How Much Does a Real Estate Agent Cost? Is It Worth It?

Whether you’re buying or selling a house, you’re dealing with a huge amount of money. This isn’t a surprise! But just one mistake during the home-buying or home-selling process (if you try to do it yourself) could cost you tens of thousands of dollars—and cause plenty of stress too. And that’s no fun. So, it’s no wonder why nearly 90% of all buyers and sellers choose to work with a real estate professional.¹ Don’t you feel a sense of relief when you think of a pro taking care of the nitty-gritty details? Whew! But how much does a real estate agent cost? More importantly, is it worth it?

Sit back, and I’ll unpack all the costs and benefits of hiring a real estate agent.

How Much Does a Real Estate Agent Cost?

It's common for real estate agents to be paid a commission (for example, 3% of a home's purchase price) for helping you close on a home. In some cases, sellers might offer to cover part or even all of what it costs buyers to work with their agent to sweeten the deal, and to thank the buyer's agent for helping find someone to purchase their home.

For example, if a house sells for $400,000, the seller’s agent and buyer’s agent might get $12,000 each (if they both charge a 3% commission for their services). That’s a pretty hefty fee, right? And if you’re like me, you probably want fees that big to be for a good reason.

But every situation is different. So be sure to talk about any specific rules related to this with your agent. And find out exactly what an agent charges for their services so you know what your maximum potential costs could be before you commit to working with one.

So, let’s find out if hiring a real estate agent is worth it.

Is Hiring an Agent Worth the Cost?

Okay, time to answer the question you came here for! Are real estate agents worth the cost? That’s a big y-e-s yes. I’ll explain why.

The Value of a Buyer’s Agent

When you use an agent as a buyer, you have someone working for you who sees hundreds of houses a year and helps tons of families find their next home. What are some of the advantages of using a buyer’s agent?

• Helps you find the right house in the right neighborhood
• Catches red flags and won’t let you overpay or miss out on the home you love
• Negotiates the best deal on your behalf

The Value of a Seller’s Agent

Now how about you sellers out there? Here’s how an agent can help you.

• Gives you peace of mind when it comes to selling your biggest asset
• Provides market expertise and helps you price your home right
• Handles the marketing of your home and sets up showings with potential buyers
• Helps you pick the best offer and negotiate the best deal

Okay, that all sounds great. But you might be wondering, What’s the difference between a real estate agent and a REALTOR^®? Well, they all help clients buy and sell houses. The difference is, REALTORS^® are members of the National Association of REALTORS^® (NAR). REALTOR^® is the trademarked name the NAR gives its agents. Put simply: All REALTORS^® are real estate agents, but not all real estate agents are REALTORS^®. Either one is fine! Just make sure you find a real estate agent or REALTOR^® you can trust to serve you with excellence (no amateurs or newbies).

Who Pays Agent Fees in a For Sale by Owner (FSBO) Deal?

Maybe you’re dreaming about how much cash you could save if you sell your house yourself.

Find a trusted real estate agent we recommend in your area.

Hey, that’s a totally valid question! And I love saving money too. But the reality is, you might be disappointed at how little you can actually save without an experienced real estate pro walking you through the process.

Just imagine walking into your dentist’s office and trying to clean your teeth yourself with all those metal tools. No thanks! I’ll leave my pearly whites to a pro who spent years in school and has cleaned thousands of teeth. The same logic goes for buying or selling a house.

If you are thinking about not using an agent and going the For Sale by Owner (FSBO) route, I want you to hold your horses and check out these stats first. The latest data shows the typical FSBO home sold for $310,000 compared to $405,000 when sold by an agent.² That’s a $95,000 difference!

Sure, $12,000–24,000 of that might go toward the agent commissions (depending on what your agent charges and whether you offer to cover any costs of the buyer’s agent). But that’d still leave you with at least $70,000 more than you’d make selling it by yourself. Cha-ching! And even if that difference is only half right ($47,500) in your particular market, you could still come out at least $23,000 ahead by using an agent. Guys, that’s a big deal.

What Does a Real Estate Commission Cover?

A real estate commission might be something like 3% of a home’s purchase price, and that covers all the work that goes into helping a buyer or a seller close on a property. Trust me, a great agent does a lot to help you buy or sell a house.

A seller’s agent shows you how to stage and style your home for buyers and—since they know what similar homes in your area are selling for—they help you price it competitively. They also market your home so a ton of buyers will see it using a multiple listing service (MLS), social media and ads. I know—it’s like a personal marketing campaign for your house! This helps you sell your home fast and for top dollar.

Meanwhile, a buyer’s agent studies and regularly reviews home listings to help you find a home that checks off all the boxes on your list. (Or at least most of the boxes.) They’ll show you the best options and when you find a house you like, they’ll help you write up an offer.

Once you have a home under contract, a buyer’s agent will arrange a home inspection and oversee any necessary repairs or contract changes so you don’t get a bad deal or miss any important details in the small print.

Beyond those differences, both types of agents give you the confidence that a real estate professional is on your side, and they offer plenty of similar services. For example, both agents:

• Meet with you in person to understand your needs and answer any questions you have
• Educate you on current market conditions
• Give you access to an MLS—which offers more options to buyers and visibility to sellers
• Refer other needed pros (mortgage lenders, photographers, inspectors, attorneys)
• Schedule home showings
• Negotiate the best price for you
• Represent you throughout the sale and act in your best interest
• Help you through the mountain of paperwork

A good agent tackles these tasks day in and day out. Their experience helps you avoid rookie mistakes. Sure, you can try to handle all these things by yourself. But when you’re sitting in the hot seat of a real estate transaction, you’ll realize pretty fast that agents are worth their weight in gold.

How Much Do Real Estate Agents Make?

All the factors that go into closing a real estate deal can be vastly different, which impact how much an agent charges for their services. So, it’s hard to say how much an agent makes on average. But as I’ve mentioned before, the most common way for an agent to get paid is through a commission (for example, 3% of a home’s sale price). And if you have good reason to do so, you might even be able to negotiate the cost of your real estate agent. Keep in mind, they don’t just take their whole commission check straight to the bank. They give part of their commission to their brokerage—not to mention the money they spend on photographs, gas, marketing, licensing, and office fees.

Okay, Rachel, but what does that look like in actual dollars? Top agents can earn six figures, easy. But bad agents who don’t move properties will struggle to make ends meet.

How Do Real Estate Agents Get Paid?

Remember, it’s common for an agent to get paid by commission at the end of the home deal as part of the closing costs. If the seller offered to cover some or all of the buyer’s agent fees, both commissions would likely come out of the sale proceeds. If not, the buyer would need to be prepared to pay for their own agent’s fees separately—an amount that should be clearly outlined in a buyer’s agent agreement before the buyer ever starts working with an agent.

Find an Agent Who’s Worth Every Penny

Trust me, a good agent is worth the cost. But make sure you know how to find an agent with solid experience. Hiring a friend or family member who’s new to real estate won’t cut it. In fact, I’m going to go ahead and tell you not to do it! They can learn the ropes with someone else’s money. You need a pro with a long history of success. And I know where you’ll find an experienced agent in your area who shares your financial values and will walk you through the process step by step.

Our team instantly connects you with the top-performing real estate agents in your area for free. How do we know they’re top performers? Our team weeds out the duds and only recommends agents who match our high standard of excellence—that’s why we call them RamseyTrusted^®.

Find a real estate agent today!

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