# Who pays real estate agent commission fees
By Opendoor Editorial Team | 2022-06-24
> Many home buyers and sellers don’t understand who pays the agent involved in the transaction. We explain.
## Key Takeaways
#### Key Takeaways
- Real estate commission usually totals 5%-6% of the sale price in 2026, but rates are negotiable and vary by market and agent ([Realtor.com, 2024-2025 industry data](https://www.realtor.com/advice/sell/real-estate-commission-explained/)).
- Sellers traditionally pay the full commission out of closing proceeds, split between the listing brokerage and the buyer's brokerage; the listing-side share averages near 2.98% and the buyer-side near 2.73% nationally \[VERIFY: 2.98% listing / 2.73% buyer-side averages, 2026\].
- After the NAR settlement took effect in August 2024, buyer-agent compensation is no longer advertised through the MLS and must be agreed to in writing between buyer and agent before touring ([Opendoor Help Center](https://help.opendoor.com/agents-partners/working-with-opendoor/nar-settlement)).
- Sellers can lower commission through negotiation, discount brokerages, FSBO, or by selling to a cash buyer; Opendoor charges a service charge in lieu of agent commission (Opendoor Help Center).
- On most Opendoor listings, buyer-agent compensation is still offered (amount varies by market) and is paid at closing through the title company (Opendoor Help Center).
## **Real Estate Commission Explained: Who Actually Pays**
When you sell a home, the real estate commission — typically 5% to 6% of the sale price — gets deducted from your proceeds at closing. For decades, sellers paid both their agent and the buyer's agent, but new rules that took effect in August 2024 changed who's responsible for what.
This article walks you through who pays commission now, how the recent settlement shifted buyer and seller responsibilities, and what options exist to reduce or eliminate these costs entirely.
Related: [does Opendoor charge a commission](https://www.opendoor.com/articles/how-selling-to-opendoor-compares-to-a-traditional-home-sale).
## **Who pays realtor commission today**
For years, home sellers paid the real estate commission for both their own agent and the buyer's agent — usually 5% to 6% of the sale price. That changed in August 2024 when new rules from the National Association of Realtors took effect. Now, buyers can negotiate directly with their agents and may pay their own representation, though sellers can still choose to cover that cost.
Commission gets paid at closing, deducted from the seller's proceeds before money changes hands. On a $400,000 home with a 6% commission, that's $24,000 coming out of the sale price.
### **Buyer pays, seller pays, or shared**
Three ways exist now for handling commission. First, the traditional model: the seller pays both agents' fees, and the listing agent splits the total with the buyer's agent. Second, the new option: buyers pay their own agent directly, adding that cost to their closing expenses. Third, a negotiated arrangement: sellers offer a concession that buyers use to cover their agent's fee, or both parties split costs in another way.
The big shift? Buyer agent compensation no longer appears on Multiple Listing Service (MLS) listings, so conversations about payment happen outside that system.
### **When the commission is collected**
Commission payments happen at closing, not before. For sellers, the fee gets deducted from sale proceeds — the amount you receive after paying off your mortgage and other closing costs. For buyers paying their agent directly, that fee becomes part of their cash-to-close calculation, the total amount they bring to the closing table beyond their down payment.
This timing matters because no one writes a check to agents during the selling process. The title company distributes funds at closing, paying everyone from the transaction proceeds.
[Get your offer](#)
## **How the traditional commission model worked**
For decades, sellers signed listing agreements with their agents that spelled out a total commission percentage — typically 5% to 6% of the home's sale price. The listing agent would then advertise on the MLS how much of that commission they'd share with the buyer's agent, usually splitting it 50-50.
A seller paying 6% would see 3% go to their agent and 3% to the buyer's agent. On that $400,000 home, that's $12,000 to each side before agents split with their brokerages.
### **Listing agreement sets total fee**
When you hired a listing agent, you signed a contract that laid out the commission rate and how long the agent would represent you, usually 90 to 120 days. That rate was negotiable, though many sellers didn't realize they could discuss it. The agreement also covered what the agent would provide: professional photography, staging advice, marketing plans, and negotiation support.
The total fee covered both sides of the transaction, even though you only worked directly with your listing agent.
### **Listing agent split with buyer agent**
Your listing agent controlled how the commission got divided. They'd typically offer the buyer's agent 2.5% to 3% of the sale price, advertising that split on the MLS to attract buyer agents and their clients.
Critics argued this system pushed buyer agents to steer clients toward homes offering higher commissions rather than the best fit for the buyer. That concern was one reason the rules changed.
## **What changed after the NAR settlement**
A series of lawsuits challenged the traditional commission structure, arguing it inflated costs and reduced competition, resulting in a[ $418 million NAR settlement](https://www.apslaw.com/its-your-business/2024/12/02/the-future-of-realtor-commissions-understanding-the-nar-settlement/). The National Association of Realtors reached a settlement that changed how agent compensation works in two major ways: buyers must now sign written agreements with their agents before touring homes, and sellers can no longer advertise buyer agent compensation on the MLS.
### **Written buyer broker agreements**
Before showing you any properties, buyer agents now present a written agreement that outlines their services and fees. The contract specifies who pays the agent and how much, giving you clarity upfront.
The agreement typically includes: The scope of services the agent will provide The commission amount or how it's calculated The length of the working relationship What happens if you buy a home
This transparency helps buyers know exactly what they're committing to before starting their home search.
### **Optional buyer agent compensation**
Sellers can still offer to pay the buyer's agent, but it's no longer assumed or advertised on the MLS. Conversations about payment happen directly between agents or get negotiated as part of the offer. You might offer a concession in the purchase agreement that the buyer can use toward their agent's fee, or you might agree to cover it entirely to make your home more attractive to buyers who need that financial help.
The choice is yours, which gives you more control over your selling costs.
Here's a side-by-side of what changed for buyer-agent compensation when the NAR settlement took effect in August 2024, including how Opendoor structures buyer-agent pay today.
| Change | Before NAR settlement (pre-August 2024) | After NAR settlement (August 2024 onward) |
| --- | --- | --- |
| Where buyer-agent compensation is advertised | Often offered automatically through the MLS | No longer automatically offered through the MLS |
| How buyer-agent compensation is set | Typically built into the listing | Negotiated in writing between buyer and agent before touring homes |
| Opendoor's approach | Buyer-agent compensation offered on most listings | Buyer-agent compensation still offered on most listings; amount varies by market and is set by Opendoor per property |
| Buyer-agent-free path | Opendoor Checkout available | Opendoor Checkout still available in 23 states at 1% below list price |
Sources: [Opendoor Help Center — NAR settlement](https://help.opendoor.com/agents-partners/working-with-opendoor/nar-settlement) · [Opendoor Help Center — Buyer agent commission](https://help.opendoor.com/buying/financing-closing/buyer-agent-commission)
## **Commission math, rates, splits, and timing**
Real numbers help you plan your budget and net proceeds. Most commissions fall within a predictable range, though rates vary by market, property type, and agent experience.
### **Typical commission percentage range**
Most real estate commissions[ average 5.57%](https://www.bankrate.com/real-estate/realtor-fees/) of the sale price. You might see rates as low as 4% or as high as 7% depending on your market and situation. Luxury homes sometimes carry lower percentage rates because the dollar amount is already substantial. Vacant land or properties that take longer to sell might have higher rates to compensate agents for extended marketing efforts.
Your agent's experience, the services they provide, and local market competition all influence the rate you'll negotiate.
### **How commission affects your net proceeds**
Commission reduces what you walk away with from your home sale. On a $400,000 sale with a 6% commission, you'll pay $24,000 in agent fees. Add in[ other closing costs](https://www.opendoor.com/articles/how-much-does-it-cost-to-sell-a-house) — title insurance, transfer taxes, attorney fees — and your total costs might reach $30,000 to $35,000.
### **How commission affects your closing costs**
For buyers paying their agent directly, commission becomes an additional closing cost beyond your down payment, loan fees, and prepaid items like property taxes and insurance. If you're buying that $400,000 home and paying your agent 3%, that's $12,000 added to your cash-to-close.
Some lenders allow you to finance certain closing costs, but agent commissions typically come from your own funds. This expense can affect how much house you can afford, since you'll need more cash upfront.
[Get your offer](#)
Use this table as a quick reference for typical 2026 commission rates and who's most likely to pay each piece after the August 2024 settlement.
| Commission component | Typical 2026 range | National average | Who usually pays today |
| --- | --- | --- | --- |
| Total commission | 4.00% - 8.00% of sale price | ~5.70% 5.70% national avg, 2026 | Seller from closing proceeds, or split between sides |
| Listing-side commission | 2.00% - 4.00% | ~2.88% 2.88% listing-side avg, 2026 | Seller |
| Buyer-agent commission | 2.00% - 3.50% | ~2.82% 2.82% buyer-side avg, 2026 | Seller (offered), buyer (via concession or out of pocket), or negotiated per deal under NAR settlement rules |
| Opendoor service charge (in lieu of commission) | Varies by offer | Shown in offer breakdown | Seller, deducted from cash offer proceeds at closing |
Sources: [realtor.com](https://www.realtor.com/advice/sell/real-estate-commission-explained/) · [help.opendoor.com](https://help.opendoor.com/selling/how-it-works/how-is-opendoor-different)
Related: [how much does it cost to sell a house](https://www.opendoor.com/articles/how-much-does-it-cost-to-sell-a-house).
## Average real estate commission rates in 2026
Real estate commission has compressed slightly since the NAR settlement, but the 5%-6% total still anchors most U.S. deals. According to [Realtor.com's commission explainer](https://www.realtor.com/advice/sell/real-estate-commission-explained/), full-service brokerages typically quote between 5% and 6% combined, and recent national surveys peg the average total commission at roughly **5.70%** for 2026 5.70% national average total commission, 2026.
That total is almost always split unevenly: the listing-side share averages about **2.88%** and the buyer-agent share about **2.82%** nationally 2.88% listing / 2.82% buyer-side splits, 2026. The full negotiable band runs roughly 4% to 8% on the total and 2% to 4% on each side, with discount listing brokerages occasionally as low as 1%-1.5%.
A few drivers that move the needle:
- **Price point.** On higher-priced homes, agents will often agree to a lower percentage because the gross fee is still large.
- **Market temperature.** In hot markets, sellers can sometimes push the listing-side rate toward 2% and still attract a full-service agent; in slow markets, agents hold the line closer to 3%.
- **Service level.** Flat-fee MLS, limited-service listings, and discount brokerages cost less than full-service representation but shift work back to the seller.
- **Post-settlement buyer agreements.** Because buyers now negotiate their agent's fee in writing before touring (see the [NAR settlement update from Opendoor's Help Center](https://help.opendoor.com/agents-partners/working-with-opendoor/nar-settlement)), the buyer-side number is no longer set by the seller alone.
On a $400,000 sale, a 5.70% total commission works out to about $22,840 — usually deducted from the seller's proceeds at closing through the title company. If you'd rather skip the listing process and commission, you can [request a no-obligation Opendoor cash offer](https://www.opendoor.com/sell) and see a net-proceeds breakdown that shows the service charge instead of an agent fee.
## **Who pays commission when buying a house**
Buyers now face a decision they didn't have to make before: how to compensate their agent. You have options, and the choice affects both your upfront costs and your negotiating position.
### **Out of pocket versus rolled into price**
You can pay your agent directly at closing, bringing that cash to the table alongside your other closing costs. Or you can ask the seller to cover your agent's fee through a concession — essentially negotiating a higher purchase price that includes that cost.
If you're offering $400,000 on a home, you might offer $412,000 with a $12,000 seller concession toward your agent fee. The second approach means you're financing the commission through your mortgage, spreading that cost over 30 years with interest.
### **Impact on cash to close**
Paying your agent directly increases your immediate cash needs. If you're already stretching to cover a down payment, inspection fees, and other closing costs, adding a 3% commission can create a financial hurdle.
On a $400,000 purchase, that's an extra $12,000 you'll need in your bank account. However, some buyers prefer this approach because it keeps the purchase price lower, which can help if the home barely appraises or if you're in a competitive market where every dollar of offer price matters.
## **Who pays commission when selling a house**
As a seller, you'll pay your listing agent's commission — that hasn't changed. The question now is whether you'll also offer to cover the buyer's agent fee.
### **Net proceeds calculation**
Your net proceeds equal your sale price minus your mortgage payoff, commission, and[ other closing costs](https://www.opendoor.com/articles/hidden-fees-when-selling-a-house). Start with your sale price, subtract what you owe on your loan, subtract the listing agent commission (typically 2.5% to 3%), subtract any buyer agent commission you agree to pay, then subtract other costs like[ title insurance, transfer taxes, and attorney fees](https://www.opendoor.com/articles/how-much-are-closing-costs-for-seller).
On a $400,000 sale with a $250,000 mortgage and $30,000 in total costs, you'd net $120,000. What's left is what you'll receive at closing.
### **Effect on list price strategy**
Some sellers price their homes slightly higher to account for commission costs, effectively passing that expense to the buyer through the purchase price. Others price at true market value and accept that commission comes out of their equity.
Your strategy depends on your market: in a hot seller's market with low inventory, you might price higher and still attract buyers. In a buyer's market, you'll likely absorb more of the costs to stay competitive.
Related: [how much are closing costs for the seller](https://www.opendoor.com/articles/how-much-are-closing-costs-for-seller).
## Should sellers still pay the buyer's agent commission?
Since the August 2024 NAR settlement, seller-paid buyer-agent compensation is **optional**, not assumed. Per [Opendoor's Help Center summary of the rules](https://help.opendoor.com/agents-partners/working-with-opendoor/nar-settlement), buyer-agent compensation is no longer advertised through the MLS and must be negotiated in writing between the buyer and their agent before they tour homes. Sellers and platforms may still offer compensation, but it's a choice — not a blanket requirement.
In practice, most sellers in 2026 still offer something to attract buyer agents and keep the offer pool wide. A few patterns we see across deals:
- **Offer a stated buyer-agent commission upfront.** This signals to buyer agents that they'll get paid and tends to maximize showings, especially in a buyer's market.
- **Offer concessions instead.** Some sellers leave buyer-agent compensation off the listing and instead respond to offers that ask the seller to cover the buyer's agent through closing-cost credits. This makes the cost visible only when a real offer is on the table.
- **Pay only on a final-and-best basis.** In hot markets, some listing agents are advising sellers not to publish a buyer-agent fee and to let competing buyers either bring their own funds or fold the fee into their offer price.
- **Make no offer at all.** Lower-priced homes, FSBO listings, and certain investor sales now routinely close with the buyer paying their agent out of pocket. Buyers, in turn, have started negotiating flat fees and reduced retainers.
Which approach is right depends on local norms and your home's competitiveness. If you're not sure, ask your listing agent how the last 5 nearby sales handled buyer-agent compensation. And if you'd rather not navigate this at all, [Opendoor's cash offer](https://help.opendoor.com/selling/how-it-works/how-is-opendoor-different) replaces both sides of the agent commission with a single service charge shown in your offer breakdown.
## **Can you negotiate or reduce realtor fees**
Commission rates aren't set in stone — they're always negotiable. However, you'll want to balance cost savings against the value your agent provides.
### **Lower the listing percentage**
Ask your agent about reducing their commission rate—[37.4% of sellers negotiated](https://www.redfin.com/news/real-estate-commissions-may-2025/) their commission—especially if your home is move-in ready, priced competitively, or in a hot market where it will likely sell quickly. An agent might accept 2% instead of 3% if they expect a fast sale with minimal marketing costs.
You can also negotiate based on the services you need: if you're handling staging and photography yourself, you might justify a lower rate. The key is having this conversation before you sign the listing agreement.
### **Try tiered or flat fees**
Some agents offer tiered pricing based on your home's sale price, with lower percentages for higher-value properties. Others charge flat fees: you pay a set dollar amount regardless of sale price.
A $10,000 flat fee might be a great deal on a $500,000 home (2% effective rate) but expensive on a $200,000 property (5% effective rate). Alternative fee structures can work well if you know exactly what services you're getting for that fee.
### **Compare discount and flat fee brokers**
Discount brokerages offer reduced commission rates — often 1% to 2% — in exchange for streamlined services. You might get MLS listing and basic support but handle more of the process yourself.
Flat-fee MLS services list your home for a one-time fee, giving you exposure without ongoing agent support. Options like this work best if you're comfortable managing showings, negotiations, and paperwork with minimal guidance.
## **Ways to save on real estate commission**
Beyond negotiating with traditional agents, you have several paths to reduce or eliminate commission costs entirely.
### **Sell FSBO**
For Sale By Owner ([FSBO](https://www.opendoor.com/articles/sell-your-house-without-a-realtor)) means selling without a listing agent, eliminating that 2.5% to 3% commission. You'll handle pricing, marketing, showings, negotiations, and paperwork yourself.
This approach works if you have real estate knowledge, time to manage the process, and confidence in your negotiation skills. However, FSBO homes often sell for less than agent-assisted sales, and you might still pay a buyer's agent commission to attract represented buyers.
### **Use a limited service MLS**
Limited service MLS companies list your home on the MLS for a flat fee — typically a few hundred dollars — giving you broad exposure without an agent. You'll still handle showings and negotiations, but you'll reach buyers working with agents who search the MLS.
This hybrid approach costs far less than a traditional agent while maintaining visibility in the market. You'll want to budget for professional photos and accurate listing descriptions to compete with agent-listed homes.
### **Choose a discount brokerage**
Discount brokers provide traditional agent services at reduced rates, typically 1% to 2% instead of 3%. You'll get MLS listing, some marketing support, and guidance through the process, though the service level might be less comprehensive than full-service agents.
Discount brokerages often leverage technology to reduce costs, passing savings to you. This option balances cost savings with professional support.
### **Sell to a cash buyer**
Cash buyers and iBuyers purchase homes directly, eliminating agent commissions entirely. Companies like Opendoor provide instant offers and handle the entire transaction, letting you close on your timeline without showings or marketing.
While the offer might be slightly below market value, you'll save on commission, avoid repair costs, and skip the uncertainty of traditional sales.[ Get a cash offer](https://www.opendoor.com/address-entry) to see how this option compares for your home.
[Get your offer](#)
Related: [is for sale by owner worth it](https://www.opendoor.com/articles/is-for-sale-by-owner-worth-it) · [sell your house without a realtor](https://www.opendoor.com/articles/sell-your-house-without-a-realtor).
## How real estate commission varies by state
There is no statutory commission rate anywhere in the U.S. — every state lets buyers, sellers, and agents negotiate. But because local norms, transfer taxes, and brokerage competition vary, the typical commission ranges look slightly different by market. A useful reference point is [Realtor.com's overview of realtor fees and closing costs](https://www.realtor.com/advice/finance/realtor-fees-closing-costs/), which tracks the national 5%-6% band that most state markets fall inside.
A few state-level patterns worth knowing:
- **Texas.** Sellers typically still pay the listing fee; total commission usually lands around 5%-6%. Flat-fee and discount brokers are common in Austin, Dallas, and Houston, so listing-side rates of 1%-2% are achievable. Post-settlement, Texas buyers must sign a written representation agreement before touring.
- **Florida.** Total commission usually 5%-6%. Florida has no statutory rate and no state real estate transfer tax on the buyer in most counties, so listing-side rates between 2% and 3% are typical. Buyer-side compensation is increasingly handled through concessions in the contract.
- **California.** Total commission 5%-6% is standard, but rates in high-priced metros like the Bay Area can fall closer to 4%-5% on the total because the gross fee is large. California requires written buyer-agency agreements under the same NAR settlement rules.
- **New York.** Outside NYC, commission usually 5%-6%. In Manhattan and the outer boroughs, co-broke arrangements are still common, and sellers also face NYC transfer taxes and attorney fees on top of commission. Negotiate the listing rate first.
- **Illinois.** Total commission usually 5%-6% statewide. Sellers also handle a state and county transfer tax at closing. Discount brokers are well-established in the Chicago metro.
- **Colorado.** The Colorado Association of Realtors reports average total commission near the national 5.70% mark [5.70% Colorado average total commission, 2026](https://listwithclever.com/average-real-estate-commission-rate/colorado/). Negotiating the listing-side rate to 2%-2.5% is common with full-service agents in Denver and Boulder.
In every state, the rate is negotiable — and in every state, switching to a flat-fee broker, FSBO, or a cash buyer like Opendoor can cut the commission line out of your closing statement entirely. For a deeper look at how seller-side costs add up beyond commission, see our [hidden fees when selling a house](https://www.opendoor.com/articles/hidden-fees-when-selling-a-house) guide.
## **Selling to a cash buyer like Opendoor**
Cash offers provide an alternative to the traditional commission structure entirely. Instead of paying percentage-based fees, you'll know upfront exactly what you're receiving and what the transaction will cost.
### **Service fee versus traditional commission**
Opendoor charges a transparent service fee rather than a percentage-based commission. This fee covers the convenience of an instant offer, flexible closing timeline, and the ability to skip showings and repairs.
You'll see the fee clearly disclosed in your offer, with no surprises at closing. For many sellers, this predictability outweighs the potential of getting a slightly higher price through a traditional sale with uncertain commission costs.
### **Certainty and speed benefits**
Beyond cost considerations, cash offers eliminate the typical sale timeline. You won't wait for buyer financing to fall through, deal with[ inspection negotiations](https://www.opendoor.com/articles/how-long-does-it-take-to-sell-a-house), or wonder if the deal will close.
You can close in as few as 10 days or wait up to 60 days if you need time to move. This certainty matters when you're coordinating a job relocation, managing family transitions, or simply want to move forward with confidence.
Related: [what is a cash offer in real estate](https://www.opendoor.com/articles/what-is-a-cash-offer-in-real-estate-and-why-consider-it).
## **Ready to move, compare your options**
Knowing who pays realtor commission helps you make informed decisions about your home sale. Whether you choose a traditional agent, negotiate reduced fees, or explore cash offers, you'll want to compare your net proceeds across different approaches.
Factor in not just commission but also your timeline, stress level, and certainty of closing. Every home and situation is different, so the right choice depends on your priorities.
### **Get a cash offer**
See what a direct sale could mean for your bottom line.[ Get a free, no-obligation cash offer from Opendoor](https://www.opendoor.com/address-entry) and compare it with what you'd net from a traditional sale after commissions and closing costs.
**FAQs about who pays realtor commission**
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*Originally published at [https://www.opendoor.com/articles/who-pays-real-estate-agent-commission](https://www.opendoor.com/articles/who-pays-real-estate-agent-commission)*