Yes, real estate agents almost always split the commission, and they split it twice. The fee the seller agrees to pay is first divided between the listing brokerage and the buyer’s brokerage, then divided again between each brokerage and the individual agent who did the work. On a $400,000 sale at the current national average of about 5.70 percent, the seller pays $22,800 in commission, but by the time that money passes through two firms and two agents, no single person pockets anything close to the full amount.
How the Total Commission Gets Set
The percentage is locked in through a written listing agreement between the seller and the listing brokerage.1National Association of REALTORS®. Consumer Guide: Listing Agreements No agency or trade group sets a standard rate, and competing brokerages agreeing to one would be price-fixing under federal antitrust law.2Office of the Law Revision Counsel. 15 U.S. Code 1 – Trusts, Etc., in Restraint of Trade Illegal; Penalty Total rates commonly land between 5 and 6 percent of the sale price. As of early 2026, the national average sits around 5.70 percent, split roughly 2.88 percent to the listing side and 2.82 percent to the buyer’s side.
The First Split: Listing Brokerage and Buyer’s Brokerage
The first division happens between the two firms. The listing brokerage earns its share for marketing the home and representing the seller. The buyer’s brokerage earns its share for finding the buyer and guiding them through inspections, negotiations, and closing. A rough 50/50 is common, so on a $22,800 commission each firm would receive about $11,400.
The money moves at settlement. The escrow company or closing attorney disburses the commission directly from the seller’s proceeds, cutting separate checks to each brokerage based on the closing instructions.3Consumer Financial Protection Bureau. Appendix A to Part 1024 – Instructions for Completing HUD-1 and HUD-1a Settlement Statements The checks go to the firms, not the individual agents. The agents are paid afterward, once the brokerage takes its cut.
A 50/50 split between brokerages isn’t guaranteed. The listing brokerage decides what portion to offer the buyer’s side, and that offer rises or falls with local conditions. In slower markets, a listing brokerage might offer a larger share to pull buyer’s agents in. In a competitive seller’s market, the buyer’s side might see less.
What the 2024 NAR Settlement Changed About Who Pays the Buyer’s Agent
How the buyer’s agent gets paid shifted on August 17, 2024, when practice changes from a settlement involving the National Association of Realtors took effect.4National Association of REALTORS®. National Association of Realtors Provides Final Reminder of August 17 NAR Practice Change Implementation Before the settlement, listing brokerages routinely posted their compensation offers to the buyer’s side on the Multiple Listing Service, so any buyer’s agent could see exactly what they’d earn on a given property. Offers of compensation can no longer appear on any MLS.5National Association of REALTORS®. Compensation, Commission and Concessions
Buyers also now have to sign a written agreement with their agent before touring any home, in person or virtually. That agreement must state the agent’s compensation as a concrete number or rate, not an open-ended reference to whatever the seller might offer, and it must include a statement that commissions are fully negotiable and not set by law.6National Association of REALTORS®. What the NAR Settlement Means for Home Buyers and Sellers
Sellers can still choose to pay the buyer’s agent, but any such offer now moves through a separate broker-to-broker agreement rather than a blanket MLS posting.5National Association of REALTORS®. Compensation, Commission and Concessions If the seller doesn’t offer anything, the buyer pays their own agent directly through whatever structure they negotiated, whether a flat fee, an hourly rate, or a percentage. Some buyers fold the cost into a request for seller concessions during negotiations. The old assumption that the seller always covers both sides no longer holds.
The Second Split: Agent and Brokerage
Once a brokerage receives its share, the agent who actually did the work gets paid out of it. The agent’s cut depends on their contract with the brokerage, and the range is wide. New agents often start at 50/50, meaning the firm keeps half of every dollar. Experienced agents with a steady record negotiate better terms and commonly land at 60/40 or 70/30 in their favor.
This arrangement works the way it does because agents aren’t typical employees. Federal tax law treats licensed real estate agents as statutory non-employees as long as their pay is tied to sales rather than hours and they operate under a written contract stating they won’t be treated as employees.7Office of the Law Revision Counsel. 26 U.S. Code 3508 – Treatment of Real Estate Agents and Direct Sellers The brokerage supplies the legal umbrella: errors and omissions insurance, compliance oversight, technology, and office support.8National Association of REALTORS®. NAR Issue Brief: Real Estate Professionals Classification as Independent Contractors The firm’s cut pays for all of that.
Put numbers on it. If an agent is on a 70/30 split and the brokerage receives $11,400 from a closing, the agent takes home $7,980 and the brokerage keeps $3,420. The agent then pays self-employment taxes, health insurance, car expenses, marketing, and continuing education out of that $7,980.
Cap and Desk Fee Variations
Some brokerages use a cap system. The percentage split applies only until the agent has paid a set dollar amount to the firm within a calendar year. After the cap, the agent keeps 100 percent of each additional commission, minus a small per-transaction fee. The model rewards agents who close enough deals to blow past the cap early.
Other brokerages skip the percentage split entirely and charge a flat monthly desk fee or a per-transaction fee of a few hundred dollars per closing. Agents keep 100 percent of each commission but cover the firm’s overhead through those fixed charges. Percentage splits cost more on big deals but nothing in slow months; flat fees leave more on high-value transactions but still come due in a dry stretch.
Referral Fees Take Another Cut
Before the agent’s split is even calculated, a referral fee may come off the top. When one agent refers a client to another, the receiving brokerage pays the referring brokerage a cut. Referral fees typically run around 25 percent of the receiving side’s commission, with a usual range of 20 to 35 percent and sometimes more when the lead comes from an online lead-generation company.9Consumer Federation of America. Real Estate Referral Fees: Do They Harm Consumers?
Running the full math: the brokerage receives $11,400, a 25 percent referral fee pulls out $2,850, leaving $8,550. On a 70/30 split, the agent then receives $5,985. Against the $22,800 the seller originally paid, the agent who showed homes, wrote the contract, and managed the closing took home about 26 cents on the commission dollar.
When One Brokerage Keeps the Whole Fee
If a single brokerage represents both the buyer and the seller in the same transaction, the firm collects the entire commission with no outside split. The arrangement, called dual agency, is the most profitable scenario for a brokerage, and the post-settlement environment may be making it more common. A buyer who can’t afford to pay their own agent separately might work directly with the listing agent, who then represents both sides.
Dual agency is legal in most states but has real drawbacks. The agent owes duties to both parties even though their interests directly conflict, and in practice the agent becomes a transaction facilitator rather than an advocate for either side. Several states restrict or ban it outright. A buyer working directly with the listing agent should understand that the agent’s financial incentive aligns with closing at the highest possible price, which is the seller’s goal.
Rebates and Flat-Fee Alternatives
In most of the country a buyer’s agent can rebate part of their commission back to the buyer at closing. Federal law does not prohibit the practice; RESPA Section 8 allows settlement service providers to give consumers discounts or refunds.10Consumer Financial Protection Bureau. Real Estate Settlement Procedures Act FAQs Roughly ten states prohibit or restrict the practice. If you’re buying in a state that allows rebates, it’s a legitimate negotiation point, especially if you found the property yourself.
Flat-fee listing services take a different approach on the seller side, charging a predetermined amount, often between $100 and $1,000, to place the property on the MLS. The seller handles photos, showings, negotiations, and paperwork. The savings can be thousands of dollars, but the seller carries the risk if anything goes wrong with disclosures or contract terms. Some full-service brokerages have also started offering reduced commission rates or flat-fee packages that still include traditional agent support. Whatever model is used, the buyer’s agent still expects to be paid, either from the seller’s side or directly from the buyer.