Real estate glossary
Real estate commission
Also called: Broker compensation, Agent commission
The fee paid to real estate brokers for a sale, usually a percentage of the price, agreed in writing and always negotiable.
A commission is what the brokerages involved in your sale are paid. It is usually a percentage of the sale price (sometimes a flat fee) and is paid out of the sale proceeds at closing, not out of your pocket beforehand.
Commission rates are not set by law — they are negotiated between you and your broker and written into the listing agreement. Since August 2024 (following the national NAR settlement), offers of compensation to a buyer's agent can no longer be advertised on the MLS, and buyers sign their own written agreements with their agents, so how a buyer's agent gets paid is often part of the offer negotiation.
What it means for you as a seller
Know exactly what your listing agreement says you owe and when. If a buyer asks you to pay their agent, that request shows up in the offer and is yours to accept, reject or counter.
Related terms
- Listing agreementThe contract between you and your listing broker that sets the list price, how long the listing lasts and how the broker gets paid.
- Seller creditMoney the seller agrees to give the buyer at closing, usually toward their closing costs or instead of making repairs.
- Seller closing costsThe fees and charges a seller pays at closing, such as commissions, escrow and title fees, transfer taxes and prorated bills.
Not legal or tax advice. These explanations are general information to help you follow your own transaction. Laws, forms and customs vary by state and county, and the terms of your own contract always control. For advice about your situation, talk to your real estate agent, a real estate attorney or a tax professional. Last updated .