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5 min read Sep 18, 2023

What Percentage Do Realtors Make From a Home Sale?

Realtors charge a 3% to 6% agent commission for every real estate transaction they’re a part of. This commission is split between the buyer agent and the seller agent. The split is 50/50, more experienced agents can charge a fee as high as 6%.

Agent commissions can cost you thousands of dollars. To save on this expense, you can opt for flat-fee MLS companies like Houzeo. Your home can be on the MLS within 24 hours at just $399.

Key Takeaways

  • Average Real Estate Agent Commission: The average total real estate commission is 5.72%. This includes a 2.96% listing agent commission and a 2.76% buyer’s agent commission.
  • Agent Commission is Negotiable: Agent commissions aren’t regulated by law, which makes them negotiable. You can negotitate commission rate and ask each agent what exactly you’ll be getting for that price.
  • How to Save on Agent Commissions: You can save on commission by using the same agent for buying and selling a home. You also have the option to choose from discount Realtors or list your property on MLS.

How Does the Real Estate Commission Work?

Real estate commission splits can vary depending on the agent and brokerage agreement. Typically, the commission is split between the agent and the brokerage, with the agent receiving a percentage and the brokerage receiving the rest.

The percentage split for the agent can also vary depending on factors such as experience and performance. It’s important for agents to fully understand their commission split agreement before entering into a contract with a brokerage.

Real estate agents make their living through commissions, a percentage of the sale price agreed upon in the listing agreement.

How Much Do Discount Realtors Make?

The earnings of discount realtors can vary depending on several factors. Some discount realtors work on a commission-based system, while others charge flat fees.

Additionally, the amount of business a discount realtor generates can significantly impact their earnings. However, discount realtors typically make less than traditional realtors, who charge higher commission rates.

Discount realtors can make a good living by offering their services at lower speeds and attracting a high volume of clients.

How Much Commission Do Realtors Make per Year?

According to NAR the average salary for a Realtor is over $90,000 every year. While this is typically for full-time agents, it can vary based on the Realtor’s experience.

Many agents earn a lower salary in their first year but double it later. Realtors must close 9-10 transactions annually. To be among the top 10% of agents earning $102,170 or more, you must sell around 20 homes annually.

However, the standard commission rate is usually around 3% to 6% of the sale price.

Can You Negotiate Agent Commission?

Yes, it is possible to negotiate agent commission. However, this negotiation will depend on a variety of factors such as the local market, the type of property being sold, and the agent’s level of experience.

Remember, the commission rate is not the only factor to consider when choosing an agent. In certain situations, if sellers use the same agent to buy and sell a new home they can negotiate a lower agent commission. There are some instances where buyers can opt to pay.

If a buyer’s agent contacts you, you can save up to 3% on the total commission. If you use a Flat Fee company like Houzeo, you can avoid paying a listing agent.

Different Ways Realtors Get Paid

There are several pay models that real estate agents can choose from apart from the traditional commission-based model. One such model is the hourly rate model where agents charge clients on an hourly basis for their services.

  • Commission Based: Agents often receive payment through a commission, this percentage of the property’s selling price split between the buyer’s and seller’s agents. The commission percentage can vary depending on the deal specifics and location.
  • Flat Fee Commission: Realtors may charge a flat fee or hourly rates for their services. Flat fees are best for lower-priced properties, while hourly rates work well for complex transactions.
  • Bonus or Incentives: Some realtors may receive bonuses or incentives for completing transactions or reaching sales goals. Incentivizes them to work harder and provide better service.

Final Thoughts

After considering all the factors involved, the percentage that realtors make is fair and reasonable. Partnering with a real estate agent who charges a commission of 3% to 6%.

To save thouands on dollars opt for Flat Fee MLS company like Houzeo. Houzeo can get you on the MLS in 24 hours without a real estate agent. At just $399, you can access advanced tools available to only real estate agents.

Eager to Know More?

We’ve got you covered. Check out the following video to understand why Houzeo is one of the best for sale by owner websites in the U.S.

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» NEED MORE CLARITY? Read these exclusive Houzeo reviews and learn why it is one of the best FSBO sites in America.

Frequently Asked Questions

1. How do realtors make money?

Realtors earns a commission based on property price. The commission is split between the broker and agent involved. The buyer and seller agents both get a percentage once the sale is done.

2. How many houses do most Realtors sell a year?

NAR estimates that an agent completes around 12 home sale transactions every year.

3. How much commission do Realtors make?

The commission percentage can vary based on the property and the market. Typically, commissions are between 5% and 6% of the property's total sale price.


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