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A Realtor’s salary can significantly fluctuate based on location and experience. If you’re just starting, you may rely on the real estate agent fee when your client buys or sells a home. Like other sales jobs, you’re relying on a cut of the profits. So, what are the average real estate commission rates in the U.S.? Here’s what you need to know.
What Is Real Estate Commission?
Imagine you’ve lived in your home for 10 years and are ready to sell. You hire a real estate agent, and they help the entire process. Once the buyer has closed, you can take the money and buy a new property or find another use for it. Regardless, you’ll have to pay commission to your real estate professional because of their labor.
For example, your sold house garnered $300,000 in profit for you. If your Realtor charges a 4% commission, they’ll get $12,000 of the cut. While the average real estate commission rates may vary, some agents take a different approach. Instead of commission, they charge a flat fee for their services. This strategy could be beneficial if real estate agents provide fewer services and simplify things for the client.
What States Have the Highest Average Real Estate Commission?
The U.S. has 50 states and territories, so it’s unlikely to find similar rates from one to the next. Where can you find the best commission rates? The Real Estate Commission Survey of 2024 indicated these states made the top 10:
| State | Total commission |
| 1. Michigan | 5.86% |
| 2. Wisconsin | 5.78% |
| 3. Minnesota | 5.77% |
| 4. Texas | 5.76% |
| 5. Missouri | 5.73% |
| T-6. New Mexico | 5.68% |
| T-6. Oklahoma | 5.68% |
| 8. Georgia | 5.62% |
| 9. Ohio | 5.60% |
| 10. Tennessee | 5.54% |
The Midwest leads the country in commission rates, with Michigan, Wisconsin and Minnesota up front. These states typically have lower housing costs than coastal regions, so real estate agents make up for it with a higher cut of the selling price. Other reasons for the raised percentages could be local regulations, red tape or traditionally high rates.
While these states require a bigger cut, incoming changes could affect how much a Realtor’s commission is. In 2024, the National Association of Realtors (NAR) announced a deal where homeowners don’t have to compensate the commission for the buyer agent — instead, they only pay the selling agent. Therefore, commission rates could be halved in the future.
What States Have the Lowest Average Real Estate Commission Rates?
While the Midwest and Southern states have high commission rates, the same can’t be said for the rest of the country. Who charges the lowest percentage of sell prices? Here are the bottom states:
| State | Total commission |
| T-41. Oregon | 5.04% |
| T-41. Washington | 5.04% |
| 43. Oregon | 5.00% |
| 44. California | 4.99% |
| 45. Washington, D.C. | 4.82% |
| 46. Utah | 4.68% |
| 47. Montana | 4.68% |
| 48. Idaho | 4.68% |
| 49. Wyoming | 4.68% |
| 50. Massachusetts | 4.47% |
| 51. Nevada | 3.51% |
Nevada has the lowest average total commission rate in the U.S. by nearly a whole percentage point. While rates were lower before, they could sink even more. In reaction to the NAR’s new rules, some Realtors are reducing rates to 0% with specific requirements. Las Vegas is the epicenter of Nevada real estate, but the rest of the state sees less activity.
While Nevada has a low overall commission rate, it’s far from an outlier in the region. From California to Alaska and Hawaii, the western states are not famous for large slices of the real estate pie. Each city and state has different nuances, although competition matters in places like California. The Golden State has a competitive real estate market, so agents may have lower rates to draw in clients.
How Can You Navigate the Higher Commissions?
Picture homeowners selling their houses in states with high average real estate commission rates. Even with the NAR’s recent decision, they may want to save some of the profits and pay a lower percentage to the Realtor. How can they save money? The trick is to negotiate and get the rates down. While it may be intimidating, it’s a helpful tactic if you have leverage.
When can you negotiate with the real estate agent? It starts with your value as a client. If you have a property in a rising market, you may have numerous Realtors wanting your services. From there, you can talk the agent into a lower rate and recuperate more of the profits. Another part of your negotiation process should be market timing. If it favors sellers, your Realtor may be willing to accept a lower rate.
How Agents Determine Their Commission Rates
Commission for the buyer and seller depends on how much work the agent does. If they handle most or all of your process, you may have to fork over a higher percentage. However, a hands-off approach leads could lead to lower rates, especially if they’re newer to the industry. Here are a few factors affecting the commission rates:
- Listing: The seller’s duties start with the marketing process. They’ll likely list your home on Multiple Listing Services (MLS) websites, flyers and social media.
- Staging: When buyers start lining up, the Realtor will take over staging. The average real estate commission could increase if they go the extra mile with cleaning, decluttering and updating the living spaces.
- Photography: How much a Realtor’s commission is could also depend on photography services. If they outsource this task, they may ask for a larger cut of the selling price.
- Paperwork: In real estate, expect to have your hands full with paperwork. The selling agent can assist homeowners with the red tape needed for local and state requirements.
- Connections: Before you sell your home, communicating with appraisers and inspectors is essential. Your real estate agent can make the process easier through their connection.
Understanding the Average Real Estate Commission Rates Nationwide
Selling a house can be an exciting time once you find a new place to live. The process has numerous layers to navigate, including the seller’s commission rates. Variance is high nationwide, so it boils down to the dynamics of your local real estate market. While these rates are high in Michigan, you may pay lower fees in coastal states like Massachusetts.
About The Author
Evelyn is the founder and editor-in-chief of Renovated with over 5 years of experience immersed in researching and writing on interior design, construction, and renovation. She is a passionate advocate for improving mental health and safety in the construction industry. When she's not writing, you can find her reading at coffee shops in Lancaster.
Her insights have resonated far beyond Renovated, gracing publications like the National Association of Realtors, Construction Executive, Fieldwire, DecorMatters, and Renewable Energy Magazine.
For more sharp takes on design, construction, and everything in between, you can follow Evelyn on Twitter at @renovatedmag.
