One of the most complex aspects of being a real estate agent is managing your pay. Unlike most jobs where you collect a steady paycheck, agents work entirely on commission. You only get paid when you’re part of a transaction — helping someone buy, sell, or rent a home — and even then, the money doesn’t always come right away. It’s common to experience some “salary downtime” between deals.

Commission structures can vary by brokerage and are always negotiable, but there are some common ways that commissions work for agents in New York City. Here’s how commissions are typically handled for NYC agents working with buyers, sellers, or renters.

How brokerages get paid

In sales, brokerages make money by taking a cut of the commission tied to a transaction, which is usually a percentage of the home’s sale price. That money flows through the brokerage before going to the agent.

In a typical sales deal, the seller agrees to pay a commission to the listing agent’s brokerage (listing brokerage). If another agent represents the buyer in the transaction, the listing agent’s brokerage shares a portion of that commission with the buyer agent’s brokerage (often around half, though it can vary). From there, the agents’ respective brokerages pay the agents based on their split, and keep the remaining portion as its revenue. That retained portion is how the brokerage makes money on the deal.

In some cases, a buyer may agree to pay their agent directly for representation. But in NYC, it’s still more common for the seller to cover both sides of the deal through the total commission.

Following the National Association of REALTORS® (NAR) settlement in 2024, transparency and agreement on these terms is required upfront, with clarity that the terms are negotiable. Buyer agent compensation can no longer simply be assumed or broadly advertised in the same way — instead, the commission structure must be clearly negotiated and agreed upon by all parties: the buyer, seller, and their respective agents. As such, it’s important to clarify who is paying the buyer’s agent (and how much) before moving forward with a transaction. Buyer’s agents can do so by introducing a touring agreement and a buyer representation agreement, and following our tips for discussing buyer agent commissions with clients.

For rentals, the answer used to be more straightforward: tenants would typically pay the broker’s fee (commission). But that’s no longer the default.

Sales commissions: How buyer’s and seller’s agents get paid

When a home is sold, the seller typically signs an agreement with the listing brokerage that outlines the commission structure. While 6% was historically common in some markets, the reality is that commissions are fully negotiable and can vary depending on the brokerage, market, and property.

Again, the listing brokerage often shares a portion of that commission with the buyer’s agent, and both agents are paid through this split rather than directly by the buyer or seller. While a 50–50 split is common, it’s not guaranteed.

If both firms are members of the Real Estate Board of New York (REBNY), there are established co-brokerage rules, including a requirement that at least half of the commission be offered to the buyer’s side. Outside of REBNY, agents need to agree on commission terms ahead of time, especially when working with new developments or non-member firms. In For Sale By Owner (FSBO) arrangements, sellers may offer a commission (often around 2% to 3%) to the agent who represents the buyer.

As for timing, commissions are typically paid after closing, once the transaction is complete and the brokerage has received its funds. That means getting from signed contract to closing — including financing and co-op or condo board approvals — is a critical part of earning your paycheck.

Rental commissions: What changed under the FARE Act

For years, the NYC rental market stood out because tenants were often expected to pay broker fees (rental agent commissions), equaling as much as 15% of the annual rent.

As of June 2025, that’s no longer the case, when the Fairness in Apartment Rental Expenses (FARE) Act fundamentally changed how rental commissions work. The core idea is simple: whoever hires the broker pays the broker.

In practice, that means if a landlord hires a broker, the landlord is responsible for the broker fee. Brokers representing landlords can no longer charge tenants a broker fee to rent these apartments. Tenants only pay a broker fee if they choose to hire their own broker.

How rental agents get paid

Even though who pays has changed, how rental commissions are calculated, split, and paid is still similar behind the scenes.

Fees are often still structured as a percentage of the annual rent, or as a flat amount (such as one month’s rent). Once that commission is paid — now typically by the landlord — it flows to the brokerage, which then pays the agent based on their split. If two agents are involved in a rental deal, the total commission is commonly divided between the brokerages and then paid to the agents, similar to a sales transaction.

Once again, a major operational change is around transparency. Under the FARE Act, all tenant-paid fees must be clearly disclosed upfront in listings and agreements, preventing surprise costs at lease signing. The FARE Act didn’t eliminate broker fees entirely — it changed who pays them.

The bottom line

Whether you’re working with a buyer, seller, or renter, one thing remains constant: commissions are negotiable, and transparency is paramount. Always clarify (including with your brokerage) how you’re getting paid, who’s paying you, and when — before moving forward.
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Disclaimer: This article is for informational purposes only and does not constitute legal advice. Commission rules, regulations, and industry practices are subject to change. Consult a licensed real estate attorney or your brokerage’s compliance team for guidance specific to your situation. REALTORS® is a registered trademark of the National Association of REALTORS®.