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 or email. Our Endorsed Local Providers (ELP) program makes it super simple to find real estate agents who are RamseyTrusted and 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. 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. You’ll want to ask any questions you have about the commission early in the process before you sign any legal documents agreeing to pay your agent a specific amount.

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, planning 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.

Home Buying

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

7 Min Read | Aug 18, 2023

By Ramsey Solutions

Whether you’re buying or selling a house, you’re dealing with a huge amount of money. This isn’t a surprise! But just one mistake during the home-buying or -selling process could cost you tens of thousands of dollars—and cause plenty of stress too. And that’s no fun. So, it’s no wonder why over 80% of all buyers and sellers choose to work with a real estate professional.¹

But how much does a real estate agent cost? More importantly, is it worth it? Maybe you’re dreaming about how much cash you could save if you sell your house yourself.

Hey, I love saving money, too. But the reality is, you might be disappointed at how little you can actually save if you don’t have an experienced real estate pro guiding you through the deal.

Think about it: Would you hire a mechanic to clean your teeth? No way! You need a professional for your pearly whites. Someone who spent years in school and has cleaned thousands of teeth before yours. The same logic goes for buying or selling a house.

So sit back, and I’ll walk you through all the costs and benefits of hiring a real estate agent.

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 divided up between the seller’s agent and buyer’s agent. But do you have to pay real estate agents if you’re buying a house? Nope! Traditionally, the seller pays the entire commission.

So, if you sell your house for $250,000, the agents might get a total of $15,000. Now, if you’re like me, when you have to pay a fee that big, you want it to be for a good reason, right?

Right. So, let’s find out if hiring a real estate agent is worth it.

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, yes . . . since sellers cover the commission for both agents, buyers have nothing to lose!

When you use an agent as a buyer, you have someone working for you who sees hundreds of houses a year. What are some of the advantages of using a buyer’s agent?

An agent will help you find the right house in the right neighborhood.
An experienced agent should spot any red flags and have a much better idea of how much the home you love is worth.
An agent will be in your corner when it’s time to negotiate on price or repairs.

But how about you sellers out there? Here’s how an agent can help you.

A seller’s agent gives you peace of mind when it comes to selling your biggest asset.
An agent who sells lots of homes will know the market and help you price your home right.
An agent will market your home and set up showings.
An agent will help you handle offers and negotiate with buyers.

Now you might be wondering, What’s the difference between a real estate agent and a REALTOR®? Well, they all help clients buy and sell houses. The difference is that REALTORS® are members of the National Association of REALTORS® (NAR). REALTOR® is the trademarked name the NAR gives its agents.

If you’re thinking about not using an agent and going the For Sale by Owner (FSBO) route, I want you to take a look at these stats first. The latest data shows the typical FSBO home sold for $225,000 compared to $345,000 when sold by an agent.² That’s a $120,000 difference!

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

Sure, around $21,000 of that would go toward the agent commissions. But that’s still almost $100,000 more than you’d make by selling solo. Cha-ching! And, even if that difference is only half right ($60,000) in your particular market, you could still come out $43,000 ahead by using an agent.

What Does a Real Estate Commission Cover? How Much Commission Does a Real Estate Agent Make

A 6% real estate commission covers all the work that goes into buying and selling property. Trust me, 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. I know—it’s like a personal marketing campaign for your house! This helps you get your home sold fast and for top dollar.

Meanwhile, a buyer’s agent studies home listings to help you find a home that checks off all the boxes on your list. (Or at least most of the boxes.) When you find a house you like, they’ll help you write up an offer.

Once you have a home under contract, a buyer’s agent will arrange a home inspection and oversee any necessary repairs or contract adjustments so you don’t get a bad deal.

Beyond those differences, both types of agents give you the confidence that a real estate professional is on your side, and they offer plenty of 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 realize pretty fast that agents are worth their weight in gold.

How Much Do Real Estate Agents Make?

Buyers’ and sellers’ agents only get paid at closing. They work 100% for commission. And they only get their portion of the commission if their client buys or sells a home.

So, how much does a real estate agent make? They don’t just pocket their whole commission check. They give part of their commission to their brokerage—not to mention the money they spend on photographs, gas, marketing, licensing, and office fees.

Top agents can earn six figures, easy. But bad agents who don’t move properties will struggle to make ends meet.

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 might 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 sale proceeds.

Find an Agent Who’s Worth Every Penny

Trust me, a good agent is worth the cost. But make sure you know how to find an agent with solid experience. Hiring a friend who’s new to real estate won’t cut it. They can learn the ropes with someone else’s money. You need a pro with a long history of success! And I know where you’ll find an experienced agent in your area who shares your financial values and will walk you through the process step-by-step.

Our RamseyTrusted real estate agents are here to help. We’ll instantly connect you with the top-performing real estate agents in your area for free. From there, you can interview them and ask them questions to decide which agent gets to help you buy or sell a home.

Find a real estate agent today!

Interested in becoming one of our RamseyTrusted real estate agents (previously known as Endorsed Local Providers, or ELPs)? 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 or email. Our Endorsed Local Providers (ELP) program makes it super simple to find real estate agents who are RamseyTrusted and 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. 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. You’ll want to ask any questions you have about the commission early in the process before you sign any legal documents agreeing to pay your agent a specific amount.
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, planning 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.

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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.