Agent Commission: How It Works and Ways to Lower It
If you’re buying or selling a home, the term “agent commission” shows up fast. It’s the fee you pay the real‑estate agent for handling the paperwork, marketing, negotiations and the rest. Most people assume it’s a fixed amount, but there’s a lot of wiggle room once you understand the basics.
How Agent Commission Is Calculated
Typically, agents charge a percentage of the final sale price – 1% to 3% is common in the UK, while in the US you’ll often see 5% to 6% split between the buyer’s and seller’s agents. The percentage is applied to the total sale amount, not the listing price, so a higher‑priced home means a bigger dollar commission even if the percent stays the same.
Most commissions are split between the listing agent, the buyer’s agent, and their brokerage firms. That split can be 50/50, 60/40, or any other ratio the agents agree on. Because of these splits, the amount the agent you actually work with receives can be far less than the headline percentage.
Legal Ways to Reduce or Avoid Commission
Good news: you don’t have to hand over the full commission if you’re willing to negotiate. In 2025 new rules after the NAR settlement let buyers ask for rebates from their broker, and sellers can list homes at a “limited‑service” rate that drops the commission in exchange for fewer marketing services.
Another option is to go FSBO – “For Sale By Owner.” You keep the listing side of the commission, but you’ll still need a buyer’s agent in many cases, so you’ll usually pay a reduced fee to the buyer’s side only. Some platforms let you pay a flat fee for listing services, which can shave a few thousand pounds off the total cost.
Don’t forget to ask for a written breakdown of the services covered by the commission. If the agent isn’t providing certain marketing tools, you can ask for a lower rate or handle those tasks yourself. Transparency makes negotiation easier.
Finally, shop around. Commission rates aren’t set by law, so you can compare multiple agents and choose the one who offers the best value for the services you need. A higher‑priced agent might actually save you money if they sell your home faster or for a higher price.
Bottom line: agent commission is a percentage‑based fee that can be adjusted, split, or reduced if you ask the right questions. Understanding how it’s calculated and what you’re actually paying for gives you leverage to keep more of your home‑sale profit.