Understanding Real Estate Commissions: What Buyers and Sellers Need to Know in 2026

Commissions Are Down, or Are They?

In addition to the recent NAR settlement, several other factors are influencing real estate commissions—factors that could significantly affect you whether you're buying or selling.

What Are Real Estate Commissions?

Real estate commissions are fees paid for the services of agents when buying or selling a home. These do not include other costs, such as title or closing fees. Traditionally, the seller has paid both the buyer's agent and the listing agent's commissions. In the past, the average total commission for selling a home was around 6%, with 3.2% going to the listing agent and 2.8% to the buyer's agent.

Recent Trends in Commission Rates

Redfin, a prominent online real estate brokerage, reports that the average commission earned by buyers' agents has dropped from 2.62% to 2.55% in recent years. But why? While the obvious answer might be the recent NAR settlement—and that is part of it—there's more to the story. There have always been sellers who refuse to pay a buyer's agent commission, or any commission at all, so the settlement isn't the sole factor.

In fact, commission rates have been declining for some time, long before the recent settlement. For the past decade, the real estate market has been strong, making it easier for people to enter the business and sell homes. However, this period of ease is coming to an end. Many agents lack the skills or knowledge to truly benefit their clients. How do these agents stay competitive? They lower their commissions to attract buyers and sellers. The rise of discount brokerages and agents willing to work for lower commissions is one of the driving forces behind this trend.

The Impact of Commission Rates on Your Home Purchase or Sale

Let's break this down for both buyers and sellers:

For Sellers: At first glance, choosing the lowest commission might seem like the best option when selling a property. However, much like cutting your own hair, it's a service best left to professionals unless you have the expertise. While anyone can technically sell a home, negotiating and selling it for the highest price requires a different level of skill. Sellers tempted to work with discount brokerages or less experienced agents should understand the difference between price and cost. Price is the amount you pay upfront, while cost refers to what you might lose by making the wrong decision—whether in time or money. From initial offers to inspection negotiations, tens of thousands of dollars can be left on the table by unskilled agents every day.

For Buyers: In the near future, buyers may have to pay their own agents or even purchase properties without one. This makes selecting the right agent critical—especially for first-time buyers who aren't using equity from a previous property. If a buyer has to pay a 3% commission to their agent, a skilled agent can save them money, just as a strong listing agent does for sellers. Without the right agent, you might find yourself paying the price in more ways than one.

Bottom Line

Commissions are coming down for the majority of listing and buyer agents, but this trend may not benefit consumers. There will likely be a large exodus of unskilled agents who can't sustain themselves financially, though some will survive. Make sure that the real estate professional you choose is just that—a professional. Think twice before selecting an agent simply because they offer to help you for "free."