Historically the US average was around 5-6% split between the listing agent and buyer's agent. Following the National Association of Realtors (NAR) settlement in 2024, buyer-agent compensation is no longer required to be offered through the MLS, potentially leading to more varied fee structures. As of late 2024, total commissions have been trending toward 5-5.5% in competitive markets, though rates remain negotiable and vary significantly by region.

In a traditional sale, the total commission is split between the listing brokerage and the buyer's brokerage (often 50/50, though negotiable). Each agent then keeps a portion of their brokerage's share - a new agent might keep 50-60%, while a senior agent might keep 80-90% depending on their split agreement. This calculator defaults to a 50/50 brokerage split and 70% agent retention - adjust both to match your actual agreement.

The commission is technically paid by the seller from the home sale proceeds at closing. However, the economics are reflected in the home's sale price, so buyers indirectly contribute. After the 2024 NAR settlement, buyers may need to pay their buyer's agent separately if the seller doesn't offer buyer-agent compensation - making it important for both buyers and sellers to understand fee structures upfront.

Yes. Commission rates are always negotiable and have never been legally fixed. The 2024 NAR settlement reinforced this by requiring brokerages to make individual compensation agreements with clients rather than relying on blanket MLS co-broking offers. When interviewing agents, ask directly about their rate, what services are included, and whether they will negotiate. Full-service agents who price homes accurately and market aggressively often justify higher rates through faster sales and higher net prices.

Commission is subtracted from gross sale proceeds along with transfer taxes, title fees, and any seller concessions. If you sell at $500,000 with a 5.5% total commission, you pay $27,500 in commission alone before other closing costs. Use the result here as an input to a seller's net sheet alongside title insurance, prorated taxes, and any outstanding mortgage balance to estimate actual cash-in-hand.

Dual agency occurs when the same agent (or brokerage) represents both the buyer and seller in the same transaction. Because only one side is serving both parties, the total commission is typically reduced (e.g., listing agent keeps the full commission rather than splitting with a buyer's agent). Dual agency is legal in most US states with full disclosure but carries a conflict-of-interest risk since the agent cannot fully advocate for both sides simultaneously.