We’re Answering Your Burning Question: “How Are Real Estate Commissions Structured?”

Let’s be honest—when it comes to selling a home, one of the first questions people ask is, “So… how much is this going to cost me?” Right after, “How are Real Estate Commissions Structured?” (i.e. How much are you making off my home journey?) Right after, “Do I really need to clean out the junk drawer before showings?” (Yes, you do. Buyers open drawers. It’s a thing.)

One of the biggest costs you’ll encounter in a real estate transaction is the commission. It’s one of those areas that feels a little mysterious, like the secret sauce at your favorite restaurant. So, let’s break it down and pull back the curtain on how real estate commissions are structured.

What Exactly Is a Real Estate Commission?

Think of it as the professional fee for your agent’s time, expertise, negotiation skills, and general ability to keep you from pulling your hair out during one of life’s most stressful transactions. It’s not an hourly wage or a flat salary—it’s based on the sale of your home.

Typically, commissions are a percentage of the final sale price. That means the better your home sells, the better everyone feels (you included).

The Typical Breakdown

While commissions can vary, the common structure looks something like this:

• Total commission: Usually around 6% of the home’s sale price.
• Split between brokerages: The listing brokerage and the buyer’s brokerage typically share this amount.
• Split between agents and their brokerages: Agents don’t pocket the entire cut—they share it with their brokerage, too.

So, if your home sells for $300,000 and the total commission is 6%, that’s $18,000. That gets divided between the listing side and the buying side, and then split again between the agents and their brokerages. When all is said and done, your agent is not Scrooge McDuck swimming through gold coins.

Who Pays the Commission?

Traditionally, the seller pays the commission out of the proceeds at closing. It’s baked into the transaction, meaning you don’t have to write a separate check. Buyers, in turn, indirectly pay because commission costs can be factored into the home price.

Is It Negotiable?

Yes. Commissions are not set in stone (no matter what your neighbor’s cousin’s brother said). Agents may adjust based on market conditions, the type of property, or the level of service. Just keep in mind—you often get what you pay for. A lower commission might mean less marketing firepower or fewer services.

Why It’s Worth It

At first glance, commissions might feel like a big bite. But remember what you’re paying for:

• Marketing muscle (photos, videos, online listings, open houses, the works)
• Market expertise (pricing your home right so it doesn’t sit on the market forever)
• Negotiation skills (because who doesn’t want more money in their pocket?)
• Peace of mind (your agent deals with the endless paperwork, phone calls, and scheduling so you don’t have to).

Selling a home is not exactly a DIY-friendly project—unless you also moonlight as a marketer, negotiator, photographer, legal expert, and full-time therapist.

The Bottom Line

Real estate commissions may seem complex, but at the core, they’re simply a way to fairly compensate the people helping you sell (or buy) one of your biggest investments. And when you’ve got the right agent on your side, that commission feels less like a cost and more like an investment in getting the best possible outcome.

Because let’s face it—moving is stressful enough. At least with a good agent, you won’t have to add “negotiating with buyers” or “learning contract law overnight” to your to-do list.

If you’re in the Kansas City area and feel comfortable to move forward on the home buying or selling journey after we’ve answered your questions on, “How are Real Estate Commissions Structured?” then hit us up! We’re excited to start the adventure with you.

Let us answer all of you questions over on our real estate FAQ page!