How Much Are Realtor Fees and Who Pays, Buyer or Seller?

Who pays Realtor fees on a home sale, the buyer or seller? Historically, in almost all cases, the seller paid the entire commission fee for the listing agent and the buyer’s agent. However, a landmark lawsuit settlement by the National Association of Realtors (NAR) changed the way real estate agent commissions are handled. These changes have “decoupled” seller and buyer agent compensations.

This seismic industry shift gives buyers the ability to negotiate commission amounts directly with their own agents. Some industry experts predict this decoupling will eventually benefit both buyers and sellers through lower Realtor fees and more innovative options — and possibly even lower home sale prices.

No matter how the commission changes play out, you work hard for your money. Thus, you want to make sure the money you spend on real estate agent fees is well spent. You would like to ensure that your agent sells your house for the most profit possible to more than cover their Realtor fees.

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According to a recent trend report from the National Association of Realtors (NAR), nearly 90% of home sellers worked with a real estate agent last year. NAR surveys indicate that these sellers sold their homes for a median of $66,000 more than they purchased them and were “very satisfied” with the selling process.

The $66,000 gain and satisfaction with the selling process are a function of agent fees. You get a top-tier marketer, negotiator, and advocate for your best interests in exchange for paying an agent’s price.

Let’s dig deeper to discover everything you get when you pay Realtor fees.

What’s the difference between a Realtor and an agent?

Real estate agents and Realtors® are not the same, even though people use the terms interchangeably. As explained by a top real estate agent, Randi Szakaly of Snohomish County, Washington, “A real estate agent simply holds a real estate license whereas a Realtor subscribes to a code of ethics that holds them to a higher standard.”

While some Realtors are brokers and others are licensed real estate agents, not all real estate agents are Realtors. To be designated a Realtor, an agent must undergo more education and is bound by a strict Code of Ethics & Standards of Practice.

What is a Realtor fee?

The fee is not pure profit for the real estate agent. Here is an example of how a Realtor fee works for you.

As of July 2024, the median sales price of a house sold in the United States was $422,600. Based on the traditional commission model, the national average for a Realtor fee typically falls around 5.8% – but let’s round it up to 6% to get nice, round numbers to analyze. This will also help us when we illustrate the decoupling of commissions, breaking out 3% paid by the seller and 3% paid by the buyer.

Keep in mind that the data our upcoming examples are based on may change as the dust settles following the recent NAR commission and rule changes.

from HomeLight Blog https://www.homelight.com/blog/realtor-fees/