Real Estate Agent Commission Explained: What Buyers and Sellers Pay in 2026

Real estate commissions have been the most confusing — and most argued about — part of buying or selling a home for decades. The NAR settlement that took effect in August 2024 changed the rules, but a year and a half later, most buyers and sellers still don’t fully understand what they’re paying, who they’re paying, or whether they can negotiate. Here’s how commissions actually work in 2026, with real numbers.

What Changed After the NAR Settlement

Before August 2024, the seller’s agent typically listed a commission split on the MLS — something like “2.5% to buyer’s agent.” The seller paid both sides, usually 5–6% total, and the buyer’s agent commission was baked into the sale price. Buyers rarely thought about it because they never wrote a check for it directly.

The settlement changed three things:

• Buyer agent compensation can no longer be advertised on the MLS.
• Buyers must sign a written agreement with their agent before touring homes, specifying what the agent will be paid.
• Sellers can still offer to pay the buyer’s agent, but it happens off-MLS — through agent-to-agent communication, listing websites, or at the negotiation table.

The practical effect? Commissions didn’t drop as much as consumer advocates predicted. The national average commission fell from about 5.4% in early 2024 to roughly 5.0–5.2% by late 2025. Buyer agent commissions specifically dropped from an average of 2.6% to around 2.3–2.5%. Not nothing, but not the revolution some expected.

Typical Commission Rates in 2026

Here’s what you’ll see in most markets right now:

• Listing agent (seller’s side): 2.5–3.0% of the sale price
• Buyer’s agent: 2.0–2.5% of the sale price
• Total: 4.5–5.5% combined

On a $400,000 home, that’s $18,000–$22,000 in total commissions. On a $600,000 home, it’s $27,000–$33,000. These are big numbers, and they come straight out of the seller’s equity (or, more accurately, they’re factored into the price the buyer pays).

Rates vary by market. In expensive metros like San Francisco and New York, total commissions tend to run lower (4.0–4.5%) because the dollar amounts are already enormous. In smaller markets with $200,000–$300,000 homes, agents are less likely to discount because their per-transaction income is already tight. Our home selling guide includes a breakdown of typical costs in different price ranges.

Who Actually Pays What

Technically, the seller pays the listing agent’s commission out of the sale proceeds. The buyer’s agent commission is now negotiable and can be paid by:

• The seller (still the most common arrangement — about 70% of transactions in 2025)
• The buyer directly
• A split between buyer and seller
• The buyer’s agent themselves taking a reduced fee

Here’s the catch for buyers: if you agree to pay your agent 2.5% and the seller is offering 2.0%, you’re on the hook for the 0.5% difference. On a $400,000 home, that’s $2,000 out of pocket — on top of your down payment and closing costs. This is new territory for a lot of buyers, and it pays to understand the math before you sign a buyer agreement.

Negotiating Commission: What’s Realistic

Yes, you can negotiate. You always could. Here’s what I’ve seen work:

For sellers: The easiest negotiation is when you’re both buying and selling with the same agent or brokerage. Ask for a reduced listing commission (1.5–2.0%) in exchange for giving them both transactions. Some agents will do this, especially in higher price ranges.

You can also negotiate a tiered commission: 2.5% on the first $400,000, 1.5% on anything above that. This works well on homes priced above $600,000 where the agent’s total payout is already substantial.

For buyers: Under the new rules, you sign an agreement specifying your agent’s fee before you start touring. Some buyer’s agents are willing to work for a flat fee ($5,000–$7,500) or a reduced percentage (1.5–2.0%), especially if you’ve already identified homes you want to see and don’t need hand-holding.

Don’t try to negotiate with an agent who hasn’t shown you a home yet, though. That conversation goes better after they’ve demonstrated value. Our home buying guide has more on selecting and working with a buyer’s agent.

Discount Brokerages and Flat-Fee MLS

If you want to save on the listing side, you’ve got options:

Flat-fee MLS services charge $200–$500 to list your home on the MLS without a full-service agent. You handle showings, negotiations, and paperwork yourself. The listing shows up on Zillow, Realtor.com, and everywhere else — just like any other listing. Our flat-fee MLS guide explains exactly how this works and what you give up compared to full service.

Discount brokerages like Redfin charge listing commissions of 1.0–1.5% (Redfin’s current rate is 1.5% for most markets, or 1.0% if you also buy with them). You get a real agent, but with less personal attention — Redfin agents handle 3–4x the transaction volume of traditional agents.

Hybrid models charge a flat fee ($3,000–$5,000) plus a small percentage (0.5–1.0%). These are growing fast in markets like Texas, Florida, and Arizona. They work best for sellers who are comfortable doing some of the marketing legwork themselves.

The FSBO Calculation

Selling without any agent — full FSBO — saves you the listing commission entirely. On a $400,000 home at 2.5%, that’s $10,000. You might still offer to pay a buyer’s agent (2.0–2.5%), but your total commission drops to roughly half of a traditional sale.

The trade-off is real, though. NAR data consistently shows FSBO homes sell for 10–23% less than agent-assisted sales. Even at the low end, a 10% discount on $400,000 is $40,000 — far more than the $10,000 you saved on commission. Some of that gap is explained by the types of properties sold FSBO (more rural, lower price points), but not all of it.

FSBO makes the most financial sense when you already have a buyer (a friend, neighbor, or family member), when the market is extremely hot and homes sell themselves, or when you’ve sold multiple homes before and know the process cold. For everyone else, the FSBO guide is worth reading carefully before you commit.

When Paying Full Commission Makes Sense

I know this sounds like an agent talking, but there are situations where the full 5–5.5% is worth every dollar:

• You’re relocating and can’t manage showings. A full-service agent handles everything while you’re 1,200 miles away.
• The home needs creative marketing. Unusual properties — historic homes, rural land, luxury estates — need an agent with a specific buyer network and marketing budget.
• You’re in a tough market. When inventory is high and buyers have choices, a skilled agent’s pricing strategy and negotiation skills can be worth more than their fee.
• It’s a legal minefield. Divorce sales, probate properties, homes with title issues, or properties with unpermitted work all benefit from an agent (and attorney) who knows the pitfalls.

Finding the right agent is the key variable. A mediocre agent at 2.5% is worse than a great agent at 3%. Browse our agent directory to compare local options, read reviews, and see transaction histories.

Commission on New Construction

Buying from a builder? The commission structure is different. Most builders have traditionally offered 2–3% to buyer’s agents and factored it into the base price. Post-settlement, some builders have reduced or eliminated buyer agent compensation, reasoning that buyers will find their developments anyway through advertising.

If you’re buying new construction without an agent, don’t assume the builder will knock 2–3% off the price. They usually won’t — that money goes back to the builder’s marketing budget. But you may be able to negotiate $5,000–$15,000 in upgrades, closing cost credits, or rate buydowns instead. Always ask.

If you do use a buyer’s agent for new construction, register them on your first visit. Most builders won’t pay agent commissions if the agent shows up after you’ve already been to the sales office.

Where This Is All Heading

Commission rates will probably continue to drift lower — slowly. The DOJ is still watching the industry, and new models keep entering the market. Within five years, I’d expect the national average to settle around 4.0–4.5% total, with a wider range between discount and full-service options.

For now, the best move for both buyers and sellers is the same one it’s always been: understand exactly what you’re paying, what you’re getting for it, and shop around. Commissions aren’t fixed. They never were. The NAR settlement just made that a little more obvious.

Start with our seller’s guide or buyer’s guide for a full walkthrough of costs, timelines, and decisions at every stage of the transaction.