Commission
The fee paid to a real estate brokerage for their work on a deal. Historically a percentage of the sale price. Recent legal changes are shifting how it gets negotiated and paid.
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Free to set up. No credit card.Part 1 of 4
Why a seller cares
The commission is the largest cost of most sales, and since 2024 it is negotiated on both sides rather than assumed. What you pay your own agent is in the listing agreement; what you pay the buyer's is in the offer.
Part 2 of 4
A simple example
A $300,000 sale. Your listing agreement sets 2.5% for your agent, and the buyer's offer asks for 2.5% toward theirs.
| The piece | Where it is set, and roughly what |
|---|---|
| Your agent's fee | The listing agreement; $7,500 at 2.5% |
| The buyer's agent's fee | The offer; $7,500 if you agree to 2.5% |
| Neither, in a FSBO sale to an unrepresented buyer | Nothing |
Two fees, two documents, both negotiable before they are signed.
Part 3 of 4
What people get wrong
That six percent is the rate. There is no rate; there is what you agree to, on each side, in writing.
Part 4 of 4 · where to read next
Where it appears in the sale
What a definition is, and what it isn't
Keighbor is a software company, not a law firm, brokerage, or tax adviser. This is general information, not legal, tax, financial, or real estate advice about your sale. Your situation may differ. Before acting on a contract, disclosure, title, tax, or pricing question, ask an appropriately licensed professional in your state.
Written and researched by Keighbor Research · drawn from the reference glossary · how we research and check what we publish
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