How do real estate agents get paid?

Real estate agents earn commissions — a percentage of the sale price paid at closing. No sale, no pay. This structure aligns the agent's incentive with yours: the higher your sale price (for sellers) or the smoother the deal (for buyers), the better for everyone.

How commissions are structured

The total commission is typically 5–6% of the sale price, agreed upon in the listing agreement between the seller and their agent. Historically, the listing agent shared a portion of that with the buyer's agent — usually half. That structure still exists, but the rules around it changed in 2024.

What changed in 2024

Following the NAR settlement, agents are now required to have a signed buyer representation agreement before showing homes — and buyer agent compensation must be written into that agreement upfront. Sellers can still offer to cover buyer agent compensation as part of the transaction (and most do), but it must be negotiated explicitly.

What to know before signing

• Commission rates are negotiable — there is no legally mandated rate
• Ask what services are included and what you're paying for
• Understand whether the seller is offering buyer-agent compensation and for how much
• Buyer representation agreements often have exclusivity terms — understand the duration and exit clause