Do Sellers Pay Agent Fees When Selling a Home?

If this is your first time selling a home, it’s essential that you understand the financial responsibilities associated with the transaction. At first glance, it may seem like the seller walks away cash-in-hand from the sale — after all, isn’t the buyer the one making the purchase?

The buyer may be the one buying the property, but who pays when selling a home?

The real estate transaction process invites additional expenses outside of the property purchase. Both buyers and sellers put money toward the actual real estate transaction. For buyers, this includes the hidden costs of buying a home — such as the inspection fees, moving costs, and so on.

But what are the fees that sellers have to pay? Agent fees. Here’s what sellers need to know about who pays when selling a home.

Who Pays When Selling a Home?

Unless otherwise negotiated, the seller is typically the one who is responsible for paying the agent commissions associated with the property sale transaction.

Sellers pay the total commission for both real estate professionals who assisted with the sale, including the listing and buying agent.

Where Are the Funds Typically Sourced From?

In most cases, the money used to pay the buyer and listing agent commissions is taken out of the lump-sum purchasing price of the property that is transferred to the seller at closing. Like all other transaction expenses, the agent fees are due at closing — so usually, the agent fees are paid immediately from the seller’s financial gains.

How Much Does it Cost to Sell a Home?

Now that you know who pays when selling a home, the next big question is how much does this all cost?

Since agent commissions are not a flat rate across the industry, the fees vary based on how much the specific agents charge for their services. The overall cost will also depend on the purchasing price of the home, since real estate agents calculate their commissions in percentages of the total sales price.

To give you a rough idea of how much you will have to spend on the agent fees at the end of the transaction, the average agent commission charged on a sale ranges between 5% and 6% of the home’s final purchasing price.

This percentage is usually split evenly between the two agents unless otherwise negotiated due to special circumstances. That means that buyer agents usually receive 2.5% to 3% of the home’s final selling price, and the listing agent receives 2.5% to 3%.

Keep in mind that these are general industry estimations and not pricing guarantees.

To know exactly how much selling a home will cost, you will need to determine the precise percentage charged on the selling price as well as the selling price. You will need to speak with your agent about these details when you are ready to move forward with your home sale.

Breaking Down the Numbers

To help you get a clearer understanding of how much it costs to sell a home, let’s run a few calculations based on the current median selling price of homes in the U.S.

According to the National Association of REALTORS®, the median existing-home sales price was $389,500 in September 2022.

• 5% of $389,500 is $19,475.
• 6% of $389,500 is $23,370.

Is It Possible to Negotiate Who Pays When Selling a Home?

While it is industry standard for the seller to pay both the buyer and listing agent fees, it’s not impossible to negotiate this financial responsibility.

Depending on the circumstances surrounding your transaction — such as location, market conditions, and buyer interest — you may be able to add a contingency that requires the buyer to assist with paying the agent commissions.

For example, if you are in a seller’s market with fierce competition, you may be able to strike a deal with the buyer to alleviate the financial burden of agent expenses. However, it is not guaranteed that the buyer will agree to these terms even in a hot market that’s favoring sellers.

Speak with your agent about how the agent commission costs will play out in your real estate sale to learn more about your options, and what you should be prepared for.

To get the answers to other important real estate questions like who pays when selling a home, explore more articles from RealEstateAgents.com. If you’re ready to sell your home and want to get in touch with a top agent in your market, get connected with your perfect real estate agent match today.