Who Pays the Realtor Fees in Each State?
Who pays Realtor fees in each state? There isn't a universal state-by-state rule requiring either the buyer or seller to pay all real estate agent fees. Broker compensation is negotiable and depends on the agreements between buyers, sellers, and their real estate professionals.
Understanding how real estate agent fees work is important whether you're considering a career in real estate or preparing to help clients through a transaction. Below, we'll explain how agents are paid, who may pay broker and referral fees, and how estimated real estate commissions compare across the country.
Table of Contents
- How Are Real Estate Agents Paid?
- What Are Referral Fees?
- Who Pays the Referral Fee in Real Estate?
- Who Pays Broker Fees in Each State?
- How Much Are Real Estate Agent Fees?
- Average Real Estate Commission and Fees by State
- Real Estate Agent Fees by State: Highlights
- Can Buyers Negotiate Real Estate Agent Fees?
- Can Sellers Pay a Buyer's Agent?
- Are Real Estate Commission Rates Set by Law?
- What Do Real Estate Agent Fees Cover?
- Understanding Broker Fees Before a Transaction
How Are Real Estate Agents Paid?
Real estate agents are generally compensated through their brokerage for helping clients buy or sell property. Broker fees may be structured as a percentage of the sale price, a flat fee, or another amount agreed to by the client and brokerage.
Who ultimately pays those fees depends on the agreements involved in the transaction. Sellers typically negotiate the compensation they will pay their listing brokerage. Buyers may also agree in writing to compensate their own brokerage.
A seller can agree to pay some or all of the buyer broker's compensation as part of a transaction. However, real estate broker fees and commissions are not set by law and are negotiable.
The way buyer-agent compensation is communicated also changed in 2024. Offers of compensation to buyer brokers can no longer be made through Multiple Listing Services (MLSs) subject to the National Association of REALTORS®' practice changes. Compensation may still be negotiated outside the MLS, and sellers can authorize payments or offers of payment to buyer representatives.
What Are Referral Fees?
Real estate brokers may sometimes pay referral fees to other licensed real estate brokers or agents for referring clients. These arrangements are generally documented through a referral agreement that specifies how compensation will work.
However, referral payments are subject to federal and state law. The federal Real Estate Settlement Procedures Act (RESPA), for example, generally prohibits paying or receiving a fee or other thing of value in exchange for referrals of settlement-service business involving federally related mortgage loans.
RESPA does permit cooperative brokerage and referral arrangements between real estate agents and brokers when the parties are acting in a real estate brokerage capacity.
Who Pays the Referral Fee in Real Estate?
In a permitted broker-to-broker referral arrangement, the brokerage receiving the referral typically pays the agreed referral fee according to the terms of the referral agreement.
The amount, timing, and other payment terms depend on the agreement and applicable state and federal requirements. Referral fees should not be treated as unrestricted payments that can be made to anyone who sends a potential client to a real estate professional.
Who Pays Broker Fees in Each State?
There isn't a simple state-by-state rule saying buyers pay real estate agent fees in one state while sellers pay them in another.
Instead, broker compensation is negotiated between the parties and their real estate professionals. A seller generally agrees to the compensation owed to the listing brokerage. A buyer's written agreement with their brokerage explains how their buyer broker will be compensated.
Depending on the transaction, that buyer-broker compensation may come from:
- The buyer
- The seller
- The listing brokerage, when permitted and agreed upon
- A negotiated seller concession or other permitted arrangement
- A combination of permitted sources
Since August 17, 2024, offers of compensation to buyer brokers cannot be communicated through MLSs covered by the National Association of REALTORS®' settlement-related practice changes . Sellers may still authorize an offer of compensation outside the MLS.
Because compensation arrangements differ from one transaction to another, buyers and sellers should review their brokerage agreements carefully to understand what they have agreed to pay.
How Much Are Real Estate Agent Fees?
There is no standard commission rate that applies to every real estate transaction. Commission rates vary based on the brokerage, market, property, services provided, negotiations between the parties, and other factors.
When broker compensation is calculated as a percentage of a property's price, the basic formula is:
Home Price × Commission Rate = Estimated Broker Fee
For example, if a $400,000 transaction had an agreed commission of 2.5%:
$400,000 × 2.5% = $10,000
That example does not mean 2.5% is a standard, required, or recommended commission. Broker compensation is negotiable.
The table below uses current average commission estimates alongside June 2026 Zillow Home Value Index typical home values to illustrate how commission amounts may differ across states.
The estimated total commission is calculated as:
Typical Home Value × Average Total Commission Rate = Estimated Total Commission
These figures are estimates only. The “buyer commission” and “seller commission” columns describe average compensation associated with each side of a transaction. They do not mean the buyer necessarily pays the buyer-side commission or that the seller necessarily pays both amounts.
Average Real Estate Commission and Fees by State
| State | Avg. Total Commission | Avg. Buyer-Side Commission | Avg. Seller-Side Commission | Typical Home Value, June 2026 | Estimated Total Commission |
| Alabama | 5.59% | 2.78% | 2.81% | $241,517 | $13,501 |
| Alaska | 5.22% | 2.55% | 2.67% | $400,659 | $20,914 |
| Arizona | 5.71% | 2.83% | 2.88% | $422,822 | $24,143 |
| Arkansas | 5.59% | 2.78% | 2.81% | $228,662 | $12,782 |
| California | 5.08% | 2.51% | 2.57% | $775,549 | $39,398 |
| Colorado | 5.47% | 2.69% | 2.78% | $543,435 | $29,726 |
| Connecticut | 5.03% | 2.44% | 2.59% | $455,424 | $22,908 |
| Delaware | 5.59% | 2.78% | 2.81% | $412,252 | $23,045 |
| District of Columbia | 5.34% | 2.63% | 2.72% | $579,332 | $30,936 |
| Florida | 5.29% | 2.64% | 2.64% | $378,126 | $20,003 |
| Georgia | 5.74% | 2.85% | 2.89% | $335,358 | $19,250 |
| Hawaii | 5.22% | 2.55% | 2.67% | $836,741 | $43,678 |
| Idaho | 5.47% | 2.69% | 2.78% | $482,199 | $26,376 |
| Illinois | 4.90% | 2.49% | 2.41% | $298,871 | $14,645 |
| Indiana | 5.57% | 2.72% | 2.85% | $262,265 | $14,608 |
| Iowa | 5.61% | 2.74% | 2.87% | $241,255 | $13,534 |
| Kansas | 5.61% | 2.74% | 2.87% | $252,794 | $14,182 |
| Kentucky | 5.59% | 2.78% | 2.81% | $235,363 | $13,157 |
| Louisiana | 5.59% | 2.78% | 2.81% | $217,968 | $12,184 |
| Maine | 5.03% | 2.44% | 2.59% | $424,107 | $21,333 |
| Maryland | 5.69% | 2.75% | 2.94% | $436,104 | $24,814 |
| Massachusetts | 5.03% | 2.44% | 2.59% | $672,867 | $33,845 |
| Michigan | 5.91% | 3.09% | 2.82% | $269,972 | $15,955 |
| Minnesota | 5.74% | 2.70% | 3.03% | $356,887 | $20,485 |
| Mississippi | 5.59% | 2.78% | 2.81% | $198,428 | $11,092 |
| Missouri | 5.61% | 2.74% | 2.87% | $271,597 | $15,237 |
| Montana | 5.47% | 2.69% | 2.78% | $476,115 | $26,043 |
| Nebraska | 5.61% | 2.74% | 2.87% | $284,464 | $15,958 |
| Nevada | 5.47% | 2.69% | 2.78% | $448,215 | $24,517 |
| New Hampshire | 5.03% | 2.44% | 2.59% | $522,944 | $26,304 |
| New Jersey | 5.07% | 2.46% | 2.61% | $584,681 | $29,643 |
| New Mexico | 5.62% | 2.85% | 2.77% | $321,186 | $18,051 |
| New York | 4.62% | 2.21% | 2.41% | $525,947 | $24,299 |
| North Carolina | 5.59% | 2.81% | 2.79% | $340,430 | $19,030 |
| North Dakota | 5.61% | 2.74% | 2.87% | $293,556 | $16,468 |
| Ohio | 5.65% | 2.65% | 3.00% | $251,502 | $14,210 |
| Oklahoma | 5.62% | 2.85% | 2.77% | $225,437 | $12,670 |
| Oregon | 5.22% | 2.55% | 2.67% | $504,432 | $26,331 |
| Pennsylvania | 5.71% | 2.83% | 2.88% | $294,099 | $16,793 |
| Rhode Island | 5.03% | 2.44% | 2.59% | $517,078 | $26,009 |
| South Carolina | 5.59% | 2.78% | 2.81% | $309,323 | $17,291 |
| South Dakota | 5.61% | 2.74% | 2.87% | $325,618 | $18,267 |
| Tennessee | 5.59% | 2.78% | 2.81% | $338,769 | $18,937 |
| Texas | 5.61% | 2.87% | 2.75% | $302,999 | $16,998 |
| Utah | 5.47% | 2.69% | 2.78% | $541,692 | $29,631 |
| Vermont | 5.03% | 2.44% | 2.59% | $402,017 | $20,221 |
| Virginia | 6.00% | 2.92% | 3.08% | $419,920 | $25,195 |
| Washington | 5.22% | 2.55% | 2.67% | $603,303 | $31,492 |
| West Virginia | 5.59% | 2.78% | 2.81% | $182,704 | $10,213 |
| Wisconsin | 5.61% | 2.74% | 2.87% | $342,279 | $19,202 |
| Wyoming | 5.47% | 2.69% | 2.78% | $372,526 | $20,377 |
National average commission rate: 5.46% total, including an average 2.70% buyer-side commission and 2.76% seller-side commission.
Commission averages are market estimates and do not represent required, standard, or recommended rates. Actual broker compensation is negotiable. Home-value figures are based on Zillow Home Value Index typical home values as of June 2026 rather than actual transaction sale prices.
Real Estate Agent Fees by State: Highlights
The estimated dollar amount of real estate commissions varies considerably across the country, but much of that difference comes from differences in home values rather than commission percentages alone.
Using the figures above, Hawaii has the highest estimated total commission at approximately $43,678 on a typical home value of $836,741. California follows at about $39,398, while Massachusetts comes in at approximately $33,845.
At the other end of the table, West Virginia has the lowest estimated total at approximately $10,213, followed by Mississippi at $11,092 and Louisiana at $12,184.
The commission rates themselves vary within a much narrower range. Among the state figures included above, New York has the lowest estimated average total commission rate at 4.62%, while Virginia has the highest at 6.00%.
These figures should not be interpreted as standard rates for those states. A transaction involving a higher- or lower-priced property, a different compensation structure, or separately negotiated brokerage agreements could produce a substantially different result.
Can Buyers Negotiate Real Estate Agent Fees?
Yes. Broker compensation is negotiable.
A buyer agreement should explain the amount or rate the buyer broker will receive or describe how that amount will be determined. Under current NAR MLS policies, the compensation must be objectively ascertainable rather than open-ended, and participating brokers cannot receive more compensation from any source than the amount agreed to in the buyer agreement.
Buyers should review the agreement before signing and understand:
- What services their agent will provide
- How the broker's compensation is calculated
- What amount the buyer has agreed to pay
- Whether compensation from another permitted source may offset some or all of that obligation
- What happens if the seller does not offer buyer-broker compensation
State law may impose additional requirements, so the specific agreement and rules applicable to the transaction matter.
Can Sellers Pay a Buyer's Agent?
Yes. A seller can still agree to compensate a buyer's broker.
The 2024 practice changes did not prohibit seller-paid buyer-agent compensation. Instead, they changed how offers of compensation can be communicated through MLSs covered by the changes.
A listing broker or seller may make an offer of buyer-broker compensation outside the MLS when permitted, and the seller must authorize applicable payments or offers of payment in writing.
This means a buyer should not assume either that the seller will pay their broker or that they will necessarily have to pay the entire amount themselves. The actual arrangement depends on the agreements and negotiations involved in the transaction.
Are Real Estate Commission Rates Set by Law?
No. Real estate commission rates are not set by federal law, and broker fees and commissions are negotiable.
There is therefore no legally required 5%, 6%, or other standard commission simply because a property is located in a particular state.
Average commission rates like the ones shown in the table describe observed market estimates. They should not be presented as mandatory rates or as the amount that a consumer is expected to agree to.
What Do Real Estate Agent Fees Cover?
The services covered by brokerage compensation depend on the brokerage agreement and the agent's role.
For a seller, services may include helping price and market the property, coordinating showings, communicating with prospective buyers and their representatives, assisting with offers, and guiding the transaction toward closing.
For a buyer, an agent may help identify properties, arrange tours, analyze market conditions, prepare and negotiate offers, coordinate parts of the transaction, and guide the buyer through the purchase process.
The specific scope of services should be established in the agreement between the consumer and the brokerage.
Understanding Broker Fees Before a Transaction
Understanding how broker compensation works is important for both real estate professionals and their clients. Rather than assuming that the seller always pays every agent involved, buyers and sellers should discuss compensation early and review their agreements carefully.
Real estate professionals should also make sure clients understand what services are being provided, how compensation is determined, and what financial obligations the client has agreed to before moving forward.
The numbers in this guide can provide a general picture of how commission amounts vary around the country, but actual fees depend on the property, brokerage agreement, negotiations, and transaction.
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