What Is a Real Estate Commission? 5 Myths Busted for First-Time Sellers

What are agent fees and commissions?

A real estate commission is the fee you pay a real estate agent for helping you buy or sell a home. It’s usually a percentage of the home’s final sale price, though the exact amount can vary based on your market and the agreement you make with your agent.

Christman estimates that most real estate commission fees are between 4% and 10% of the total sales price, but this number can vary greatly depending on your location and market conditions.

Historically, the industry standard was 6%, split between the buyer’s and seller’s agents. Sellers would typically cover these fees, which are deducted from their total profit on the
sale.

However, in light of the recent National Association of Realtors (NAR) lawsuit settlement, sellers no longer have to offer a commission to the buyer’s agent. Under the new commission structure, buyers are expected to negotiate directly with their agents.

This change means sellers save money since they’ll only be responsible for their listing agent’s fee, usually around 3% of the home’s sale price. However, in some cases, sellers might still need to offer a decent commission to attract buyers or speed up the home sale.

In fact, HomeLight’s Top Agent Insights for Spring/Summer 2026 report shows that 57% of agents report sellers are still most likely to cover the buyer’s agent commission.

Commission rates often dip in a seller’s market because homes tend to sell for higher prices. Since agents can earn more from a higher sale price, they may not need to charge as much in commission.

“At the end of the day, what I think people need to know is that it’s not important how much you pay in commission,” Christman explains. “It’s more important what you net. And the right agent will get you a higher price through better marketing, better negotiation, and the best exposure.”

While this amount might still seem high to some sellers, it’s important to remember that your real estate agent is helping you sell for more money, making their commission well worth the cost.

»Learn more: Want to plan your sale or purchase budget more accurately? Try the Agent Commissions Calculator to break down your estimated commission costs in minutes.

What services do real estate agent commissions cover?

Most people get fixated on the cost of commission itself, but it’s worth looking at what you’re getting in return. Real estate agents handle a lot of work before, during, and after a sale. Here’s a closer look at what those commissions typically cover.

Seller’s agent services

Prepping and presenting the house

When you’re selling your home, first impressions matter. Many listing agents include professional photography and staging as part of their services at no extra cost. For example, Christman hires a professional organizer to help sellers pack up and declutter, making the home easier to show and sell.

If your home needs repairs before closing, such as electrical or plumbing work, your agent can also recommend trusted local contractors. “The contractors we work with are tried and true. We trust them,” Christman says. “We know they do good work and they’re very competitive with their pricing. All of that together equals more money in the seller’s pocket.”

Marketing the house

Beyond photos and staging, your agent will write a compelling listing description and get your home on the multiple listing service (MLS), where it can be seen by other agents and buyers. The more exposure your home gets, the better your chances of attracting multiple offers and stronger bids.

Working with the appraiser

Sometimes, a home appraises for less than the agreed-upon sale price, which can create a problem because lenders usually won’t finance more than the appraised value. When that happens, the seller’s agent can work with the appraiser by providing recent comparable sales (comps) and details about the home’s features and upgrades to help support the contract price.

“It doesn’t happen very often with our team that we get a low appraisal because we do everything we can ahead of time,” Christman comments. “Like we provide feature lists to make sure the appraiser doesn’t miss anything, and we provide the best comps that we can.”

Holding open houses and conducting tours

Showing your home to strangers can be more emotionally draining than most sellers expect. A seller’s agent steps in to manage that entire process, from screening potential buyers to making sure only serious, qualified people are touring your home. They also handle open houses and private showings, so you don’t have to deal with the stress or safety concerns yourself.

Beyond logistics, they know how to present your home in the best light and answer buyer questions in a way that builds interest and confidence. All of this helps keep the process smoother, safer, and more likely to lead to strong offers.

Reviewing offers

Once offers start coming in, your agent helps you make sense of everything. They break down the details so you can see more than just the price, including terms, contingencies, and timing. They’ll also handle negotiations and talk directly with the other agent so you don’t have to go back and forth yourself.

In a seller’s market, where multiple offers are common, this kind of guidance really helps you avoid getting overwhelmed or missing something important. The goal is to help you land on the offer that works best for you overall, not just the one that looks the highest on paper.

Buyer’s agent services

Building a relationship with the seller

Although “love letters” are largely controversial, buyer’s agents can still make an introduction between the buyer and the seller. When homes are getting multiple offers, standing out early in the process can make a difference.

That’s where a buyer’s agent can help put a name and story behind the offer. In a competitive seller’s market, those small personal touches can help your offer feel more memorable.

“We just share a little bit about them personally in the intro of the email just to help the seller connect with the buyer as a person,” Christman states.

Make a compelling offer

As a buyer, putting together a strong offer is key if you want to stand out and get your offer accepted. But that doesn’t always mean you have to be the highest bidder.

Sometimes, the structure of your offer matters just as much as the price. Things like contingencies, closing timelines, and financing strength can all make a big difference. A good buyer’s agent helps you shape all of those pieces so your offer is competitive in more ways than one.

“We can sometimes get our offers accepted when they’re not the highest offer because of offering more appealing terms,” Christman comments. “Like maybe they can’t offer the highest price, but they can let [the seller] stay for free for two months.”

Show properties

Buyer’s agents also do the hard work of searching for properties that fit their clients’ wishlists, driving them to the properties, and showing them. With so many properties coming on and off the market over the last couple of years, this timesaving skillset is especially important.

5 commission myths to watch out for

If you’re not familiar with the ins and outs of commission fees, you may have fallen into the trap of some pervasive myths about them. Our expert agent Christman sets the record straight. Here are some myths you can be assured are false:

Myth 1: A discount commission agent will save you money in the long run

Some agents with less experience will offer a lower fee to their sellers, which might save them 1 to 2% of the sales price. However, just because one real estate agent offers a lower percentage commission than another doesn’t mean you’ll net more money working with them.

“I will say that if they offer a low commission to a cooperating agent, there is a risk that they won’t get as much exposure,” Christman explains.

Exposure often leads to more offers, meaning a lower-rate agent might not bring in as many offers. That could lead to a lower sales price and less money in your pocket in the end.

Myth 2: You can’t negotiate a real estate agent’s fee

Almost everything in real estate is negotiable. Especially in a seller’s market, you can definitely negotiate your agent’s commission. Christman says that sellers usually request a lower commission in order to net more, which she can help alleviate by bringing in higher offers. Still, she’s open to negotiating her terms.

“I’m committed to net them more than any other agent will,” she explains. “So I’ll definitely work with them, especially if they’re in a life crisis.”

Negotiating real estate commission doesn’t have to feel uncomfortable. It’s a normal part of the process for many sellers. Here are some tips on how you can negotiate agent compensation:

• Know the local average: Start by understanding typical commission rates in your area so you have a realistic baseline to work from. Rates can vary depending on location, price point, and market conditions.
• Assess your home and market conditions: A well-priced, turnkey home in a hot market may give you more room to negotiate than a property that could take longer to sell.
• Compare multiple agents: Talk to different agents or brokerages to see not just their fees, but also what services and value they bring to the table.
• Be open to flexible arrangements: Some agents may be willing to adjust their commission if the listing is straightforward or if you’re planning multiple transactions with them.

Commission fees vary by market and region: In hot real estate markets, agents may lower their fees a bit just to stay competitive. When homes are selling quickly, they can still make a solid income even with a smaller cut. In slower or less active areas, commission rates are often higher to make up for longer selling times. It comes down to local market conditions and how quickly homes are moving.

Myth 3: You still have to pay an agent’s commission if your house doesn’t sell

This is wrong in most instances. The vast majority of buyers’ and sellers’ agents will not charge a commission on a deal that doesn’t go through. So don’t worry about having to shell out thousands of dollars even if your house doesn’t sell.

“So [the agents] may spend a ton of time marketing a house, but if it doesn’t close, they’re just out that money,” Christman comments.

»Learn more: Wondering why your home is sitting on the market? Try the Why My Home Isn’t Selling Reason Randomizer to uncover what might be holding it back and how to turn things around.

Myth 4: Real estate agents net all of their commissions

This is a common myth. It can be jarring to see a commission of $15,000 on a $300,000 home sale. Sellers might wonder why a real estate agent earns that much money on one transaction. However, not all of that money goes into their pocket.

If you cover both the listing and the buyer’s agent fees, your agent will split the fee with the buyer’s agent. Sometimes this is split 50/50, but other times it might be divided unevenly if the seller’s team had higher upfront costs.

Additionally, real estate agents have to pay their brokerages unless they are brokers themselves. Brokers have received more training and can have other real estate agents work under them. The title also comes with more responsibility. Agents and brokers also have additional costs such as insurance and taxes.

In addition, real estate commissions help cover the cost of marketing your home. That can include professional photography, staging, listing on the MLS, online ads, and sometimes even video tours or social media promotion. These efforts are what get your home in front of more buyers in the first place. The wider and better your home is marketed, the better your chances of attracting strong offers.

“It’s not all just this money in our pocket. And I think a lot of times people think we’re literally just sitting in an office waiting for the phone to ring, doing nothing,” Christman says. “But we’re all working 40+ hours a week.”

Myth 5: A dual agency will result in lower real estate commissions

Dual agency is when one agent represents both the buyer and the seller. While this is illegal in several states due to the conflict of interest in which it places agents, it can actually net agents much more money on a single transaction.

As mentioned, in the traditional set-up, the agent’s commission is split between the seller’s and buyer’s agents. But because there’s only one agent in the transaction, they can charge the same percentage commission without having to split it with anybody else. It’ll usually cost you, the seller, the same amount of money.

Put an expert on your side

To summarize, you can negotiate your real estate agent’s fees, but it’s important to remember what you’re paying for. Having a professional real estate agent represent your sale can mean more money in your pocket, even if the sticker price seems shocking.

“I can’t imagine anything more terrifying than not having an expert on your side just to guide you through the law, find good people that you trust to do inspections and repairs, all of it,” Christman says. “I can’t imagine not having someone to guide you who’s an expert through one of the biggest sales in your life.”

To connect with a proven seller’s agent in your market, try HomeLight’s Agent Match tool. Our data shows that the top 5% of real estate agents across the U.S. sell homes for as much as 10% more than the average agent.

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