Real estate commission is a fee that home sellers and buyers pay to real estate
agents to represent them in a property sale or purchase. The amount is a
percentage of the final sales price of the property and varies from market to market.
Nationally, commissions typically range from 5% to 6% of the final sales price of the
property.
The total sales price of a property yields a commission payment that is split between
the selling agent and the buyer’s agent. The specific terms of how the seller’s and
buyer’s agents are compensated are outlined in the listing agreement, a legal
document that home sellers sign when they hire their real estate agent.
The listing agent’s portion of the commission is typically 2.5% to 3% of the final sales
price. The buyer’s agent’s portion of the commission is typically 2% of the final sales
price. In addition, both the seller’s and buyer’s agents will give a portion of their
commission back to their sponsoring broker. This amount can be 5%-20% of the
commission earned depending on the size of the brokerage and the terms of their
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So how much is real estate commission in New York? In the New York City
metropolitan area, commission rates are generally in the 4%-6% range. The average
real estate commission paid by a home seller in NYC is 4.66% of the final sales price
of the property.
Why Do Sellers Offer Realtor Commission?
Sellers often offer to pay the buyer’s agent commission because it allows them to
reach a larger pool of potential buyers. In addition, it incentivizes buyers to work
with a listing agent who can get them the best deal on a home.
Buyers may also offer to pay a commission to their own agent in order to secure
representation. This is usually a smaller portion of the final sales price than the
seller’s agent commission and can be as low as 1%.
How Do Sellers Save on Commission?
There are a number of ways that home sellers and buyers can save on real estate
commission in New York. Some of the most popular options include using a flat-fee
listing agent and paying only a fraction of the commission at closing. Other popular
options include using an online marketplace that offers a reduced commission rate
and working with a company like Hauseit that helps home sellers calculate their
closing costs.
