The Latest News on Student Loan Forgiveness

Skip to Main Content
Home Buying

How Much Does a Real Estate Agent Cost? Is It Worth It?

Whether you’re buying or selling a house, you’re dealing with such a huge amount of money that one mistake could cost you tens of thousands of dollars—and cause months of migraines. So there’s no wonder why over 88% of all buyers and sellers choose to work with a real estate professional.1

But how much does a real estate agent cost exactly? More importantly, is it worth it? Maybe you’re dreaming about how much cash you could pocket if you don’t hire an agent.

We get it. We’re all about saving money, too. But you might be disappointed at how little you actually save if you skip out on having an experienced pro guiding you through the deal. So, before you decide if an agent is worth the cost, let’s consider all the value a good one provides.

How Much Does a Real Estate Agent Cost?

The standard commission for a real estate transaction is typically 6% of the home’s sale price, according to most real estate websites. The commission is usually split between the seller’s agent and buyer’s agent—meaning both agents receive a 3% cut. So, if you’re buying or selling a $250,000 house, the agents would receive a total of $15,000 (or $7,500 each). Now, if you’re like us, when you’re charged a fee that big, it’d better be for a good reason, right?

Find a trusted real estate agent we recommend in your area.

So, let’s find out exactly how that 6% breaks down!

What Does a Real Estate Commission Cover?

A real estate commission covers all the work that goes into buying and selling property. Trust us, a great agent does a lot to help you buy or sell a house. A seller’s agent shows you how to stage your home for buyers and—since they know what similar homes in your area are selling for—they help you price it right. They also put your home in front of a ton of buyers using a multiple listing service (MLS), social media and ads. This helps you get your home sold quickly and for top dollar.

Meanwhile, a buyer’s agent studies home listings that match your needs and price range. They help you arrange a home inspection and oversee any necessary repairs or contract adjustments so you don’t get a bad deal. They do everything they can to help you find and purchase a dream home that’s within your budget.

Beyond those differences, both types of agents give you the confidence that a real estate professional is on your side, and they offer many similar services. For example, both agents:

  • Meet with you in person to understand your needs and answer any questions you have

  • Educate you on current market conditions

  • Give you access to an MLS—which offers more options to buyers and visibility to sellers

  • Refer other needed pros (mortgage lenders, photographers, inspectors, attorneys)

  • Schedule home showings

  • Negotiate the best price for you

  • Represent you throughout the sale and act in your best interest

  • Help you through the mountain of paperwork

A good agent tackles these tasks day in and day out. Their experience helps you avoid rookie mistakes. Sure, you can try to handle all these things by yourself. But, when you’re sitting in the hot seat of a real estate transaction, you’ll quickly realize that agents are worth their weight in gold!

How Do Real Estate Agents Get Paid?

It’s standard practice for the seller to cover the commission for both the seller’s agent and buyer’s agent. So, if you’re buying a home, you may get all the benefits of using an agent for free! The commission is paid at the end of the deal as part of the closing costs and comes out of the sales proceeds.

It’s standard practice for the seller to cover the commission for both the seller’s agent and buyer’s agent. So, if you’re buying a home, you may get all the benefits of using an agent for free!

Is Hiring an Agent Worth the Cost?

Okay, now let’s answer the question you’ve been waiting for: Are real estate agents worth the cost? Well, as we covered earlier, sellers cover the commission for both agents. So, buyers have nothing to lose! But how about you sellers out there? If you’re considering not using an agent or going the “For Sale by Owner” (FSBO) route, first take a look at the stats. The latest data shows the typical FSBO home sold for $217,000 compared to $242,300 when sold by an agent.2 That’s a $25,300 difference!

If you’re considering not using an agent or going the “For Sale by Owner” (FSBO) route, first take a look at the stats. The latest data shows the typical FSBO home sold for $217,000 compared to $242,300 when sold by an agent.2

Sure, around $16,000 of that would go toward the agent commissions. But that’s still almost $50,000 more in your pocket than you would have gained by selling solo! And, even if that difference ($65,000) is only half right in your particular market, you’d still potentially come out ahead by $18,500 by using an agent.

Find an Agent Who’s Worth Every Penny

A good agent is worth the cost! Just make sure you know how to find an agent who has solid experience. Your buddy who’s just getting started in the real estate biz isn’t going to cut it. Let them earn their chops with someone else’s money. You need a pro who has a long history of success! But where can you find an experienced agent in your area who shares your financial values and will walk you through the process step-by-step?

Try our Endorsed Local Provider (ELP) program, where we’ll instantly connect you with the top-performing real estate agents in your area for free. From there, you can interview them to decide which agent gets the right to buy or sell your home.

Find a real estate agent today!

Interested in becoming an Endorsed Local Provider? Let us know.

Frequently Asked Questions

Are Real Estate Agent Fees Included in Closing Costs?

Yes, real estate agent fees are included in home closing costs. The commission fees are typically 6% of the home price. This commission is split in half—3% for the seller’s agent and 3% for the buyer’s agent. It’s common for the seller to pay for both agent commissions. In other words, working with an agent is usually free for the buyer—woo-hoo!

How Do You Ask Someone to Be Your Real Estate Agent?

Most real estate agents are easily reached by phone, email or programs like our Endorsed Local Providers (ELP). Our program makes it super simple to find real estate agents who are RamseyTrusted and are highly qualified to serve you with excellence. All you have to do is share some info about your home purchase or home sale, and then we’ll send you top agents in your area who you can trust. Hop on a call to ask the agents a few interview questions so you can choose the one you like best.

Can You Change Real Estate Agents?

Yes, in most cases, you can switch real estate agents. The only time this gets tricky is if you’ve signed an agreement to work with the agent for a period of time. If the time period hasn’t ended yet and you changed real estate agents, that’d violate the agreement. But if you have a really good reason for ending the agreement early, talk it out with the agent. A good agent will likely let you break the contract in order to maintain a solid reputation in the community.

Can You Negotiate a Real Estate Agent Commission?

Yes, you’re allowed to negotiate the real estate agent commission. Keep in mind, commission fees are usually 6% of the home price. This commission is split in half—3% for the seller’s agent and 3% for the buyer’s agent. Both agents do a ton of work to help you successfully close on a home. So if you’re going to try and knock them down in price, make sure you do your research and have a specific reason why. Also, if you sign any legal documents agreeing to pay your agent a specific amount, you’ll likely be held to that amount. So make sure you ask any questions you have about the commission before you sign anything.

What Can You Expect From a Real Estate Agent?

Simply put, real estate agents help you buy or sell a house. The best ones work in real estate every single day as their full-time job. If you’re selling your home, a seller’s agent (also known as a listing agent) should help you with a bunch of things, like deciding on the right price for your home, arranging for a home inspection and guiding you on what to fix, identifying how to stage your home for buyers, creating a marketing strategy to find buyers, helping you pick the right offer, negotiating the best deal, and walking you through the closing paperwork.

If you’re buying a house, a buyer’s agent should help you find a home for sale in your price range, research neighborhoods for best fit, attend open houses and showings, make a competitive offer within your budget, negotiate the contract, handle the home inspection, and gather all the paperwork due on closing day.

Ramsey Solutions

About the author

Ramsey Solutions

Ramsey Solutions has been committed to helping people regain control of their money, build wealth, grow their leadership skills, and enhance their lives through personal development since 1992. Millions of people have used our financial advice through 22 books (including 12 national bestsellers) published by Ramsey Press, as well as two syndicated radio shows and 10 podcasts, which have over 17 million weekly listeners. Learn More.

Related Articles

How to Find a Real Estate Agent
Home Buying

How to Find a Real Estate Agent

Learn how to find a real estate agent you can trust. That way, you’ll get the help you need to buy or sell a house on your timeline and for the right price.

Rachel Cruze Rachel Cruze
What Does a Real Estate Agent Do?
Home Buying

What Does a Real Estate Agent Do?

You’ve seen them all over, but what do real estate agents do? We’ll give you all the info you need about the amazing things an agent can do to make your buying and selling experience awesome!

Ramsey Solutions Ramsey Solutions

Conquer the real estate market.

Show Me Local Agents

Conquer the real estate market.

Don’t navigate the housing market alone. Work with a real estate agent who cares more about helping you find your dream home than about scoring a paycheck.
Show Me Local Agents

Conquer the real estate market.

Don’t navigate the housing market alone. Work with a real estate agent who cares more about helping you find your dream home than about scoring a paycheck.
Show Me Local Agents