Realtors get paid by commission. That’s a percentage of the home’s sale price, paid at closing out of the seller’s proceeds. Since 2024, the buyer’s agent’s share has to be agreed in writing before the buyer tours homes. The money splits first between the listing and buyer brokerages, then again between each broker and agent. Most agents get no hourly pay or salary, and nobody is paid unless the deal closes.
Key takeaways
- Commission is usually a percentage of the sale price. In closed-transaction data from Paperless Pipeline, listing sides averaged 2.54% and buyer sides 2.69% after the NAR settlement, about 5.23% combined.
- The check gets split twice: between the two brokerages, then between each brokerage and its agent. In that same data, split-model brokerages kept about 15% of gross commission.
- Since August 17, 2024, buyers sign a written agreement stating their agent’s pay before touring, and offers of buyer-agent pay no longer appear on the MLS. If there’s no closing, there’s usually no paycheck for either agent.
- The worked example below runs the September 2026 national median price of $417,500 through every line, so you can see the real dollars.
How does commission move at closing?
I’ve sat at a lot of closing tables, and this is the part most sellers miss. Commission never arrives as a bill. You don’t write a check to your agent.
The title or settlement company handles it. It lists the commission on your closing statement, takes it out of the sale price along with your mortgage payoff and other costs, and sends each brokerage its share. You get what’s left.
That’s why it feels invisible. And it’s why so many sellers underestimate it, even though on a typical sale it’s the biggest cost of selling.
The rate comes from the listing agreement you sign, often weeks before anyone writes an offer. If you want to know what you’re paying for before you agree to a number, here’s what a realtor does from listing to closing.
How is a realtor’s commission split?
The total gets split twice before your agent sees any of it.
First split: between brokerages. Every agent works under a licensed broker. That’s what a broker is in real estate, and it’s the reason your agent’s brokerage, not the agent personally, receives the check. The listing brokerage gets the listing side. The buyer’s brokerage gets the buyer side.
Second split: between each brokerage and its agent. The brokerage keeps a share and passes the rest to the agent who did the work. Paperless Pipeline’s brokerage data snapshot, which covers 328,000 closed transactions at 634 brokerages, found that split-model brokerages kept about 15% of gross commission. Flat-fee brokerage models kept about 6%.
Here’s one check followed all the way down. It uses the NAR September 2026 median existing-home price of $417,500 and Pipeline’s post-settlement listing-side average:
- Listing side at 2.54% goes to the listing brokerage: $10,605
- The agent’s share at a 60/40 agent/broker split: $6,363
- Out of that, the agent pays for marketing, photography, MLS and association dues, E&O insurance, and self-employment taxes
That 60/40 split is an illustration, not data. I picked a tighter split on purpose. Given the 15% average, plenty of agents keep more. Either way, the headline rate on your listing agreement is far from what your agent takes home.
Local prices change the dollars a lot. For a regional version, see how much commission a realtor makes in NJ.
Who pays the realtor now, the buyer or the seller?
For decades the seller paid both agents. The listing agreement set a total rate, and the seller’s proceeds covered the buyer’s agent too.
The NAR practice changes that took effect August 17, 2024 changed how that works. According to NAR’s summary of what the settlement means for buyers and sellers:
- Agents working with buyers must sign a written agreement with the buyer before touring a home.
- The agreement must state the amount or rate of compensation in a way you can actually calculate. Open-ended terms aren’t allowed.
- The buyer’s agent can’t receive more than the agreed amount from any source.
- The agreement must say plainly that broker fees and commissions are fully negotiable and aren’t set by law.
- Offers of compensation to buyer brokers can no longer be posted on the MLS.
So who pays? Often it’s still the seller. Many sellers offer to cover some or all of the buyer agent’s pay as a negotiated concession, because it can bring in more buyers and stronger offers. Anything the seller doesn’t cover is between the buyer and their agent under the buyer agreement.
The settlement didn’t push buyer-side pay down in Pipeline’s numbers. Among the same 377 brokerages before and after, average buyer-side rates went from 2.64% to 2.69%, and listing sides slipped from 2.58% to 2.54%. Buyer sides paying more than 3% went from 1 in 7 (January to July 2024) to 1 in 5 over the last 12 months.
What did change is that every number is now negotiated and on paper. If you know to ask, that works in your favor.
How do buyer’s agents get paid?
Buyer’s agents are paid at closing, at the amount set in their written agreement with the buyer. That money usually comes through the deal, often from a seller concession, and sometimes partly from the buyer.
The rate tends to fall as the price rises. Here are Pipeline’s average buyer-side rates for the last 12 months:
- Under $250K: 2.82%
- $250K to $500K: 2.73%
- $500K to $1M: 2.52%
- $1M to $2M: 2.38%
- $2M and up: 2.19%
On a $350,000 sale at the 2.73% average, the buyer’s side collects $9,555. That then goes through the same broker/agent split described above.
Do realtors get paid hourly or a salary?
Most don’t. The typical agent is self-employed and paid only by commission, so the open houses, pricing work, and late-night offer calls aren’t paid by the hour.
There are exceptions. Some teams and brokerages pay salaries.
Why should a seller care how an agent is paid? Incentives. An agent who eats only when a deal closes is under real pressure to close fast. Most handle that pressure fine, but you should know it exists.
Do realtors get paid for showings, or if the house doesn’t sell?
Generally, no on both. A standard listing agreement pays commission only when the home closes. If it never sells, the listing agent absorbs the time and marketing costs.
The buyer side works the same way. A buyer’s agent can show you fifteen houses over three months and earn nothing until you close on one. If the deal falls apart at inspection, the paycheck goes with it. That said, the buyer agreement is the document that controls this, so read it before you sign.
Do realtors make good money?
Some do. The median agent does far less than one big commission check suggests.
Across about 21,000 producing agents in Pipeline’s data, the median agent closed 3 deals in 2025 and earned about $23.7K in gross commission. That’s before the costs of running their business. 43% closed two or fewer deals, and only 14% averaged one deal a month. The top 10% of agents earned 47% of all gross commission.
One caveat: this data covers brokerages that use Paperless Pipeline. It isn’t the whole U.S. market. Still, the pattern lines up with what I’ve seen for years. A small group of busy agents earns most of the money, and many agents close only a few deals a year.
Other ways realtors get paid
The percentage model runs the industry, but there are a few variations:
- Flat fee. Some brokerages charge a set dollar amount instead of a percentage. Here’s how discount real estate brokers price their services.
- Referral fees. An agent who sends a client to another agent often collects around 25% of the receiving agent’s commission.
- Dual agency. A listing agent who also brings the buyer can earn both sides. State rules vary, so ask how your agent handles it.
What does commission cost you at today’s median?
This uses the $417,500 median sale and Pipeline’s post-settlement averages. Only the listing side changes between the two columns.
| Line | Typical (S2 averages) | With a 1% listing fee |
|---|---|---|
| Listing side | 2.54% = $10,605 | 1% = $4,175 |
| Buyer side (negotiable) | 2.69% = $11,231 | 2.69% = $11,231 |
| Total | $21,836 | $15,406 |
| Difference | $6,430 less |
If your listing agent quotes a full 3%, the listing side alone is $12,525. At 1%, you’d keep $8,350 more on that side. It’s the same house, the same buyer, and the same closing. The only thing that changed is one line in the listing agreement.
The dollar gap grows as the price goes up. To check your own price, run the numbers in the commission calculator. If you’re selling in Virginia, our guide to selling a house in Virginia walks through that market.
Where a 1% listing fee fits
Houwzer is a full-service brokerage. Our 1% listing fee replaces the traditional 2.5% to 3% listing-side commission.
The service list stays the same: professional photography, a written pricing analysis, the MLS listing, syndication to Zillow and Realtor.com, showing coordination, offer negotiation, and support through inspection and appraisal. Newfound Title handles closing in house.
If you’re skeptical, that’s fair. Here’s how 1% commission agents save sellers thousands, whether 1% commission real estate actually works, and how Houwzer compares.
If you’re getting ready to list, you can see what selling with Houwzer looks like.
How to negotiate what you pay before you sign
After years of watching these deals close, my advice is to read the compensation line before you sign, not after. Here’s what to ask:
- What’s the listing-side rate, and what exactly does it cover? Get the service list in writing.
- What will you offer the buyer’s side, if anything? That’s a separate decision, and you can make it offer by offer.
- Is there anything owed if the home doesn’t sell? The answer should be clear in the agreement.
- Would you do it for less? Sometimes the answer is no. Often it’s yes.
There’s no legal standard rate. The number on the first listing agreement you see is just an opening offer. For a side-by-side look at what counts as a fair realtor fee, start there before your listing appointment.
Frequently asked questions
Do realtors get paid hourly?
Most don’t. The typical agent is self-employed and earns only commission when a deal closes. A few teams and brokerages pay salaries.
Does a realtor get paid if the house doesn’t sell?
Usually not. A standard listing agreement pays commission only at closing, so if the home never sells, the agent absorbs their time and marketing costs. Read your agreement to confirm, because it sets the terms.
Who pays the buyer’s agent now?
The buyer signs a written agreement before touring that states what their agent will be paid. Sellers often cover some or all of that pay as a negotiated concession. Whatever the seller doesn’t cover is settled between the buyer and their agent under that agreement.
How much of the commission does the agent keep?
It depends on the agent’s split with their brokerage. In Pipeline’s data, split-model brokerages kept about 15% of gross commission. In a tighter 60/40 example, a $10,605 listing side leaves the agent about $6,363, and they pay their own business costs and taxes out of that.
Can you negotiate what a realtor gets paid?
Yes. Since 2024, buyer agreements must state plainly that commissions are fully negotiable and aren’t set by law, and the same is true of listing commissions. You can negotiate the rate, ask for a flat or reduced listing fee, or hire a brokerage that charges differently.
