Real Estate Commission: What You Really Pay and How It Works

When you buy or sell a property, real estate commission, the fee paid to agents for facilitating a property transaction. Also known as agent fees, it’s usually a percentage of the sale price and is the main way agents earn their income. Many people assume the seller covers the full cost, but that’s only half the story. The commission is typically split between the seller’s agent and the buyer’s agent, and it’s built into the listing price—so even if you’re buying, you’re indirectly paying it.

It’s not a fixed rate. In the U.S., it’s often around 5% to 6%, but in India, it can range from 1% to 3%, depending on the city, property type, and negotiation. Commercial properties sometimes have different structures—like a flat fee or tiered commission based on sale value. Some agents offer discounted rates for high-value deals or if you’re both buying and selling through them. What’s often overlooked is that commission isn’t mandatory by law; it’s negotiable. If you’re selling, you can ask for a lower rate, especially if your property is in high demand. If you’re buying, you can ask your agent if they’ll reduce their share or waive it entirely in exchange for a longer-term relationship.

Who gets the commission, and when is it paid?

The commission doesn’t go straight to the agent. It’s shared with their brokerage, which handles marketing, legal paperwork, and office costs. The agent only takes their cut after the deal closes. That’s why you never pay upfront—you only pay when the keys are handed over. This protects buyers and sellers from scams. If a deal falls through, no commission is due. Some agents now offer flat-fee listing services, especially for sellers who want to handle showings themselves. These options cut costs but mean you’ll need to do more work.

What you’ll find in the posts below is real-world insight into how commission works across different markets—from what landlords in Virginia charge when renting out property, to how commercial brokers in CoStar’s network structure their deals, to why some buyers in Australia avoid agent fees by buying off-market. You’ll see how commission affects pricing, what hidden costs can sneak in, and how to negotiate better terms. Whether you’re selling a 2BHK apartment in India or leasing a commercial space in Texas, understanding commission means you keep more of your money and avoid being misled.