Real Estate Commissions in New Jersey

Buying a home is an expensive process, and one of the most significant expenses you’ll pay is often your real estate agent‘s commission. When you consider the fact that each agent involved in a transaction typically earns 2.5 to 3 percent of the home’s sale price, the total cost of commissions can be hefty. On a $400,000 home, for instance, a full 6 percent comes to $24,000. And according to Redfin data, the median sale price for a home in New Jersey as of February 2025 was actually much higher at $520,700 — 6 percent of that is more than $31,000.

However, while it used to be that the home seller paid both commission fees out of their sale proceeds, these days each party may pay their own agent directly. Here’s a closer look at real estate commissions in New Jersey and how much you can really expect to pay, no matter which side of the transaction you’re on.

How much are real estate commissions in New Jersey?

In New Jersey, as in the rest of the country, real estate commissions are usually calculated as a percentage of a home’s sale price. To get a better picture of how much that might add up to, let’s take a closer look at homebuying costs in New Jersey.

According to Clever Real Estate, the average total cost of agent commissions in New Jersey is 5.07 percent of the home’s sale price. On a median-priced $520,700 home, then, a 5.07 percent commission would total $26,399.

But that’s the price for both agents combined. Clever’s data shows that the total is not split perfectly evenly between New Jersey listing agents (representing the seller) and buyer’s agents. The average percentage for the listing agent is 2.55 percent, which for a median-priced home would come to $13,278. The average buyer’s agent, meanwhile, gets 2.52 percent, which translates to $13,122.

If you’re buying or selling a home in the Garden State, it’s also important to note that home prices vary widely from city to city — especially in beach towns or in the New York City suburbs. Here are what the commissions would look like in a few different New Jersey locations, assuming the percentages above.

What’s included in a real estate agent’s commission?

Real estate agents do a lot to earn their fee, whether they’re working on the buyer’s behalf or the seller’s. When supporting a seller in the deal, the agent provides critical guidance determining how much a home is worth, using local market trends and data on comparable home sales to develop the most competitive list price. Once the home has been listed, the agent will market the property, host open houses and private showings and help to negotiate the best purchase price possible. On top of all of this, the agent will handle the paperwork associated with the closing process — which is not insignificant.

On the buyer’s side of the deal, the services a real estate agent performs are not limited to identifying properties that align with their client’s budget and lifestyle. In addition, they will schedule and coordinate property visits and negotiate price and contract terms on the client’s behalf. And, like a seller’s agent, a buyer’s agent will also help their clients through the closing process and paperwork.

Who pays agent commissions in New Jersey?

Whether it’s New Jersey or any other state, the terms of the deal will dictate who pays the agents’ commissions. That was not usually the case however, before 2024. Historically, the total cost of commissions for both agents was taken out of the seller’s proceeds from the sale of a home. But a federal lawsuit settlement changed that, and now, the responsibility for commission payments is negotiated in advance. Depending on the terms agreed upon, each party may pay their own agents directly, or the seller may agree to pay some or all of the buyer’s agent’s fee as a concession. Whatever option is decided, it’s important that it be spelled out clearly in the sale contract to avoid misunderstandings.

Are New Jersey real estate agents worth it?

There is no law requiring Garden State home sellers, or buyers, to work with a real estate agent. But, while it might be nice to save the money you’d spend on a commission, ask yourself whether you have the time, market savvy and negotiating skills to navigate the process on your own.

Whether hiring an agent is worth it for you depends on your needs and goals. If you’re a seller who wants to secure as much profit as possible, then the cost of a knowledgeable real estate agent who really understands your market can be a good investment. Similarly, for buyers, it can be worth the price to have expert guidance in finding the right home and getting the best deal possible on it, particularly in a very competitive market.

Saving on fees

Given how costly commissions can be, you may be wondering how you can save some money. There are various options to consider:

• Negotiate the commission: The real estate industry is all about negotiation, and that can include commission rates. Ask an agent whether they are open to lowering their rate in order to land your business. Even a modest reduction can result in significant savings for a transaction as significant as a home purchase, especially in a high-priced state like New Jersey.
• Consider discount agents: You could also opt to work with a low-commission agent from a discount brokerage like Redfin or Clever. Some charge fees as low as 1 to 1.5 percent. Flat-fee agents are yet another alternative — they charge a fixed rate for their services, as opposed to a percentage of the sale price.
• For sale by owner: Home sellers who want to eliminate an agent’s commission altogether can choose the “for sale by owner” route. This approach means you will be the one doing all the work associated with selling your home, including determining the best list price, marketing the property, hosting showings and negotiating the price and contract terms. In addition, you will have to navigate the closing process, which can be complex. If you opt for this type of sale, it’s smart to work with a local real estate attorney who can make sure your interests are properly protected.
• Cash homebuyer: Working with a cash-homebuying company in New Jersey eliminates the cost of commission as well, as these businesses purchase homes directly from the homeowner with no agent involved. They move exceptionally fast, too, and often cover all closing costs. There is a major downside, though: These companies typically do not pay full market value, so you’ll save some money but you’ll also sacrifice some profit.

Find a New Jersey real estate agent

Finding a New Jersey real estate agent you can trust is important. If you haven’t worked with an agent before, it can be a good idea to ask friends or family for a referral. It’s also helpful to look for signs around your neighborhood, or the neighborhood you’d like to move to, so you can take note of agents who already know the area. Before making a decision, interview a few candidates to find someone who’s a good fit.