The Average Brokerage Commission on House Sales

Don't be afraid to haggle over real estate commissions.

The average brokerage commission on home sales has dropped since the 1990s. CNN Money reported that the once-standard 6 percent commission fell to 5 percent as of 2007. You may still have to haggle to get it to that point, though, says The Wall Street Journal.

Types

Commissions are generally paid as a percentage, but can also be paid as a specified dollar amount. The seller usually pays the commission for the seller's agent and buyer's agent. The commission is usually divided equally between brokerages.

Considerations

Brokerage commissions are generally determined by the real estate office, agency, or market region, says Mortgage News Daily. Neither the brokerage nor the real estate agent pockets the entire commission. In most cases, the agent gets a percentage of the commission based on a split negotiated with the brokerage.

Expert Advice

"By law, commission must be negotiated. Otherwise it's known as price fixing," says CNN Money. Its experts advise getting three to four commission estimates from other agents and using a "laddered approach" to negotiate. Offer a bonus for selling at the target price, and lower the commission accordingly.

References

• CNN Money: Negotiating Real Estate Commissions
• Mortgage News Daily: How Much Commission Does a Real Estate Agent Make on Each Home Sold?
• The Wall Street Journal: What to Know About Commissions Before Selling a Home