How Real Estate Agents Get Paid

Real estate agents generally earn a commission based on a percentage of the home sales price and are only paid when a sale is completed. If a deal falls apart or a home buyer or seller walks away before a transaction is closed then the agent earns zero for their efforts.

In a typical real estate transaction, the home seller pays the commission and the rate is negotiable. Sales commissions range from 5 to 7 percent of the sale price and are paid out of the seller’s proceeds at closing. The selling broker typically splits the commission 50-50 with a broker who brings the buyer. Therefore, if the commission rate is 6 percent then each broker will earn 3 percent.

For example, let’s assume that someone is selling a home for $600,000 and they have agreed to pay their listing broker a 6 percent commission. The commission paid by the home seller is $36,000. If a buyer broker and a listing broker are both involved, then each broker will earn $18,000.

When you work with a You Save Real Estate® agent you receive a portion of this compensation in the form of a commission refund. In the example above, a home buyer would receive 20% or $3,600 as cash back or a credit applied to closing costs and a home seller would keep 25% or $4,500 of their equity.

We strive to be your trusted source for low commission real estate agents.