How to Pay the Real Estate Agent Commission


Real estate agents get paid a commission when they sell a property. The amount of

the commission varies depending on whether the agent represents the buyer or

seller, and it’s usually calculated as a percentage of the property sale price. While

some buyers and sellers are wary of this arrangement, which can add up to a

substantial amount of money over the course of a home sale, it’s important for

homebuyers and sellers to understand how real estate agent commissions work and

that they are able to negotiate these rates.


It’s common for home sellers to pay the real estate commission of both their own

agent and the agent who will represent whoever purchases their property. This

means that a home seller will have to set aside 6% of the property’s sale price for

these fees, which can be significant on a large home. However, home sellers can

often negotiate with their own agents to lower these rates.


Some real estate agents are also employed by brokerage firms that pay them a

salary rather than a commission for each property sale. These agents and brokers

still earn a commission for each property they sell, but this can be significantly less

than the standard 6%. For example, the national discount brokerage Redfin pays its

agents a flat salary of $100,000 per year. Also read


Real estate agents who are just starting out in the business may be more willing to

negotiate their commission rates because they are still establishing themselves and

building a positive reputation. However, experienced and high-volume agents who

already have a lock on the market might be less flexible in their negotiation tactics.

One way to make your agent more likely to lower their commission rate is to offer to

do some of the marketing yourself. For instance, you could offer to host an open

house or hire a professional photographer to help promote your property. This will

save your agent the up-front cost of these expenses and potentially allow them to

pass on some of the savings to you.


Additionally, many real estate agents have other business expenses that they need

to cover to keep their operations running smoothly. These may include things like

business cards, flyers, and advertising on social media. As a result, these costs can

eat into the amount of money that an agent has left over after paying their



As a result, it’s a good idea for all real estate agents to set aside some of their

commission earnings for these necessary business expenses. This will ensure that

they have enough money to continue to operate their businesses and serve their

clients effectively. It will also provide them with some flexibility should they need to

use the money for unforeseen expenses in the future, such as an emergency car

repair or unplanned home repairs. This can also be a great way to ensure that an

agent has the funds available to continue investing in their career, such as attending

a real estate conference or taking online courses that teach new skills and