent receives 2.5%-3% in commission.
Who pays the commission?
If you are buying a home, you don’t have to pay real estate agent commission; however, you still have to pay closing costs . On the other hand, if you are selling a home you pay commission to both your agent and the buyer’s agent when your house closes.
Can you negotiate commission fees?
Some agents will lower their commission fees, particularly if they are representing both the buyer and the seller in a home sale (also known as dual agency ).
Redfin offers no-hassle pricing. We show you how much you will pay — and how much you will save — in every home sale. Talk to a Redfin Agent to learn the exact amount you can save.
How does commission work for buyers?
The home seller pays the commission for both the seller’s agent and the buyer’s agent. But that doesn’t mean that there is no cost to the buyer. Sellers sometimes account for the fee they’ll be paying and pass costs along by raising their listing price.
If you buy with a Redfin Agent, you can save thousands in closing costs when we give you a portion of the commission the seller pays us. Learn more about the Redfin Refund .
*Redfin Refund is not available where prohibited by law, including in Alabama, Alaska, Iowa, Kansas, Louisiana, Mississippi, Missouri, Oklahoma, Oregon, and Tennessee. Subject to lender approval and minimum commissions. See full terms and conditions.
Do you have to pay commission if you don’t buy a home?
Real estate agents are paid at the end of the process, so if you don’t buy a home, they won’t be paid for their time. On the other hand, if you decide you don’t like your agent and want to work with someone new, it may be difficult to break up with them if you’ve signed a contract (also known as a buyer’s agency agreement ). Make sure to ask the right questions before signing a contract!
Do you have to pay commission if your home doesn’t sell?
Short answer: Probably not. Real estate agents are paid when you sell your home, so if your home doesn’t sell, you shouldn’t owe them a commission.
Long answer: Read the fine print. Generally, your contract with your agent is bound to a certain time period. Unless your contract says otherwise, you are typically not required to pay your agent if the contract expires and your home doesn’t sell. However, there may be some exceptions; some examples include:
- Your agent found the buyer: Some contracts state that you still owe your agent commission after the contract period ends if your buyer was a prospect during the term of the agent’s contract.
- You back out of the sale: After an offer is accepted, you are responsible for paying commission to both real estate agents immediately. If you decide to back out of the sale last minute, you still have to pay both real estate agents their commission. If the buyer backs out, you may still be responsible for paying the commission — but can potentially sue the buyer for breach of contract.
Read all contracts carefully. To find a real estate agent who’s paid on your satisfaction, not just commission, find a Redfin Agent in your area.
*Real estate commission varies by transaction. The Redfin commission calculations are based on a 2.5% commission for the buyer’s agent and the seller’s agent.