What factors affect a Realtor's commission?

By: HowStuffWorks.com Contributors

In the United States, a Realtor's commission ranges from five to six percent. This commission is split evenly between the buyer's agent and the seller's agent [source: Linden]. The home seller is required to pay the commission fees. Several factors will affect how much of a commission a Realtor winds up with. For one thing, many Realtors are employed by real estate firms. Realtors frequently have to pay their firms anywhere from 30 to 50 percent of the commission amount [source: Lending Tree]. Realtors who don't work for a firm may still have to deduct a piece of the commission if they're working together with real estate brokers on a deal. While Realtors who are self-employed don't have to part with any of the commission they earn, they risk losing out to larger competitors.

While commissions are negotiable, the National Association of Realtors (NAR) strongly suggests that its members not charge less than five percent. The NAR believes that the high quality of service provided by its members justifies the full commission. According to the NAR, homes that are represented by certified Realtors sell at a higher rate than homes that don't make use of a Realtor [source: National Association of Realtors]. Still, whenever the housing market begins to cool, certified Realtors are more likely to consider lowering their commissions.


Due to the extremely competitive nature of the real estate business, the vast majority of Realtors aren't very likely to get rich. However, salaries tend to remain stable regardless of the current housing market [source: Goolsby]. In hot markets, the real estate field becomes saturated with agents, which decreases the number of homes that are available to each agent. In cold markets, the number of homes to sell dips, which leads to a drop in the number of agents in the field.