Last Updated: March 2026 | Data Sources: FastExpert Agent Survey (Q1 2025), Clever Real Estate Survey (2025-2026), NAR Member Profile (2025)

Understanding real estate commission rates is crucial whether you're buying or selling a home. Commission fees represent one of the largest transaction costs in real estate, and they vary significantly by state, from as low as 4.66% in New York to as high as 6.15% in Iowa.

Following the landmark NAR settlement in 2024, commission structures have evolved. This comprehensive guide breaks down the average real estate agent commission in every state, explains how commissions work post-settlement, and helps you understand what you'll actually pay when buying or selling a home.

Real Estate Commission Rates by State (2026)

The table below shows the average real estate commission in each state, including the breakdown between buyer's agent and seller's agent fees. Data is compiled from multiple industry surveys conducted in 2025.

States with Highest and Lowest Commission Rates

Commission rates vary significantly across the country. Here's how states compare at both ends of the spectrum:

How Real Estate Commissions Work

Real estate commissions are typically paid as a percentage of the home's final sale price. Here's what you need to know about how these fees are structured and distributed:

The Commission Split

The total commission is usually split between four parties:

1. Listing broker (the brokerage representing the seller)
2. Listing agent (the individual agent working with the seller)
3. Buyer's broker (the brokerage representing the buyer)
4. Buyer's agent (the individual agent working with the buyer)

Agent-Broker Splits

After the commission is divided between buyer and seller sides, each agent shares their portion with their brokerage. Common splits include:

• New agents: 50/50 split (agent keeps 50%)
• Experienced agents: 60/40 to 70/30 split
• Top producers: 80/20 to 90/10 split
• 100% commission brokerages: Agent keeps full commission but pays flat fees

According to the 2025 NAR Member Profile, 88% of REALTORS® work as independent contractors, and the median gross income for agents was $58,100 in 2024.

How the NAR Settlement Changed Commission Structures

The August 2024 National Association of REALTORS® (NAR) settlement brought significant changes to how real estate commissions work in the United States. Here's what changed:

Key Changes from the Settlement

1. No more blanket commission offers on MLS: Listing agents can no longer advertise buyer's agent compensation through the MLS.
2. Mandatory buyer-broker agreements: Buyers must now sign written agreements with their agents before touring homes, specifying the agent's compensation.
3. Increased transparency: Commission rates must be disclosed upfront to all parties.
4. Negotiation is encouraged: Buyers and sellers are more empowered to negotiate agent fees.

Post-Settlement Commission Trends

According to a June 2025 survey by Clever Real Estate:

• Average combined commission increased slightly from 5.32% to 5.44% in the year following the settlement
• Buyer's agent commission dropped to 2.58% in 2024, then rebounded to 2.75% in 2025
• 73% of agents reported buyer compensation negotiation as their top competitive strategy
• 64% of buyers who asked for lower commission rates were successful in negotiating

Commission Rates by Region

Commission rates cluster differently by region, influenced by local market conditions, home values, and competition among agents.

Pacific Region (Lowest Average: 5.01%)

States with higher property values like California, Hawaii, and Washington tend to have lower percentage-based commission rates. Since homes are more expensive, a lower percentage still yields substantial dollar amounts for agents.

• Washington: 4.86%
• California: 5.03%
• Alaska: 5.03%
• Hawaii: 5.03%
• Oregon: 5.10%

Northeast Region (Average: 5.52%)

The Northeast shows diverse rates, from Connecticut's competitive 5.00% to Pennsylvania's 5.81%:

• Connecticut: 5.00%
• New Jersey: 5.17%
• Massachusetts: 5.25%
• New York: 4.66%
• Pennsylvania: 5.81%

Midwest Region (Average: 5.71%)

The Midwest generally has higher commission rates, partly due to lower property values requiring higher percentages for agent viability:

• Minnesota: 6.02%
• Michigan: 5.73%
• Ohio: 5.73%
• Wisconsin: 5.75%
• Iowa: 5.70%

Southwest Region (Average: 5.74%)

The Southwest shows significant variation, with Arizona's competitive market at 5.26% and Oklahoma at 6.12%:

• Arizona: 5.26%
• New Mexico: 5.74%
• Texas: 5.85%
• Oklahoma: 6.12%

Southeast Region (Average: 5.67%)

The Southeast has moderate rates with Tennessee and Alabama at the higher end:

• North Carolina: 5.50%
• Florida: 5.53%
• Virginia: 5.58%
• Tennessee: 5.80%
• Alabama: 5.93%

How to Negotiate Real Estate Commission

Commission rates are always negotiable, they're not set by law or regulation. According to the FastExpert 2025 survey:

• 39.8% of agents are willing to negotiate their commission
• 43.7% say "maybe" based on the situation
• Only 16.5% hold firm to their stated rates

Tips for Negotiating Lower Commission

1. Interview multiple agents: Get commission quotes from 3-5 agents before choosing
2. Leverage your home's appeal: Easy-to-sell homes in hot markets warrant lower rates
3. Bundle services: Offer to use the same agent for buying and selling
4. Consider dual agency: In states where legal, one agent handling both sides may offer a discount
5. Ask about reduced service packages: Some agents offer lower rates with fewer services
6. Time it right: Negotiate before signing the listing agreement

Who Pays Real Estate Commission?

Traditionally, the seller pays the full commission for both the listing agent and buyer's agent. The commission is deducted from the sale proceeds at closing. However, the NAR settlement has created more flexibility:

Current Commission Payment Options

• Seller pays both sides: Still the most common arrangement
• Buyer pays their agent directly: Becoming more common post-settlement
• Split payment: Seller and buyer each pay their own agent
• Negotiated arrangements: Commission rolled into sale price, credits at closing, etc.

Real Estate Agent Statistics

Understanding who real estate agents are can provide context for commission discussions:

Source: 2025 NAR Member Profile

Frequently Asked Questions

How much is real estate commission on a $300,000 house?

At the national average of 5.32%, commission on a $300,000 home totals $15,960. The seller's agent receives about $7,980 (2.66%) and the buyer's agent receives about $7,740 (2.58%). Actual rates vary by state and negotiation.

How much is real estate commission on a $500,000 house?

Commission on a $500,000 home averages $26,600 at 5.32%. That splits roughly $13,300 to the listing agent and $12,900 to the buyer's agent. On higher-priced homes, agents are often willing to negotiate lower percentage rates.

How much is real estate commission on a $1,000,000 house?

Commission on a $1 million home averages $53,200 at 5.32%. Most agents will negotiate a lower rate on luxury properties — commissions of 4-5% are common for million-dollar sales, saving you $13,000-$26,000 compared to the standard rate.

What is the standard real estate commission?

The national average is 5.57%, split between the buyer's agent (2.75%) and seller's agent (2.82%). However, rates vary significantly by state, ranging from 4.66% in New York to 6.12% in Oklahoma.

Is 6% commission still standard?

No, 6% is no longer the industry standard. While some agents still charge 6%, the national average has dropped to 5.57%. Many states now average well below 6%, especially in high-value markets like California (5.03%) and Washington (4.86%).

Can I negotiate real estate commission?

Yes, commission rates are always negotiable. Surveys show that over 80% of agents are open to negotiation, and 64% of clients who ask for lower rates are successful.

Why do commission rates vary by state?

Commission rates vary based on home values (higher-priced markets tend to have lower percentage rates), local competition, cost of living, and regional market conditions. States with lower median home prices often have higher commission percentages to ensure agent viability.

Does the buyer pay commission?

Traditionally, the seller pays the full commission from sale proceeds. However, after the 2024 NAR settlement, buyers may now pay their agent directly in some cases, especially if the seller isn't offering buyer's agent compensation.

How do I find out commission rates in my area?

Interview multiple agents and ask about their commission rates. You can also check local real estate websites, ask for referrals from friends who recently bought or sold, or consult your state's real estate commission.

What services are included in commission?

Full-service commissions typically include: property valuation, MLS listing, professional photography, marketing, showing coordination, offer negotiation, contract preparation, and closing support. Discount services may exclude some of these.

When Do You Pay Real Estate Commission?

Commission payment timing depends on which side of the transaction you're on. Here's a clear breakdown of when money changes hands.

At Closing (Most Common)

In the vast majority of transactions, commission is paid at closing from the sale proceeds. The title company or closing attorney distributes commission payments directly to the brokerages before the seller receives their net proceeds. No upfront payment is required.

Timeline of Commission Events

1. Listing agreement signed: Commission rate is agreed upon between seller and listing agent. No money changes hands yet.
2. Buyer-broker agreement signed: Buyer agrees to their agent's compensation terms (required post-NAR settlement).
3. Offer accepted: Commission terms may be included in the purchase agreement or negotiated as part of the deal.
4. Closing day: Commission is deducted from sale proceeds and distributed. The seller never writes a separate check for commission.

What If the Sale Falls Through?

If a sale doesn't close, no commission is typically owed. Commission is contingent on a successful closing. Exceptions exist for rare "procuring cause" disputes, where an agent may claim they found a ready, willing, and able buyer even if the seller chose not to proceed.

FSBO vs. Agent-Assisted Sales: Is Saving on Commission Worth It?

Some sellers consider For Sale By Owner (FSBO) to avoid paying commission. Here's how the numbers actually compare.

The data shows that sellers who use an agent net more money even after paying commission. This is because agents provide professional pricing, marketing exposure, and negotiation skills that typically result in higher sale prices.

FSBO sellers also face significant challenges. The most common difficulties include pricing correctly (17%), selling within the planned timeline (13%), and handling complex paperwork (10%).

Learn more about the differences in our detailed FSBO statistics guide.

Flat Fee and Discount Brokerage Alternatives

Traditional percentage-based commission isn't the only option. Several alternative commission structures have gained popularity.

Flat Fee MLS Listing

Flat fee MLS services list your home on the MLS for a one-time fee, typically $300 to $3,000. You handle showings, negotiations, and paperwork yourself. This works best for experienced sellers in hot markets where homes sell quickly.

Discount Brokerages

Discount brokerages offer reduced commission rates, typically 1% to 1.5% for the listing side instead of the standard 2.5-3%. Services may be limited. Some offer full service at reduced rates by leveraging technology and higher transaction volume.

Hybrid Models

Some brokerages combine a lower base commission with a la carte services. You might pay 1% for basic listing services, then add professional photography, staging, or open houses for additional fees.

If you're unsure which approach is right for your situation, get matched with a local agent who can explain your options and help you make the best decision for your market.

Cite This Resource

Data Sources & Methodology

The commission data in this guide is compiled from multiple authoritative sources:

• FastExpert Agent Survey (Q1 2025): Survey of 580 registered agents across all 50 states, conducted January-April 2025.
• Clever Real Estate Survey (2025-2026): Comprehensive survey of active agents nationwide with regional breakdowns.
• NAR Member Profile (2025): Annual survey of 1.58 million NAR members covering income, demographics, and business practices.
• Zillow Home Value Index (2025): State median home prices for commission cost estimates.
• U.S. Census Bureau: Housing market statistics and new home sales data.

Commission rates represent averages from survey data. Actual rates may vary based on specific agents, brokerages, property types, and local market conditions. All rates are subject to negotiation.

Frequently Asked Questions About Real Estate Commissions