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 -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 over 80% 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? Maybe you’re dreaming about how much cash you could save if you sell your house yourself.

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 the pros. Someone who spent years in school and has cleaned thousands of teeth. The same logic goes for buying or selling a house.

So 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?

Before you decide to hire a real estate agent, let’s look at how they get paid. The standard commission for a real estate transaction is usually 6% of the home’s sale price divided up between the seller’s agent and buyer’s agent. But get this—you don’t actually have to pay real estate agents if you’re buying a house! Traditionally, the seller pays the entire commission. Nice.

So, if you sell your house for $250,000, the agents might get a total of $15,000. 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.

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 . . . since sellers cover the commission for both agents, as a buyer you have nothing to lose! That calls for a glass of champagne.

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?

• An agent will help you find the right house in the right neighborhood.
• An experienced agent should spot any red flags and have a much better idea of how much the home you love is worth.
• An agent will be in your corner when it’s time to negotiate on price or repairs.

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

• A seller’s agent gives you peace of mind when it comes to selling your biggest asset.
• An agent who sells lots of homes will know the market and help you price your home right.
• An agent will market your home and set up showings with potential buyers.
• An agent will help you handle offers and negotiate with buyers.

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.

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If you’re thinking about not using an agent and going the For Sale by Owner (FSBO) route, I want you to take a quick beat and check out these stats first. The latest data shows the typical FSBO home sold for $225,000 compared to $345,000 when sold by an agent.² That’s a $120,000 difference!

Sure, about $21,000 of that would go toward the agent commissions. But that’s still almost $100,000 more than you’d make selling it by yourself. Cha-ching! And even if that difference is only half right ($60,000) in your particular market, you could still come out $43,000 ahead by using an agent. Guys, that’s a big deal.

What Does a Real Estate Commission Cover? How Much Commission Does a Real Estate Agent Make

A 6% real estate commission covers all the work that goes into buying and selling 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 for your area. 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 get your home sold 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?

Buyers’ and sellers’ agents only get paid at closing. They work 100% for commission. And they only get their portion of the commission if their client buys or sells a home.

So, how much does a real estate agent make? 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?

It’s standard practice for the seller to cover the commission for both the seller’s agent and buyer’s agent. So, if you’re buying a home, you might get all the benefits of using an agent for free. The commission is paid at the end of the deal as part of the closing costs and comes out of the sale proceeds.

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 don’t 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 RamseyTrusted real estate agents are here to help. We’ll instantly connect you with the top-performing real estate agents in your area for free. From there, you can interview them and ask them questions to decide which agent gets to help you buy or sell a home.

Find a real estate agent today!

Interested in becoming one of our RamseyTrusted real estate agents (previously known as Endorsed Local Providers, or ELPs)? Let us know.

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