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What Is Realtor Commission? How much do They Charge?

  • Mar 07, 2022
  • Real Estate
real estate brokerage Houston


If you are out there to buy or sell a property, there is a big chance that you will end up taking the help of a real estate agent. Participation of a real estate agent has many good reasons that make the buying and selling process effortless for both buyer and seller.

When a property is sold, the real estate agent involved throughout the transaction of the deal collects a fee called “Realtor Commission”, or sometimes as “realtor fees”.

The real estate agents make money through commissions based on a percentage of a property selling price. The earnings of an agent depend on many factors like the sale price of the property, the number of transactions they complete, how much percentage they get on the sale price, and the split of the agent’s commission with their corresponding broker or buyer’s agent.

Agent Vs Broker

Sometimes there is an overlap between the term agent and broker to people who are new to the industry or not much familiar with it. Both works for the same goal but in a different manner. 

In the real estate business, licensed agents can sell property in their state or work under a brokerage, while a broker has the license to own a real estate firm, sell properties individually, or can employ real estate agents to facilitate the real estate transactions. 

Find yourself a new home or sell your property, contact your nearest Real estate brokerage in Houston.

How Does Real Estate Agent Commission Work?

Realtors are never paid upfront by the buyers or sellers they represent. The realtors get a commission on the closure of the deal. Further, every agent has an agreement with their brokerage firm specifying the agent’s and broker’s cut on the earned commission. The split can be according to the mutual understanding of both parties.

A listing agreement (contract) is signed between the agent and the owner of the property where the owner authorizes the agent to represent on their behalf, find the buyers for the property, and negotiate. In return, the owner pays a commission. The agent’s compensation is specified in the listing agreement.

Usually, the standard commission is 6% though it can range between 4% to 6% according to the areas across the country. Sometimes commissions can also fluctuate depending on the market. 

Don’t be in the wrong impression that seller agents will be putting 6% in their pockets. Further, the seller agent has to splits the commission with the buyer’s agent. Some of you might be thinking about this split, or some sellers might not like the idea of their agent sharing half of the fee with the buyer’s agent. But, don’t overlook the fact that to sell your property, you need buyers, and to get more buyers, one has to have the right marketing strategy.

Continue reading to know how the idea of splitting the agent’s commission works as a win-win situation for both the buyer and seller:

  • The buyer’s agent is the one who brings his clients to buy your home or any other property. Thus, minimizing your efforts.
     
  • As a seller, if you won’t agree to the idea of paying the buyer’s agent commission, then the buyer has to take the load of paying his agent the commission. The possibility is that the buyer won’t feel okay in spending more by paying an agent, and you would possibly lose a good deal. Even if you try to find the discount commission realtors, you still can’t ignore the fact.
     
  • Imagine if a buyer has to pay 2-3% to their agent in addition to the down payment they make to buy your home when the same buyer has other sellers offering the buyer’s agent commission. You will struggle to sell your home at an expected price in such a scenario.
     
  • If the seller’s agent won't offer the buyer’s agent commission while listing the home online for sale, there are fewer chances that they will show your property to serious buyers.

How much do Realtors charge?

A seller should expect to pay 5-6% of the total home sale price to realtors as commission. Under different circumstances, the rates can be negotiated, depending on your realtor or brokerage firm.

Contract with a real estate agent, underline the offers, payment, timeline, formalities involved in legal paperwork, and other terms and conditions involved for a better seller-agents relationship.

Finding a realtor?

If you are searching for a realtor in Houston TX, contact Jay Thomas Real Estate Team. The team is effortlessly working in finding people their dream homes. Contact us at +1 832-889-5607, or you can email us at jay@buywithjaythomas.com. You can be the next lucky person.

Hello! I'm Jay Thomas, A REALTOR in Houston, Texas. Chances are you and I share a similar passion, Real Estate! I also have a passion for building businesses, working out, inspiring others, technology, sports, and people. Connect with me on Facebook and Instagram!

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