The NAR Settlement significantly brought down the average realtor commission. Sellers once paid 6% to their real estate agents, spending up to $25,660 on a $427,670 home. Negotiable buyer agent fees have brought down real estate agent commissions by 50%.
These days, many sellers prioritize savings and explore Flat Fee MLS companies instead. These companies provide MLS exposure for a low, fixed fee. As a result, sellers have more control over the closing costs and can save their hard-earned money.
What Is Real Estate Commission?
Real estate commission is a percentage of the home sale price that you pay to your agent. An average real estate commission is around 5% to 6%. It includes the listing agent and buyer agent commissions.
These real estate agent fees vary depending on location, property type, and market conditions. Here are a few instances:
- In states like California or Texas, the median home sale prices have grown by 6.1% and 2.8% respectively. There, a typical real estate commission for realtors may go up to 4% due to the high competition among the buyers.
- In states like Vermont and Louisiana where the housing market is less competitive, commission rates are often affordable. They may typically range from 2.5 to 3%.
Average Realtor Commission by State:
Know the Realtor commission split in your state:
Who Pays the Realtor Fees?
Typically, home sellers pay the real estate commission. The commission is split between the listing agent and the buyer’s agent. The commission is deducted from the seller’s proceeds at closing.
However, the new Realtor law allows for more flexibility in how a buyer’s agent is compensated. Buyers may now directly pay their agent, either through a separate agreement or as part of their overall transaction. Also, sellers may offer seller concessions to stay competitive in the Land of Opportunity.
New Laws and the NAR Settlement: What’s Changed?
The NAR Settlement went into effect on August 17, 2024. Buyer agent commissions can no longer be offered on the MLS. This implies that sellers will save thousands. It also means there are a lot more compliance and litigation risks.
Here’s what this means for you:
- Sellers Can Save Thousands in Commissions: You pay lesser than the traditional 3% buyer agent commission. That’s because buyer agent commission is negotiated twice: when buyers hire buyer agents, and when sellers review offer contracts.
- Seller Priority #1 Will Be Paperwork (To Mitigate Compliance & Litigation Risks): The buyer’s agent mitigates risks related to seller disclosures, offer contracts, contingencies, closing, etc. They ensure that your paperwork is legally compliant and adheres to MLS rules.
- Negotiations Can Now Feel Like Haggling: Buyer agent commissions are now included in offer contracts and buyer agency agreements. Buyers may request sellers to cover the commission rates as concessions. So, both buyers and sellers will have to negotiate commissions alike.
- Buyer Agent Commissions Can Be Offered Offline: Buyer agent fees can still be offered outside of the MLS. They just cannot be advertised on the MLS.
Cost Comparison: With and Without a Listing Agent
You could save up to $12,081 when selling a median-priced $427,670 home with a Flat Fee MLS service.
Suppose, you are selling a house priced at $427,670. Assuming you pay the 3% realtor commissions, you’ll pay $12,830. With Houzeo, you could significantly reduce this commission to real estate agent by paying only $399 with $350 at closing.
| Service Provider | Fee | Commission Due | Savings |
| Traditional Agent | 3% | $12,830 | $0 |
| Houzeo | $399 | $749 | $12,081 |
Alternatives to Real Estate Commission
If real estate commission rates trouble you, here are a few alternatives to an agent-assisted sale:
- List With a Discount Real Estate Broker: Many discount real estate brokers provide all the services traditional Realtors offer at discounted rates. They usually charge 1% to 1.5% commissions to list your home.
- Sell “For Sale By Owner”: With For Sale By Owner websites, you can sell your home online, review contracts, and schedule showings, all at your fingertips! You also get paperwork and negotiation assistance.
- List for a Flat Fee: Flat Fee MLS listing service companies can list your property on your local MLS within 24 to 48 hours. Also, you can get top dollar for your house.
- Sell to an iBuyer or Cash Buyer: A cash buyer can make an instant cash offer and help you sell your house fast. iBuyers have strict purchase criteria but can make cash offers as high as 80% of the Fair Market Value.
How to List on the MLS with Houzeo and Save $$$?
Here are 5 easy steps to save thousands of dollars and have your listing active within 24 to 48 hours:
- Create an Account: Visit Houzeo.com, download the Houzeo mobile app, and click “Start Listing Now.” Provide basic details such as your name and contact information to set up your account.
- Enter Property Information: Log in to your Houzeo dashboard and click “Sell a Property.” Provide details about your home, such as the number of bedrooms, bathrooms, or any standout features.
- Set Your Asking Price: Use Houzeo’s home worth calculator to determine your home’s market value. Then set a competitive price for maximum benefit.
- Choose a Flat Fee MLS Plan: Houzeo offers four flat fee MLS plans. Select the plan that suits your needs.
- Upload Photos and Sign the Listing Agreement: Add aesthetic and non-personal photos to showcase your home’s best features. Upload pictures of your kitchen, bedroom, and bathrooms to attract potential buyers.
» Houzeo Reviews: Find out why Houzeo is one of America’s best Flat Fee MLS listing services.
What’s the Best Way to Save the Realtor Commission?
The best way to save on commissions is to learn how to negotiate real estate commissions with your agent. You can also opt for Flat Fee MLS Listing services like Houzeo and eliminate the 3% listing agent fee.
With Houzeo, your home can be on the MLS within 24 to 48 hours. You will also get 24/7 customer support. Your listing will also receive maximum exposure via top real estate websites like Zillow, Trulia, Redfin, and more.
Frequently Asked Questions
Who pays Realtor commission?
Usually, sellers pay the Realtor commission. However, after the NAR settlement, sellers are no longer obliged to pay the buyer's agent commission.
What are the new real estate commission rules and regulations?
The new real estate commission law made buyer agent commissions negotiable. After the NAR Settlement, sellers can now save more. Earlier, they were responsible for covering both listing and the buyer's agent fees. Now, buyers handle their agent’s fee directly.
How much does a Realtor make?
Realtors typically earn a real estate commission of around 5% to 6% of a home's sale price. The commission is split between the listing agent and buyer's agent. However, their actual earnings can vary depending on the market conditions, property type, and location.
