How Real Estate Agents Get Paid in 2025: Commission Breakdown for Buyers and Sellers

When you work with a real estate agent in 2025, you’re typically paying them through a commission based on the final sale price of the home. Commission rates averaged 5-6% for years, and recent changes in the industry now make the process more open and direct for both buyers and sellers. Buyers and sellers each negotiate their agent’s fee, and written agreements state exactly what you’re paying for. New rules make sure everyone is clear on costs, services, and who pays what right from the start.

Agents earn their income from these commissions—no salary, just a share of the sale. With recent rule changes, you now have more control and better insight into real estate fees. This new transparency builds trust and helps everyone make confident, informed choices about how to pay for professional help when making one of life’s biggest investments.

How Real Estate Agent Commissions Work

When you’re ready to buy or sell a home, understanding agent commissions helps you plan for the real costs and negotiate better. Commissions are how nearly all agents earn a living, paid as a slice of the final sale price. This keeps agents focused on selling homes, not chasing hourly pay. Let’s break down how commissions are set, who writes the check, and what’s changed now that buyers and sellers have more say in what they pay.

The Traditional Commission Structure

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For decades, a 5% to 6% commission on the home sale price has been standard across most of the U.S. This commission is not a flat fee—it flexes with the price of the property. Traditionally, the seller pays this fee out of their proceeds at closing. Here’s a quick breakdown:

• The commission is taken from the home sale, so sellers don’t pay cash up front.
• This fee is usually split evenly between the listing agent (who markets the home) and the buyer’s agent (who brings the buyer).
• Each agent’s brokerage receives the payment first and then pays the agent their share.

For example, on a $400,000 sale at 6%, the total commission is $24,000. That’s $12,000 to the listing side and $12,000 to the buying side. Of that, each agent typically keeps about half after their brokerage cut. Recent data shows the average commission in 2025 is around 5.4%—that’s shifting, but the structure is much the same as it’s been for years. For exact national averages and fee breakdowns, check the commission breakdown statistics at Real Estate Witch.

New Rules and Negotiation Trends (Post-2024)

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The industry shifted in 2024 following lawsuits and new National Association of Realtors (NAR) settlements. Now, commission agreements have to be transparent and upfront, and buyers can’t assume sellers will always foot the bill. Here’s how the new normal looks:

• Buyers and sellers each negotiate their agent’s commission separately, not as one “bundle.”
• Sellers are no longer required to offer payment to a buyer’s agent. That means buyers may need to pay their agent directly—or negotiate credits or help from the seller.
• All commission details must be spelled out in writing before a home search begins or a listing goes live.

Buyers can now hire agents using direct payment, hourly fees, or flat-fee agreements. This opens the door for more negotiation—think of it as ordering à la carte instead of prix fixe. Agents explain what services they include, and clients pick what matters most. Learn more about how the rules have changed and what it means for negotiations by visiting Bankrate’s summary on new real estate commission rules.

How and When Agents Receive Payment

Real estate agents only get paid when a deal closes. If the sale falls through at any point, no commission is owed—no sale, no pay. Here’s how it typically works:

1. Once the sale is final, the closing officer handles the funds.
2. The brokerage—that’s the company the agent works for—receives the commission.
3. The brokerage pays the agent according to their agreement, which could be a 50/50 split or a different arrangement.

If a buyer or seller backs out before closing, agents almost never get paid for their time, showings, or marketing costs. This “all or nothing” system keeps agents invested in seeing the deal through. Commission payments are usually processed within a few days of closing. For more info on what to expect, see the impact of recent commission changes from First Citizens.

This new system gives both buyers and sellers more power to discuss fee structure, demand transparency, and understand exactly when and how agents earn their commission.

Commission Splits: Agent and Brokerage Arrangements

Agents rarely keep 100% of the commission they earn from a sale. Instead, a portion of each check goes to their brokerage — the company that provides resources, office space, tech support, and compliance. This agreement is called a commission split, and it can make a big difference in an agent's paycheck. Let’s see how these splits work and how an agent’s experience can change their take-home pay over time.

Common Split Arrangements: Percentages and Caps

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Most real estate agents split their commission with a brokerage. The percentage can vary, but these are the most popular arrangements across the country:

• 50/50 split: The agent and the brokerage each get half the earned commission. This is standard for new agents since they need more training and leads.
• 70/30 or 80/20 split: Higher splits like 70% or 80% to the agent grow in popularity as agents gain skills or move to brokerages with fewer overhead costs. Many franchise brokerages, such as Keller Williams, commonly use a 70/30 split. For a deeper comparison of common split ratios, see this review of top commission split models.
• Caps: Some companies offer a cap system. Agents keep splitting with the brokerage until hitting a set dollar threshold for the year (the “cap”). After reaching it, agents keep 100% of their commission for the rest of that year. This rewards productive agents who close many deals. Learn more about how cap systems work at Keller Williams.
• Flat-Fee Models: A few brokerages charge agents a flat fee per transaction (often a few hundred dollars), letting agents keep the rest of their commission. This model appeals to experienced agents who don’t need as much support.

These split arrangements come with trade-offs. Smaller splits for agents usually mean more support, training, and leads. Bigger splits or flat-fee programs work for self-sufficient agents who want to maximize income.

How Experience and Performance Affect Splits

Experience and proven results unlock better deals for real estate agents. As agents close more homes and bring in reliable business, many can negotiate for higher splits or even special perks.

• Established Agents: Top performers often start with a high split like 80/20, or move to a flat-fee structure where they keep even more of their check. Some agents earn a graduated split, getting a bigger share after they close a set number of deals.
• Bonuses and Graduated Splits: Brokerages may offer incentives, such as bonuses or a higher split for each sale after reaching a target. This system motivates agents to keep selling and helps brokers retain top talent.
• Rookie Agents: People just starting typically accept a lower split, possibly as low as 50/50, since they receive more guidance and resources from their brokerage. As they learn and produce more, they can quickly move into higher commission plans.

Pay plans and incentives can differ greatly between companies and even offices. Successful agents track their performance, ask for better terms yearly, and select brokerages offering room to grow. For an excellent rundown of how split models impact new versus experienced agents, check out this guide to real estate commission splits.

Every dollar counts in real estate. Knowing how commission splits work can help agents and clients understand where the money goes — and what services each side receives in return.

Other Sources of Agent Earnings

Not all of a real estate agent's income comes from commissions tied directly to the sale of a home. Many successful agents supplement their earnings through additional channels that reward connections, productivity, or creative thinking. Knowing about these income streams helps explain how agents build steady careers even in slower markets.

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Referral Fees

Agents often earn extra cash by sending clients to other trusted agents. Maybe a past client moves to a new city or a family friend is shopping in another state. Instead of just wishing them luck, agents refer these buyers or sellers to a local expert—and receive a referral fee when the deal closes. This fee usually equals about 25% of the other agent’s earned commission, but the amount can be negotiated based on the relationship and market. Referral income can be a safety net during slow months or a regular stream for agents well known outside their local area. Details about standard referral arrangements are well-explained in this in-depth resource on referral fees in real estate.

Bonuses and Incentives

Some brokerages, builders, or developers offer bonuses to real estate agents as a thank-you for hitting sales targets or helping clear out specific inventory. While not guaranteed, these bonuses reward top-performing agents and add a layer of motivation. Bonuses might come in the form of cash, gift cards, or vacation packages. Builders may pay out extra if an agent sells homes in a new neighborhood or reaches a quota before a deadline.

Profit Sharing and Revenue Share Programs

A handful of brokerages run profit sharing or revenue share programs. Agents at these firms can qualify for a cut of the company’s profits or revenue—paid out monthly or quarterly—when they help recruit other agents or contribute to the brokerage’s growth. This creates a sense of ownership and gives agents incentive to help the company thrive. The more successful the office, the higher the potential payout. Companies like Keller Williams and eXp Realty have made these programs attractive for agents looking for extra earning power on top of sales commissions.

Educational Workshops and Speaker Fees

Seasoned agents sometimes make money by sharing their experience with others. This could mean leading training sessions for new agents, speaking at industry events, or running continuing education courses. Payment comes from ticket sales, honorariums, or training stipends from brokerages. For some, teaching can create a dependable side income while boosting their reputation as experts.

Property Management Fees

Agents with a property management arm collect fees for renting, maintaining, and overseeing homes for landlords. Instead of only getting paid when a home sells, they receive ongoing monthly payments for as long as they manage a property. These contracts add dependable, recurring income that helps offset lean sales months and can grow into a robust business over time.

Partner Services and Affiliate Income

Some real estate pros earn small fees for recommending moving companies, mortgage brokers, or home inspectors. These affiliate relationships allow agents to connect clients with trusted service providers, while collecting a referral bonus for each closed lead. Rules on affiliate income and disclosures can vary, and the best agents keep these relationships above-board. Industry breakdowns, like those found in this article on alternative real estate agent incomes, show how affiliate programs can offer an extra boost without replacing core commission work.

Why These Sources Matter

Agents who develop several income streams insulate themselves against the ups and downs of the market. While commission remains the backbone of real estate pay, referral fees, bonuses, and profit-sharing can provide much-needed stability and even unlock long-term wealth. When choosing an agent, clients might find added value in someone who actively networks, teaches, or manages properties, as these skills often signal deeper experience and dedication.

Factors That Influence How Much Agents Earn

The money real estate agents take home each year can swing wildly from one agent to the next. A lot shapes those earnings: the value agents add, the local market, experience, and all the risks and costs bubbling under the surface. Agents earn more than a paycheck—they’re running a real business, and like any small business, that means what comes in isn’t always what sticks. Here’s how agent pay is shaped by the work they do, the expenses they face, and what it really takes to succeed.

The Value Agents Provide

Behind every commission check is a long list of services. The best agents wear many hats, and each role justifies why they get paid the way they do. You get more than a house tour or someone unlocking doors. Here are just a few tasks agents handle:

• Marketing: Quality agents create professional listings, take high-quality photos, craft strong descriptions, and promote homes across digital channels and print. Some even handle videography or drone photography to make properties shine.
• Market Analysis: Agents know how to price homes right by studying past sales, local trends, and current inventory. They guide clients on if it’s time to buy, sell, or hold.
• Negotiation: Skilled negotiators protect your interests, set the pace of the deal, and work through tough offers and counteroffers. They know what terms to push for and how to get the most out of each deal.
• Transaction Coordination: Agents juggle inspections, contracts, disclosures, and timelines. They keep everyone on track, spot legal red flags, and avoid last-minute surprises.
• Problem Solving: Every deal brings hiccups. Maybe a seller gets cold feet, the bank delays closing, or an inspection uncovers issues. Agents shepherd clients through these twists and keep things moving.

Clients aren’t just buying a service—they’re gaining peace of mind. This range of expertise justifies why agents can ask for higher commissions, especially in markets where competition is stiff and deals get complicated. The more skill and value an agent brings, the bigger the impact on both price and experience. For a closer look at which factors impact agent salaries the most, check out this helpful summary on what shapes real estate agent income.

Expenses and Risks that Lower Net Earnings

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The number an agent earns in commission isn’t what actually lands in their bank account. The real take-home pay gets trimmed by big business expenses, taxes, and the gamble of an all-commission job.

Here’s what eats into an agent’s earnings:

• Marketing costs: Agents often cover photography, online ads, signs, and printed materials for every listing out of their own pocket—win or lose.
• Brokerage fees: No matter the final check size, brokerages claim a share (anywhere from 20% to 50%) in exchange for office support, legal help, and branding.
• Licensing, education, and insurance: Agents must keep licenses current, maintain professional insurance, and pay for required classes.
• Lost time: Agents show dozens of homes, host open houses, and write up offers that might never close. If a deal dies, they don’t get paid for those hours.
• Taxes and benefits: Most agents are self-employed. That means paying their own taxes and footing bills for health insurance, retirement, and more.

The risk is real. Many agents spend weeks (or even months) helping a client only to see a sale fall apart and walk away with nothing. This “all or nothing” system is one reason agent turnover is so high—about 87% of new agents drop out within a few years (NAR: Agent Income). Surviving in this business takes grit, smart budgeting, and building a pipeline that keeps deals flowing. With these demands, higher commission rates start to make sense because they cover more than just the hours you see—they offset the risk, fund the business, and reward the service.

Curious about how much agents actually keep after splits, fees, and costs? Data shows the average U.S. agent commission is around 5.44%, but after all splits and expenses, that paycheck can be much less. See more stats and examples on average commissions and expenses at Real Estate Witch’s fee analysis and Clever’s 2025 commission survey.

Many of the most successful agents are skilled business owners, not just expert salespeople. Their pay reflects long hours, up-front investment, and the courage to work with no guaranteed salary—all in the hope of delivering real results for clients.

Conclusion

Understanding how real estate agents get paid is key to making smart moves in today’s market. Commissions remain negotiable and more transparent than ever before, so you can approach each transaction with clear expectations and confidence. The right agent delivers far more than help with paperwork—they offer pricing guidance, expert negotiation, and steady support, which can save you time and stress.

Before you sign with any agent, ask for a complete explanation of their fees and services. Don’t hesitate to discuss commission details or special terms that best fit your needs. Skilled agents are ready to show the value they bring and work hard for your business.

If you want results, work with a professional who can guide you through each step and help you keep more of your hard-earned money. Thanks for reading—share your experience or questions in the comments, and check back soon for tips on choosing the best real estate agent for your goals.