As real estate sales continue to grow, so do the number of questions about how much is the typical commission rate. In this article, we’ll take a look at the history and current state of real estate commissions, as well as how home sellers can reduce or eliminate their broker fees when selling their property.

For decades, detractors have predicted the death of real estate commissions—the fees paid to brokers and agents for their services. But despite their best efforts, these fees have proven surprisingly resilient. Even splashy disruptors such as YourHomeDirect and Foxtons have failed to reshape the industry or significantly cut real estate commission rates.

Historically, real estate commissions have ranged from 3-6% of the final sale price of a home, though they may be lower or higher depending on local market conditions. Typically, the seller pays these fees—though buyers sometimes negotiate to pay them directly, or factor them into the asking price of the home. Read more

In fact, it’s possible to save on the standard 6% fee by choosing a flat-fee MLS listing service such as Hauseit. But how exactly do these low-commission real estate companies operate and compare to traditional brokerages?

Real estate commissions are always negotiable—otherwise real estate agents would be violating federal antitrust laws. Generally speaking, the average agent commission is around 5% nowadays. However, since the fee is a percentage of the final sale price, the exact amount won’t be known until an offer is accepted and a home sells.

Most real estate agents work for a large national or regional broker, and the share of the commission they get depends on the brokerage. National brokerages such as Keller Williams, for example, pay their agents 64% of the share of commission on a sale, with the remaining 30% going to the broker’s market center (or local office).

As for smaller firms and independent real estate agents, they usually split the commission evenly with the buyer and seller’s agents. However, some brokers may choose to charge a higher buyer’s agent commission to offset costs such as advertising and sign rentals.

When it comes to New York City, real estate commissions vary across the city and neighborhoods. Generally, the typical broker and agent commission on a sale is 3%, but can be as high as 6% in Manhattan and Brooklyn.

As a home seller, you should always try to negotiate the best possible commission rate. That’s especially important when you’re selling your primary residence, which is one of the biggest financial transactions that most people will make in their lifetime. But the good news is that you can eliminate or significantly reduce your broker fees by listing your home FSBO through Hauseit’s NYC flat-fee MLS. Click here to learn how much you can save on traditional NYC broker fees when you sell your home. And don’t forget to estimate your other closing costs using Hauseit’s interactive closing cost calculator for sellers. Then you can focus on finding the right buyer for your property!