Real estate commission is one of the largest costs in any home sale — and one of the least transparent. Most sellers know commission exists. Fewer understand exactly how it's calculated, who pays it, and how recent changes to industry rules have shifted the landscape.
Use the calculator on this page to see the exact dollar impact of different commission rates on any sale price. Then read below for the context that makes that number meaningful.
How real estate commission works
Commission is calculated as a percentage of the home's final sale price. Traditionally, the total commission has been 5–6%, split roughly equally between the seller's agent and the buyer's agent — typically 2.5–3% each.
That commission comes out of the seller's proceeds at closing. In the traditional model, the seller effectively pays both agents — their own and the buyer's.
2024 NAR Settlement Change: Following a landmark legal settlement, the National Association of Realtors changed rules requiring sellers to offer buyer agent compensation through MLS listings. Buyers must now agree to their agent's compensation in writing before touring homes. This is reshaping how commissions are negotiated and disclosed — and may increase seller flexibility on the buyer's agent portion.
Commission rates by context
| Agent Type | Typical Rate | What You Get |
|---|---|---|
| Full-service traditional | 2.5–3% per side | Full listing, marketing, showing, negotiation, closing support |
| Discount brokerage | 1–1.5% seller side | MLS listing, basic support — less hands-on guidance |
| Flat-fee MLS | $300–$1,500 flat | MLS listing only — you handle showings, negotiation, paperwork |
| For Sale By Owner (FSBO) | 0% (seller side) | No agent — buyer agent may still be offered 2–3% |
The key insight: even with FSBO, you may still need to offer buyer's agent compensation to attract agent-represented buyers. The seller's agent cost is the more negotiable of the two — especially on higher-priced homes where the dollar amounts are significant.
Why the same rate costs more on a more expensive home
A 3% commission on a $200,000 home is $6,000. The same 3% on a $600,000 home is $18,000. The rate doesn't change — but the service provided by the agent is largely the same. This is why commission negotiation tends to happen more often on higher-priced properties: there's more room to move, and the argument for a reduced rate is easier to make.
What the calculator shows you
Enter your expected sale price and the total commission rate. The calculator splits it between seller and buyer agents and shows you both the total cost and your net proceeds. You can adjust the split if your negotiated terms differ from the standard 50/50.
Frequently asked questions
The traditional total commission is 5–6% of the sale price, split between the buyer's and seller's agents (typically 2.5–3% each). Rates are negotiable and vary by market, price point, and agent. Discount brokerages may charge 1–2% on the seller's side.
Traditionally the seller pays both agents from their sale proceeds. Following the 2024 NAR settlement, buyers must now agree to their agent's compensation separately, and sellers are no longer required to offer buyer agent compensation through MLS listings. In practice, many sellers still offer it to attract buyers.
Yes — commission is always negotiable. Most agents will consider a reduced rate on higher-priced homes or in strong seller's markets. It's worth having the conversation directly. The worst answer is no.
At 6% total commission on $400,000 — $24,000 total ($12,000 per side). At 5% — $20,000. At a negotiated 4% — $16,000. Use the calculator above to see any combination instantly.
The settlement required NAR to remove rules mandating that sellers offer buyer agent compensation through MLS. Buyers must now sign a written agreement with their agent before touring homes, disclosing compensation. Sellers can still choose to offer buyer agent compensation — many do — but they're no longer required to.