How Much Is Real Estate Commission?

There are three different types of commission in real estate. They are Negotiable, Split between buyer and seller agents, and Payment at closing. Each one has its advantages and disadvantages. In this article, we’ll discuss the different types of commission and how they’re paid. You’ll also discover how to determine the amount you owe your real estate agent. We hope you find this article helpful! Happy selling! It’s time to negotiate your commission!


Using a tool like Mashvisor’s real estate heatmap can help you determine the best rate to negotiate. You can list the factors that work in your favor, such as the rate of rental income, Airbnb occupancy rate, and cash on cash return. Use this information to ask for a lower commission rate. In a hot real estate market, a seller can leverage the information they receive to reduce their commission. For example, if you’re selling a property in an area with high inventories, you can make a claim that your home has sold in an hour.


5% – 6% of home’s sale price

The cost of hiring a real estate agent is a hot-button issue in selling a home. While some homeowners feel the rates charged by real estate agents are excessive, the truth is that the average agent barely earns minimum wage. While real estate agents are paid a percentage of the sale price, it’s often divided 50/50 between them and the buyer’s agent. Ultimately, the cost of hiring a realtor ultimately falls on the buyer.

Split between buyer’s agent and seller’s agent

A typical home sale will include a certain percentage of commission paid to a seller’s and buyer’s agent. This amount can vary, but typically it is split 50/50. If the agents are working in conjunction, then a reasonable split would be 2.5% for the buyer’s agent and 2.5 percent for the seller’s agent. However, the commissions paid to an agent vary widely and may be less than fair for some sellers.

Payment at closing

Some sellers may feel that they can afford to pay more at closing than they have to, which is why they choose to work with a real estate agent. While this approach may reduce the total commission paid, the seller is responsible for marketing the property, negotiating with buyer’s agents, and navigating the closing process alone. In these cases, a lower commission may be beneficial for both parties. Here are some tips for finding a lower real estate commission rate.


Common commission splits

Many brokers use a combination of two types of real estate commission splits, which are known as fixed and graduated. Fixed splits are the most common and provide the most predictable income for the real estate agent. Fixed splits are also known as 60/40. A 60/40 split means that an agent receives 60 percent of gross commission income. Graduated splits are similar to fixed splits, but they also allow the agent to earn more when reaching milestones. For example, an agent might switch to an 80/20 split once he or she earns $60,000, and then to a 90/10 split after earning $100,000.

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