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Who Pays Realtor Fees?

Written by Allison Martin

Allison Martin is a personal finance enthusiast and a passionate entrepreneur. With over a decade of experience, Allison has made a name for herself as a syndicated financial writer. Her articles are published in leading publications, like Banks.com, Bankrate, The Wall Street Journal, MSN Money, and Investopedia. When she’s not busy creating content, Allison travels nationwide, sharing her knowledge and expertise in financial literacy and entrepreneurship through interactive workshops and programs. She also works as a Certified Financial Education Instructor (CFEI) dedicated to helping people from all walks of life achieve financial freedom and success.

Updated September 11, 2023​

2 min. read​

Are you planning to buy or sell your home soon? Hiring a reputable real estate agent can help you execute the transaction with ease, saving you time and money. Of course, the services they offer come at a cost that’s well worth it, but it’s vital to understand how realtor fees work to avoid any surprises. 

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What are Realtor Fees?

Realtor fees are the compensation real estate agents receive once the purchase or sale of a home is completed. 

Some real estate agents also hold the REALTOR® designation from the National Association of REALTORS®. It’s important to note that the fee structure for both real estate agents and REALTORS® are the same, so the term “real estate professional” will be used throughout the article to avoid confusion. 

What Do Realtor Fees Cover?

Realtor fees cover a variety of services related to preparing your home for listing, garnering the right attention and attracting top offers. Their services also include: 

  • Market research to determine a fair but competitive asking price
  • Home staging to make the home stand out amongst the competition
  • Preparation of marketing materials 
  • Coordination of open houses for prospective buyers 
  • Support sellers during the entire process, from listing, offer negotiations and inspections to the closing table

On the other side of the transaction, buyers’ agents are paid for performing the following services: 

  • Consult with buyers on affordability and mortgage options 
  • Assist buyers with the home search 
  • Visit open houses and coordinate private showings with sellers’ agents 
  • Conduct market research to identify comparable home sales and draft up competitive offers
  • Work with buyers to negotiate sales contracts that include the necessary contingencies
  • Support buyers through the home inspection, appraisal and closing process

How Do You Calculate Realtor Fees?

Most real estate professionals work on a commission basis. However, some are compensated using a flat-free structure. 

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How Much are Average Realtor Fees?

On average, realtor fees are between 5 percent and 6 percent of the property’s purchase price. This amount is generally split between the seller’s and buyer’s agents. 

To illustrate, if you sell your home for $425,000 and the real estate commission is 5 percent, you’ll pay $21,250 in fees. Your agent will receive $10,625, and the agent representing the buyer will receive the other $10,626. 

Who Pays for Realtor Fees in a Home Sale?

The seller typically covers realtor fees in a home sale. However, if you opt to sell your home on your own through what’s known as a “For Sale By Owner” transaction, you can avoid having to pay a portion of the fees as there’s no seller’s agent. 

How and When Do You Pay Realtor Fees?

Realtor fees are paid at closing. Once the funds are dispersed, most agents dole out a portion of the fee to their brokerage and any other professionals who assisted them with the transaction. 

Can You Negotiate Realtor Fees?

Yes, realtor fees are negotiable. However, there are no federal or state regulations mandating that they be set at a certain percentage, so you can ask the agent to charge you a lower fee when selling your home.

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