# Real Estate Agent Fees and Closing Costs Explained
Real estate agent commissions sit outside traditional closing costs, though sellers often pay them at closing. The distinction matters for buyers and sellers planning their finances.
Agent commissions typically run 5% to 6% of the home's sale price, split between the seller's agent and buyer's agent. Sellers pay this bill directly from proceeds at closing. Buyers don't write a separate check for agent fees. The commission comes from the sale amount before the seller receives their net proceeds.
Closing costs differ from agent commissions. Closing costs include title insurance, appraisal fees, loan origination fees, property taxes, and homeowners insurance. Buyers typically cover $8,000 to $15,000 in closing costs on a $300,000 home purchase. Sellers face their own closing costs, usually 1% to 3% of the sale price.
The breakdown shifts negotiating power. In buyer's markets, sellers sometimes cover buyer closing costs to sweeten deals. Agent commissions rarely budge, though some discount brokerages offer reduced rates.
Understanding this separation helps both parties budget accurately. Sellers should expect 8% to 10% of the sale price to cover commissions and closing costs combined. Buyers need to factor closing costs separately from any down payment or offer negotiations.