Seller's Guide to Real Estate Commission

By Home Bay

Posted on November 28th, 2018

Many people are surprised to learn that real estate agents commission rates are not regulated. In fact, they’re 100% negotiable, no matter what state you’re in. If selling your home, you’ll likely want to hire a real estate agent to handle the process, which can be daunting. The real estate brokerage commission rate is not “set” and home sellers don’t have to pay a specific percentage of the sales price to the agent in order to get their services.

Seller's Guide to Real Estate Commission

Fact #1: You pay whatever you and the agent agree to, but don’t expect much of a discount off the standard rates (keep reading).

Fact #2: With Home Bay’s flat fee, you’ll pay far less than you’d pay an agent. More on that later.

Okay, now that we’ve gotten that off our chest, let’s start with some simple definitions: A listing agent is a real estate professional who helps homeowners sell their home. A buyer’s agent is a real estate professional who helps home shoppers find and purchase a home. Agents can choose to focus on buyers or sellers or represent both (known as a dual agency). Home Bay’s licensed agents represent both sellers and buyers.

What are Typical Real Estate Agent Commission Rates?

First, let’s start with the history of these rates, which dates back to the establishment of the National Association of Realtors (NAR). The idea of a recommended 6% commission began in the 1940s, becoming more common until it was eventually the standard by the 1950s. Whereas other commission-based industries have evolved over time to favor the consumer, like wealth management and medical insurance, real estate has not changed in nearly 80 years!

Latest trends show that real estate commission ranges from 5%–6% of the home’s final sale price. In most cases, 2.5%–3% goes to the buyer’s agent and 2.5%–3% goes to the seller’s agent.

Who Pays for What?

The seller typically takes on all the agent fees in a real estate transaction. As to what the amounts are, there are two common circumstances and one not so common.

  1. If both the buyer and seller use an agent: The seller pays a commission for both the listing agent and the buyer’s agent. (As noted above: 2.5%–3% to each for a total of 5%–6%)

  2. If one party uses an agent and the other doesn’t: If the buyer uses an agent and the seller does not, the seller is still expected (though not required) to pay the buyer’s agent. If a seller uses an agent and the buyer doesn’t, typically the listing agreement between the listing agent and the seller states that the listing agent gets both commissions, i.e., double payment, the full fix to six percent.

  3. If neither the buyer or seller use an agent: The seller doesn’t have to pay anything, but considering that 88% of buyers use an agent, this agent-free scenario is extremely rare.

Can You Negotiate Commission Rates?

Yes. Almost everything in a real estate transaction is negotiable– even that retro shag carpet or the broken furnace in your next “dream home”. However, don’t expect the agent to dip much lower than standard rates.

When negotiating commission rates with your agent, agree on a rate that you and the agent decide is fair.

Some agents have more flexibility than others to negotiate their commission. For example, if the agent is part of a brokerage that takes a percentage of every commission, the agent may be less willing or able to negotiate.

Because most traditional agents generate their income from 100% commissions instead of salaries, they’ve grown accustomed to this old model and may be unwilling to give up the commission.

Do You Have to Use an Agent?

No. Nearly 30% of all sellers are now opting to sell their own homes either completely on their own or with limited services of a real estate agent, such as entry of the listing on to the MLS. This trend is in part due to technological advances that have opened up access to services previously unavailable to home sellers. This option has also become popular because there are big financial benefits associated with selling your own home.

With that said, most sellers who successfully sell their home for sale by owner (FSBO), have experience with the many nuts and bolts of the real estate process.

For sellers who don’t want to sell their home FSBO without any outside help and for those uncomfortable handing over a large chunk of their home equity in real estate commissions to an agent, Home Bay is the ideal option.

With Home Bay’s low, flat fee, sellers will enjoy the same benefits of using a traditional real estate agent, while saving tens of thousands of dollars. Here are some reasons why you should sell your home with Home Bay:

  • Save thousands of dollars without sacrificing quality
  • Professional photography included in the flat fee
  • Licensed agents and Customer Success Agents available to help you when you need it
  • You maintain control of the process – Our expert team is always available to offer guidance, but you decide how much help you want.
  • Premium Marketing- Home Bay advertises your home on Zillow, Trulia, Redfin,, MLS, and the other major sites searched by buyers.

Read this article for more details on why you should sell your home using Home Bay vs. a traditional real estate agent.


Bottom line, whatever approach you take to sell your home is your decision. You’re not required to use an agent, but if you do, the commission is sometimes negotiable. As a seller, it’s important to research agents and ask the right questions before signing a contract.

And if you’re wondering, after reading this article, “Why wouldn’t I use Home Bay to sell my home if I can save thousands without sacrificing quality of service?”–we’re wondering the same thing.

Calculate how much you’ll save when you use Home Bay.

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Posted in Costs