How commission is split between the buyer’s agent and the seller’s agent starts with a single number: the total percentage the seller agreed to pay in the listing agreement. That total is then divided between the two brokerages, historically at roughly half each. Since August 17, 2024, the seller no longer sets the buyer’s side of the split unilaterally through the MLS; the buyer negotiates their agent’s fee separately, and the two sides meet either in the seller’s listing agreement, in the purchase offer, or in the buyer’s own pocket.
The Total Commission and Where It Comes From
Before there’s a split, there’s a total. The seller signs a listing agreement with a brokerage that states the commission as a percentage of the final sale price.1National Association of REALTORS®. Consumer Guide: Listing Agreements No law or governing body sets a standard rate. Federal antitrust law prohibits price-fixing among competitors, so any agent describing a rate as “standard” or “the market” is on shaky ground.2Federal Trade Commission. Guide to Antitrust Laws – The Antitrust Laws In practice, total commissions on residential sales have generally fallen in the 5% to 6% range, with buyer’s agent fees averaging around 2.4% as of mid-2025.
The full amount is deducted from the seller’s proceeds at closing. The title company or escrow officer pays the brokerages directly before the seller receives their net check. Sellers don’t write a separate commission check; the money comes out of the sale price.
How the Split Between the Two Sides Actually Works Now
Before August 2024, the listing brokerage advertised the buyer-agent share right inside the Multiple Listing Service. A buyer’s agent could see what they’d earn before ever showing the home. That system ended when the National Association of Realtors’ practice changes took effect as part of a legal settlement over broker commissions.3National Association of REALTORS®. NAR Provides Final Reminder of August 17 Practice Change Implementation Two rules now shape every transaction involving NAR-affiliated agents:
- Listing brokerages can no longer advertise buyer-agent compensation through the MLS. Sellers can still offer it, but that offer has to happen outside the MLS.
- A buyer’s agent must have a signed written agreement with the buyer before showing any property, in person or virtually.
The split, in other words, is no longer a one-sided decision by the seller. Three paths lead to the same closing table. The seller can agree in the listing agreement to offer a set amount to the buyer’s side. The buyer can request seller-paid compensation as part of the purchase offer. Or the buyer can pay their own agent directly out of pocket. The money still flows through closing the way it always did, but who commits to what, and when, has changed.
Because compensation is negotiable and not fixed by law, agents affiliated with NAR are required to say so explicitly.4National Association of REALTORS®. 2026 Code of Ethics and Standards of Practice With MLS visibility gone, buyer’s agents typically find out what a seller will contribute by calling the listing brokerage directly or including a compensation request inside the offer itself. The NAR’s Code of Ethics prohibits listing agents from delaying delivery of a buyer’s offer while negotiating compensation, so the inquiry can’t be used as a gatekeeping tool.
What a Typical Split Looks Like
When both sides receive a share, the most common arrangement is still roughly equal. On a 5% total commission, that usually means about 2.5% to the listing brokerage and 2.5% to the buyer’s brokerage. Uneven splits happen regularly, though. A seller in a strong market might offer less to the buyer’s side. A buyer’s agent with a strong track record might negotiate a higher fee in the written buyer agreement. Nothing about the division is fixed.
The written buyer agreement is the document that governs what the buyer’s agent earns. It has to be signed before any property is shown, and it has to state compensation as a specific figure: a dollar amount, a flat fee, a percentage, or an hourly rate. Open-ended ranges are not permitted.5National Association of REALTORS®. Consumer Guide to Written Buyer Agreements
One clause in that agreement deserves a careful read: what happens when the seller offers compensation. If the agreement says the agent earns 2.5% and the seller offers 3%, does the agent keep the difference? Most well-drafted agreements cap the agent’s total compensation at the agreed amount and credit any seller contribution against it, but this isn’t universal.
Variable Commission Clauses
Some listing agreements include a reduced rate when the listing brokerage doesn’t share the commission with an outside firm. A seller might agree to 5% if two brokerages are involved but only 4% if the listing agent brings the buyer directly. This is worth negotiating into the listing agreement at the start, because the brokerage’s cost genuinely drops when it doesn’t split.
When One Brokerage Represents Both Sides
The external split disappears entirely when a single agent or brokerage represents both parties. The brokerage keeps the whole commission because there’s no outside firm to pay. This arrangement is called dual agency, and it’s financially the best outcome for the brokerage and the riskiest for the clients: one agent can’t fully advocate for the buyer’s lowest price and the seller’s highest price at the same time. About eight states ban dual agency outright, including Colorado, Florida, Texas, and Maryland. In those states, each side must have separate representation.
Designated agency sits in the middle. Two different agents from the same brokerage each represent one side. The brokerage still keeps the full commission internally, but the buyer and seller each have their own advocate. The split between the two agents then follows whatever internal arrangement each has with the firm.1National Association of REALTORS®. Consumer Guide: Listing Agreements
What Each Agent Actually Takes Home
The brokerage-level split is only the first cut. Individual agents don’t keep everything their firm receives. Each agent works under an independent contractor agreement that spells out how commissions are shared with the brokerage. Federal tax law treats licensed real estate agents as statutory nonemployees when their pay is tied to sales output rather than hours worked and a written contract confirms that arrangement.6Office of the Law Revision Counsel. 26 U.S. Code 3508 – Treatment of Real Estate Agents and Direct Sellers
Internal splits vary widely by brokerage model:
- Under a traditional split, the agent keeps 60% to 80% and the brokerage retains the rest. A new agent at a large franchise might start at 50/50 and work up.
- Under a cap model, the agent pays the brokerage’s share up to an annual dollar ceiling, then keeps 100% for the rest of the year. One publicly traded brokerage uses an 80/20 split with a $16,000 annual cap.7Securities and Exchange Commission. Exhibit 10.3 Independent Contractor Agreement
- Under a 100% commission model, the agent keeps everything but pays the brokerage a flat monthly desk fee regardless of production.
In practice: if a buyer’s brokerage earns $12,000 on a sale and the agent is on a 70/30 split, the agent takes home $8,400 before expenses. From that, the agent covers self-employment taxes at 15.3% for Social Security and Medicare combined, health insurance, errors and omissions insurance, marketing, and continuing education. Agents earning under $100,000 in gross commissions can easily spend 30% or more of gross on business costs.
Many brokerages also charge a separate transaction or administrative fee on top of the percentage, often $300 to $600, to cover document management and compliance work. Some listing agreements pass this cost to the seller; others take it out of the agent’s share. Worth asking about before you sign.
What the Buyer Pays if the Seller Won’t Contribute
This is where the new split mechanics land hardest on buyers. If the seller declines to contribute toward the buyer’s agent fee, the buyer owes that fee under the written buyer agreement. A few options exist, none of them painless:
- Pay at closing from savings. The fee appears on the Closing Disclosure and is collected at settlement alongside other closing costs.
- Negotiate a higher purchase price and ask the seller to credit that amount toward the agent’s fee. The home has to appraise at the higher price, or the lender won’t fund the loan.
- Walk away. The buyer agreement usually covers a set period, not a specific property.
One thing that does not work as of 2026: rolling the buyer’s agent commission into the mortgage. Fannie Mae and Freddie Mac do not treat agent commissions as costs that can be financed into the loan amount. Regulators have discussed changes, but the restriction remains in place.
If an agent, on either side, presents their fee as non-negotiable or fixed by the market, that’s a signal to push back or shop around. The total commission is negotiable, the split between the two sides is negotiable, and, since August 2024, the buyer’s share is negotiated on its own track with its own document.