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How Much Does a Realtor Cost?

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How Much Does a Realtor Cost?

Are you looking to buy or sell a home? Congrats on the move! You’re probably wondering what the costs are and if a realtor might be worth it. In this post, we’ll detail the costs associated with having a realtor, the benefits they can provide, and more!

Realtor Cost For Buyers:

Having a realtor as a buyer won’t cost you a penny. That’s right, realtor commissions are paid by the seller so there’s no reason to avoid a realtor as a buyer.

If a home is listed “For Sale by Owner” and you have a realtor, you will have to negotiate with the seller on who will pay for your realtor, or move forward on the deal without your realtor. If you decide to keep your realtor involved, you should make the homeowner aware and ask them to consider paying the realtors commissions. It is very common for homebuyers to have realtors, so typically homeowners won’t bat an eye when negotiating with realtors.

Realtor Cost For Sellers:

A realtor will cost you as a seller. Typically, a realtor will take 6% of your home’s selling price. This money gets split up in several different ways. The buyer’s realtor will take 3% with each of the agencies raking in half of that amount.

For example, if your homes selling price is $300,000, your realtor’s commission will cost $18,000. With the buyer’s realtor getting $9,000 and your realtor getting $9,000.

Are realtor costs tax-deductible?

When you sell your home, you might be wondering if your realtor costs are tax-deductible. And like most things tax-related, the answer is not a simple yes or no. It depends on several different situations. We’ll outline the taxes associated with selling your home below!

Is your home sale considered a “Capital Gain”?

If you’ve owned the home you’re selling for more than 1 full year, the amount over what you paid for the home originally is considered capital gains. If you sell the home for less than the original purchase price, this would be considered a capital loss.

If you’ve owned the home for less than one year, the difference is taxed at your ordinary-income tax rate, which is typically a higher rate than your capital gains tax rate. This is called a short term capital gain.

Why do Capital Gains Matter?

Current tax law typically allows you to exclude capital gains of $250,000 or less (or $500,000 on a joint tax return) if you’ve lived in the home for 2 out of the past 5 years.

Your realtor costs ARE deductible if you are forced to pay short term capital gains tax.

Your realtor costs ARE NOT deductible if you do not pay capital gains taxes on your proceeds.

Benefits of Having a Realtor for Buyer:

Because there is no cost of having a realtor as a buyer, it won’t hurt to have your realtor be on the lookout for you!

Access to more listings

Realtors can access more listings through a Multiple Listing Service (MLS). This service compiles listings from many different sources and can be tailored so that you only see homes that include your needs.

Location knowledge

When buying a home, one of the most important criteria for many people is the location. It could be the distance from your work, the quality of local schools, or the number of reported crimes that matter to you and your realtor can find all of this information and more.

Stronger negotiations

Your realtor is there to mentor you throughout the purchase process. He or she will guide you when deciding how much to offer (should you decide to) by researching recent comparable home sales in the area. If your offer is accepted, they will help to negotiate any repairs that need to be completed after your homes inspection.

Benefits of Having a Realtors for Sellers:

Having a realtor as a seller can be expensive. But it does come with many benefits.

Higher selling price

Homes with a listing agent sell for as much as 25% more than a home for sale by owner! That’s a nice chunk of change considering you’ll only pay 6% in commissions.

Just as the buyer’s realtor will negotiate the price of the home, so will your selling agent. They are there to help you maximize your homes selling price.

More connections

Relators can bring people to your home. They are able to use their network to attract potential clients to your listing to get your home sold quicker.

Faster closing

Having a realtor can speed up the closing process. Your realtor will handle all of the paperwork for you making it simpler for you to get documents signed and returned which will ultimately speed up the entire closing process.

Should I get a Realtor?

Having a realtor makes sense 70% of the time when selling a home and 99% of the time when buying a home. The best reason to not have a realtor is if you’re trying to trim down your selling costs or plan to purchase a home from an FSBO (For Sale By Owner).


As a seller, a realtor will typically cost you 6% of your homes selling price. As a buyer, there is no cost of having a realtor as it is paid for by the seller. Having a realtor comes with many benefits. For buyers, they can provide knowledge about the location of a home, how much you should offer, and they can give you access to more listings. For sellers, a realtor can improve your homes selling price, find potential buyers faster, and take the stress out of your home sale by handling most of the paperwork for you.

Ready to sell your home? Read these tips to get your house ready to sell quickly or8 ways to improve your home’s curb appeal!

Forrest is a personal finance, entrepreneurship, and investing enthusiast dedicated to helping others obtain life long wealth. He owns several different blogs and is also passionate about health and fitness.


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