Average Real Estate Commission Rates by State (2021)

Bailey Peterson

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Bailey Peterson

July 26th, 2021
Updated July 26th, 2021

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Find average real estate commission rates by state | Typical commission rates | How commission works | Who pays? | Why rates vary | How to save on commission | FAQs

📊 The data: We surveyed agents across the country, and found the average real estate commission cost to be 5.50%.

Real estate commission is almost always the biggest expense you'll face when you sell your home. On average, U.S. home sellers spend $16,440 on realtor fees — that's a huge bite out of your profits!

However, realtor commission rees aren't standardized or set in stone. You can always negotiate lower rates, which could mean saving thousands of dollars.

For example, if you sold a $400,000 house, working with a 1% commission realtor would save you $8,000 compared to the 2.5-3% listing fee many seller's agents charge.

The best low commission companies, like Clever, make it easier than ever to save. Clever pre-negotiates 1% or $3,000 listing fees with top-rated local agents. You'll get the support of a full-service agent from a trusted brokerage like Berkshire Hathaway or Keller Williams — but pay a fraction of the cost!

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How much is the average real estate commission?

To deliver home sellers the most accurate information on average realtor commission rates in each state, we conducted a comprehensive survey of active agents across the U.S.

We found that typical realtor commission rates were in the range of 4.53% to 6.48%.

Remember: these rates only represent averages. Commission rates aren't standardized in any official capacity and you can always negotiate realtor fees with your agent.

Average realtor commission for listing agents

According to our research typical commission rates for listing agents nationwide are in the range of 2.26% to 3.29% (2.79% on average).

For a home sold for $300,000 (which is around the national median home value), this translates to $6,760-$9,836.

We also found that listing commission rates can vary by as much as 45% depending on where you live. Here's how listing commissions differ in states with the highest and lowest typical costs.

📖 Listing agent commission is portion of the total real estate commission that is paid to the agent that represents the home seller (also called the listing agent). This is often around half of the total commission that is paid out.

Average buyer's agent commission rates

Nationwide, buyer's agents typically collect 2.27% to 3.19%, or 2.71% on average. This translates to $6,781-$9,549 in buyer's agent commission costs for a home sold for $300,000.

These figures represent the national average, though we found that buyer's agent commission rates varied by 1.23 percentage points depending on which state you live in — which is a significant cost difference.

Below, we've included a breakdown of how buyer's agent commissions compare across the country:

📖 Buyer's agent commission is the amount paid to the agent representing the home buyer during a home sale. This is paid from the proceeds generated by the home sale and is often half of the total realtor fees.

Average real estate commission by state

Commission rates can vary dramatically depending on where you live. In fact, we found that average real estate commission rates by state can vary by as much as a full percentage point. For example, in New Hampshire, rates were 4.83%. Live in New Mexico? You could pay up to 6.21%. On most home sales, that's a difference of thousands of dollars!

No matter where you live, paying average realtor fees will take a HUGE bite out of your profits when you sell your home. Thankfully, there are more affordable options if you want to save on commission without sacrificing the support of an agent.

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Keep reading to see average commission rates by state. But remember that, although these fees are typical for each state overall, they'll likely vary between cities.

Also, every brokerage sets its own rates, and an agent may quote you a higher or lower listing fee based on your home's estimated sale price and how quickly they expect it to sell.

Find your state below to learn more about average commission rates near you.

State
Rank
Rates
33
5.61%
16
5.25%
20
5.36%
44
5.91%
2
4.92%
26
5.50%
22
5.41%
36
5.75%
18
5.25%
21
5.38%
40
5.87%
17
5.25%
30
5.55%
15
5.21%
41
5.87%
43
5.90%
48
6.00%
35
5.73%
13
5.19%
23
5.45%
6
5.08%
3
4.97%
47
5.98%
34
5.68%
29
5.54%
45
5.92%
27
5.50%
19
5.29%
5
5.00%
1
4.83%
12
5.18%
51
6.21%
7
5.11%
24
5.45%
49
6.00%
39
5.84%
42
5.89%
14
5.19%
32
5.60%
8
5.15%
38
5.83%
4
5.00%
31
5.56%
37
5.78%
10
5.17%
50
6.00%
9
5.15%
11
5.17%
28
5.54%
46
5.93%
25
5.48%
National Average
N/A
5.50%

* Due to insufficient data, commission rates in these states were inferred from regional averages.

How do realtor fees work?

When you sell a home, there are typically two realtors involved: the buyer's agent and the listing agent. As the name implies, the buyer's agent represents the home buyer, and the listing agent represents the home seller.

The listing and buyer's agents get paid a portion of the home's price at closing, which is called the real estate agent commission — they are also referred to as realtor fees.

How average real estate commission costs factor into your home's sale price.

» LEARN: More about how realtor fees work.

Realtor fees are not typically paid upfront — instead, they are factored into the sales price of the home and are only paid out when the home's sale is finalized.

Here's how a realtor commission rate of 5.50% — which we found to be the national average — breaks down in terms of real dollars when you sell your house:

Home sale price
Real estate commission cost*
$50,000
$2,750
$150,000
$8,250
$350,000
$19,249
$700,000
$38,498

* Commission costs are calculated assuming a commission rate of 5.50%.

How realtor fees are split between the listing and buyer's agent

Real estate commission rates are commonly talked about as a single percentage (eg 5%). However, this figure is actually split to cover the cost of both the buyer's agent commission and the listing agent commission.

For example, if the total commission cost is 5%, then each agent would typically get around 2.5%:

  • Listing agent commission: 2.5%
  • Buyer's agent commission: 2.5%
  • Total realtor commission: 5% (2.5% + 2.5%)

Commissions are often split evenly between the buyer's agent and the listing agent. However, this can vary based on what is customary in your area.

We found that depending on what region you live in, commission splits could range from 48.6-51.4% to 51.4-48.6% for the listing and buyer's agent respectively.

Who pays realtor fees?

Home sellers pay real estate fees for both their own agent, and the agent representing the home buyer.

Why would home sellers pay for the buyer's agent? Well, there are a couple of ways to look at it:

Buyer's agent commission is a marketing cost for your home

  • Almost all buyers — nearly 90% — work with an agent to help them buy a home.[1]
  • These agents are more interested in showing homes to their clients that offer a competitive buyer's agent commission.

The buyer actually is paying for this cost, because it's baked into the sale price

  • Buyer's agent commission is factored into the sale price of the home.
  • If this commission wasn't offered, the home seller could lower their listing price while netting the same amount.
  • So you can argue that the cost is actually passed onto the home buyer.

Why are real estate agent commissions so expensive?

Realtor fees are a huge cost when you sell your home, so it makes sense to wonder why it's so expensive and if it makes sense to pay so much.

However, there are some justifiable reasons that agents charge what they do for their services:

  • On average, agents help you sell your home for more money than if you were to sell without the use of an agent
  • Agents don't get to keep all of the commission they earn from a home sale — they split it with the buyer's agent and their brokerage
  • Realtors take on risk by covering home-marking costs upfront

On the other hand, most agents also spend a lot of money on things that don't offer customers much direct value. Paying for TV ads and billboards helps agents generate new business, but it doesn't help you sell your home faster or for more money.

Instead, companies like Clever help realtors reduce their marketing costs, which allows them to charge lower rates while providing the same level of service.

💰 Never pay the full 6% commission again

The "standard" 6% commission predates the internet, when realtors had to work harder to find clients and potential buyers.

At Clever, we connect top-rated real estate agents with sellers like you at zero upfront cost to the agents — so they’re willing to pass savings along to you.

You'll get full-service support for pre-negotiated listing fees of just 1% or $3,000, saving you thousands!

Real estate agents help you get more for your home

In addition to helping you navigate your real estate transaction, one of the most important things that agents do is ensure that you get the highest possible price for your home.

Studies have shown that homes sold by real estate agents net 5.82% more than comparable homes sold without an agent.[2] With that in mind, it's fair to say that many home sellers come out ahead by working with an agent, even after paying realtor fees.

Most real estate agents have to split their commission with their broker

Most agents don't get to keep all of their commission when a home sale closes. A portion of their commission is paid to their principal broker— which are real estate professionals that supervise real estate transactions done by agents that aren't qualified to process deals independently.

Principal brokers can get anywhere from 50% to 25% of an agent's commission on a home sale — meaning the amount your listing agent earns might be significantly less than you think.

For example, if a listing agent sells a home for $200,000 where the total commission rate is 5%, they may actually walk away with $3,000 after factoring in the commission split with both the buyer's agent, and their broker. This might still feel like a significant sum, but it is substantially less than the total commission cost of $10,000.

Listing agents pay for home marketing costs upfront

Real estate agents take on a significant amount of risk when they agree to help you list your home, which factors into the high cost of realtor fees.

This risk comes from the fact that agents commit their time without any guarantee they will be compensated.

Furthermore, agents often pay for marketing expenses such as photography, advertising, and staging up front and out of pocket. If they fail to sell your home, they don't collect any commission, aren't compensated for their time, and don't recoup any of the marketing costs they incurred.

Factors that influence commission rates

In addition to regional trends, there are a number of factors that influence how much you end up paying in realtor fees when you sell your home.

Most of the factors that affect how much an agent might charge for a given home sale stems from the fact that realtor fees are negotiable. Agents will lower or raise the amount they charge depending on:

  • The home
  • The client
  • The current state of the real estate market

Based on our research, working with repeat clients is the most common reason that real estate agents agree to accept lower rates.

Here's a full breakdown of the most common factors that cause agents to lower their commission rates:

Conversely, our survey showed that the most common reason that listing agents negotiate for higher rates was that home sellers requested expensive marketing.

Below, we've included the full breakdown of all of the factors:

How home value affects average real estate commission rates by state

Typically, realtors will be more willing to accept lower commission rates for homes that have high values.

Our study of commission rates found that in real estate markets where home values were high, realtor fees were typically lower than the national average. For example, commission rates averaged 5.11% across the states with the highest median home values — which is markedly less than the national average of 5.50%.

Based on our survey's findings, homeowners in the five states with the highest property values would pay 11% less in realtor fees when they sell their home than residents in the states with the five lowest home values — as a percentage relative to their home's sale price.

So why would high home values cause agents to lower their rates? Mainly, it's because the work that agents have to do to sell homes is not significantly different for high and low value homes.

Agent's earn commission based on the home's selling price, so they stand to earn a lot more money selling higher value homes — relative to their effort and time investment — than lower value homes.

Furthermore, even if they have to spend more time or money marketing a high cost home, it may be worth it for that agent.

Consider the following example, where the listing agent earns 57% more per hour selling a $500,000 home than they would selling a $250,000 home, even after factoring in the marketing costs and time commitment:

Home sale price
$250,000
$500,000
Time to sell
10 weeks
12 weeks
Out of pocket marketing cost
$500
$1,000
Time spent actively selling (eg showing, marketing, etc.) the home
30 hours
34 hours
Commission earned
$4,500
$9,000
Net commission earned per hour of time actively marketing/showing the home
$150
$235

Why realtors lower their fees for repeat clients

Having steady business is valuable for real estate agents — home sellers can use this fact to negotiate lower commission rates.

For real estate agents, having consistent streams of clients is crucial to their livelihood. Afterall, real estate agents typically only process around 12 real estate transactions per year— meaning that gaining a deal has a large impact on their income.[1]

To agents, there is more value in having reliable repeat business, than there is in maximizing their commission they earn on any single deal. Because of this, agents often lower rates to attract clients that are likely to use them for future transactions.

How to save big on commission fees

If you want to save on real estate commission, you have many options, from trying to negotiate a discount to listing your house for sale by owner. But, getting your realtor to lower their fee can be tricky, and selling DIY opens you up to substantial legal and financial risks.

The best strategy for most home sellers is working with a low commission real estate agent. The top discount companies, like Clever Real Estate, provide all the service of a full-commission brokerage — but charge a LOT less.

With Clever, you'll get full service for a flat $3,000 listing fee (or just 1% on homes above $350,000), which lets you keep more money in your pocket when you sell your home.

👋 Get free advice from a licensed expert

If you're looking to buy or sell a house and weighing your options, Clever can help!

Our fully licensed Concierge Team is standing by to answer questions and provide free, objective advice on how to get the best outcome with your sale or purchase.

Ready to get started?

Give us a call at 1-833-2-CLEVER or enter your basic info below. Our Concierge Team will be in touch shortly to help.

Remember, this service is 100% free and there’s never any obligation.

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Methodology

Data on commission rates is based on a survey of 915 of our partner agents, in which we asked them to indicate the typical rates for both buyer's and seller's agents in their area.

The data featured on this page is not meant to imply that commission rates are fixed — commissions rates are always negotiable. These figures represent ballpark estimates of what home sellers can expect to pay in real estate agent fees when they sell their home.

In addition to data from our survey, we also utilized home value data from Zillow, which was current as of July 2021.[3]

FAQs about realtor commission

</p><p>A fair real estate commission depends on a number of factors, including your home price, how quickly you expect your house to sell, and what services your agent will provide. You can sometimes <a href="https://listwithclever.com/real-estate-blog/how-to-negotiate-realtor-commission/">negotiate a lower listing fee</a>, especially if you're willing to do more of the work yourself. But most sellers find the most overall value with a <a href="https://listwithclever.com/low-commission-real-estate/">low cost realtor</a> who offers full service for a discounted rate. <a href="https://listwithclever.com/real-estate-blog/which-real-estate-company-has-the-lowest-commission/">Find the best low commission companies here!</a></p><p>

<br>Real estate commission costs an average of 5.50% nationwide, but varies by state from 4.53% to 6.48%. <a href="https://listwithclever.com/average-real-estate-commission-rate/#fees-by-state">Find average commission rates in your state here!</a></p><p>

ARTICLE SOURCES
[1]

National Association of Realtors. "Quick Real Estate Statistics." 

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