Last updated on July 6th, 2025 at 12:36 pm
Texas Real Estate Commission
How the 6% is Split Among All Parties
Completely Negotiable • Paid by Seller
Commission Breakdown Example
MLS listing only, save thousands
Companies like Redfin
*May still pay buyer's agent
Key Facts
So you want to become a Texas real estate agent but are unsure how much it will cost you? It can be difficult to figure out your income as many real estate agents get their compensation via a Commission.
Instead of receiving a monthly check for the same amount, real estate agents receive a percentage of each house sold by their clients.
What is the average commission rate for a real estate agent
The typical real estate commission in Texas is 6% of the home’s sale price. While there’s no legally mandated rate, this has become the industry standard. However, sellers should know that commission rates are completely negotiable.
Agents always have their calculators ready when determining how much money they will earn from any real estate transactions.
Who Pays the Commission?
- Sellers typically pay all commission fees from the proceeds of the sale
- Buyers rarely pay commission or closing costs directly
- In competitive markets, cash buyers may occasionally cover some costs like surveys
- Commission fees are usually built into the home’s asking price
How the Payouts Work
The 6% commission doesn’t go to one person—it’s divided among multiple parties involved in the transaction:
The Four-Way Split
- Listing Agent (represents the seller)
- Listing Broker (sponsors the listing agent)
- Buyer’s Agent (represents the buyer)
- Buyer’s Broker (sponsors the buyer’s agent)
Commission Split Example
Let’s break down a $200,000 home sale with a 6% commission:
- Total Commission: $12,000 (6% of $200,000)
- Split between listing and buying sides: $6,000 each
- Further split between agents and brokers: $3,000 each party
Final breakdown:
- Listing Agent: $3,000 (1.5%)
- Listing Broker: $3,000 (1.5%)
- Buyer’s Agent: $3,000 (1.5%)
- Buyer’s Broker: $3,000 (1.5%)
Note: Split percentages are negotiable and may vary by brokerage.
Ways a Seller Tries to Avoid Paying a Commission
Discount Brokers
Some brokerages offer reduced-rate services:
- Flat MLS listing fees instead of percentage-based commissions
- Can save sellers thousands of dollars
- May offer limited services compared to full-service agents
If you are a home seller and want to be listed on the MLS but don’t want to pay the full realtor fee, you can use the services of discount brokers who will make you a deal.
Learn more about agent fees and how they work.
Once home sellers figure out that the only way to avoid paying fees to is to go FSBO, they usually will try to sell on their own.
However, this means they won’t be able to list their home on the MLS.
Modern Brokerages
Companies like Redfin offer:
- 1.5% commission rates for listing services
- Combined broker and agent services
- Potential service quality trade-offs
- Limited MLS access in some markets
For Sale By Owner (FSBO)
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What is FSBO? For Sale By Owner (FSBO) means selling your home without hiring a real estate agent. Instead of paying a listing agent’s commission, homeowners handle all aspects of the sale themselves.
FSBO Process:
- Sellers set their own listing price and marketing strategy
- Handle all showings, negotiations, and paperwork
- Coordinate inspections, appraisals, and closing procedures
- May still need to pay buyer’s agent commission (typically 2.5-3%)
FSBO Pros and Cons:
- Advantages: Save on listing agent commission, maintain full control over the process
- Disadvantages: Cannot access MLS listings, limited marketing reach, time-intensive, legal complexity
- Reality Check: Most FSBO sellers eventually hire an agent due to the complexity involve
Bottom Line
Real estate commissions in Texas follow industry standards but remain negotiable.
Have a house you want to sell without paying commissions. Contact Bodebuilders today.
Frequently Asked Questions
Realtors are paid at closing. They receive payment in the form of a check or a wire from the title company.
All realtors are real estate agents, but not all real estate agents are realtors. To be a realtor you must join the realtor association.
The homeowner is usually the one who pays the commission. And this comes during the closing.
The number is determined by the sales price of the home.
They are typically paid at closing. This usually occurs at the Title Company where all the paperwork is signed.