The real estate commission is a percentage of the home sale price that goes to real

estate agents. It is usually paid by the seller, but it can also be split between buyers’

agents and listing agents. Real estate commissions are not set, and they can vary

depending on the real estate market and local laws.

Most of the time, real estate commission is a fixed amount that is agreed upon in the

seller’s broker agreement. Generally, it is between 5% and 6% of the sale price.

However, it is not uncommon for agents to negotiate a lower commission rate in

exchange for listing a property or selling a home faster.

Unike some industries, the seller is typically responsible for paying real estate agent

fees when they sell their home. While the exact amount of realtor fees is typically

negotiated in the listing agreement, many homeowners do not haggle over real

estate commission rates and simply accept the given rate.

The reason for this is that real estate agent commissions are a marketing cost, and

sellers want to incentivize buyer’s agents to show their home and sell it quickly.

While there are some exceptions, the vast majority of real estate agents offer a

reduced commission rate in exchange for repeat business from clients. This is

especially true for home sellers who plan on purchasing another property in the

future, and who are willing to work with the same agent for their next real estate

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When a home is sold, the listing agent’s commission is paid out to the broker and

then the buyer’s agent. In most cases, this is done in a 50-50 split. So, for example,

if a home sells for $25,000, the listing agent would receive $12,500 and the buyer’s

agent would receive $12,000. In addition to the commission splits, there are often

additional brokerage fees that must be paid by the agents. These are often a

combination of a desk fee, a transaction fee and a cut of the broker’s profits.

In general, the more experienced agents will get a higher split than less-experienced

agents. This is because the more experienced agents are usually able to close deals

at a quicker pace. This means that they are able to generate more revenue for their

broker and earn more money in commissions.


As a result, the overall average real estate agent commission in New York has been

slowly decreasing since 2021. This could be due to a cooler housing market, or it

may just mean that it takes more work for real estate agents to sell homes at the

current prices.

Ultimately, the commission model in the real estate industry is complicated and can

be frustrating for both home sellers and home buyers. By understanding how the

commission structure works, however, both parties can make the best decisions for

their specific situation.