Realtor Commissions in New York: What the Listing Agreement Really Says

Most articles about “what percentage realtors make” are written for consumers and recycle the same outdated rule of thumb. This page is written from a different vantage point — that of a New York real estate attorney who reviews listing agreements and litigates commission disputes. The commission you pay is not just a number; it is a contractual obligation governed by the terms of the agreement you sign and by New York law. The 2024 National Association of Realtors (NAR) settlement materially changed how those terms work, and getting them wrong can cost a seller or buyer tens of thousands of dollars.

This page is provided for general information and is not legal advice. Reviewed by Albert Goodwin, Esq., Law Offices of Albert Goodwin, a New York real estate attorney.

The honest answer: there is no fixed commission rate in New York

Real estate commissions in New York are not set by statute, regulation, or any “standard” rate. They are entirely negotiable and always have been — fixing or coordinating rates among brokers can raise antitrust concerns. Historically many New York City listings were marketed at a 5% to 6% total commission, but that figure was never a legal requirement, and treating it as a default is now both inaccurate and, after the 2024 NAR settlement, contractually obsolete.

What actually controls the commission is the language of your listing agreement. As a lawyer, that is where I focus: not on the headline percentage, but on how the commission is calculated, when it is earned, who pays it, and what happens if the deal never closes.

What changed after the 2024 NAR settlement

In August 2024, the practice changes from the NAR antitrust settlement (arising from Burnett v. National Association of Realtors and related litigation) took effect nationwide, including New York. Two changes matter most:

• No more assumed buyer-agent commission in the listing. Offers of compensation to a buyer’s broker can no longer be advertised on the Multiple Listing Service (MLS). The old model — where a seller listed at, say, 6% and the listing broker automatically promised half to whoever brought the buyer — is no longer the default. Any compensation to a buyer’s agent now has to be negotiated and documented separately, often as a concession in the purchase contract.
• Written buyer-broker agreements are now required. A buyer’s agent must have a signed agreement specifying their compensation before showing homes. Buyers can no longer assume their agent’s fee is invisibly covered by the seller — it is now an explicit, negotiable term that may fall on the buyer if the seller declines to contribute.

The practical effect: commission is now a negotiated line item on both sides of the deal. For sellers, this means you should not simply accept a single bundled percentage that quietly includes a buyer-side payout you never separately agreed to. For buyers, it means reviewing what you have committed to pay your own agent before you fall in love with a property.

Commission clauses a New York attorney reviews in your listing agreement

When I review a listing agreement, the percentage is the smallest part of the conversation. The clauses below decide whether that percentage is fair and enforceable.

Exclusive right to sell vs. exclusive agency

These two phrases look similar and have very different consequences:

• Exclusive right to sell: the broker earns the commission if the property sells during the listing period — even if you, the owner, find the buyer yourself.
• Exclusive agency: the broker earns the commission only if a buyer is procured through the broker; if you sell it on your own, no commission is owed.

Most listing agreements presented to sellers are “exclusive right to sell.” Sellers frequently sign without realizing they have given up the ability to bring their own buyer commission-free.

How and when the commission is “earned”

Under New York law, a broker generally earns a commission when they produce a buyer who is “ready, willing, and able” to purchase on the seller’s terms — not necessarily at closing. A poorly drafted clause can leave a seller owing a commission even if the buyer later backs out. A well-drafted clause ties payment to actual closing of title. This single distinction is the source of many commission disputes I see.

Protection (“tail”) periods

Most listing agreements contain a protection or “holdover” clause: if you sell within a stated number of days after the listing expires to someone the broker introduced, the commission is still owed. Sellers should negotiate the length of this period and insist that it apply only to named, registered prospects — not anyone who ever walked through an open house.

Commission survival if the deal collapses

What happens to the commission if the deal falls apart — a failed mortgage contingency, a failed inspection, or a buyer who simply walks away? The answer depends on the contract language and on whether the broker performed. We address the related question of failed transactions on our pages about failure to close and earnest money disputes.

New York agency disclosure law: RPL §443

Commission and agency are inseparable, and New York regulates agency disclosure tightly. Under New York Real Property Law §443, a real estate licensee must provide buyers and sellers with a written agency disclosure form explaining whom the agent represents — seller’s agent, buyer’s agent, broker’s agent, dual agent, or dual agent with designated sales agents — at the first substantive contact. The form must be signed and retained, and the New York Department of State (DOS) enforces these requirements against licensees.

Why does this matter for commission? Because the agent’s disclosed role determines the loyalty you are owed and frames what compensation is appropriate. Dual agency — where one broker represents both sides — raises distinct legal and disclosure issues that we cover separately on our page about dual agency rules. Do not assume that paying one combined commission to a dual agent automatically means you received independent representation.

How commission disputes are litigated in New York

When a broker claims a commission an owner does not believe is owed, the dispute typically turns on three questions: (1) Was there a valid, enforceable listing or compensation agreement? (2) Was the broker the “procuring cause” of the sale? (3) Were the conditions for earning the commission met under the contract’s terms? New York courts examine the written agreement closely, which is precisely why the clauses above matter so much.

A licensed New York real estate broker may also, in certain commercial contexts, assert a broker’s lien under New York’s broker lien statute to secure an earned commission against the property. These remedies make it all the more important that the underlying commission terms be reviewed before, not after, a dispute arises. We assist brokers and owners on both sides through our work for real estate brokers and in real estate contract breach matters.

How commission fits into your total cost of selling

Commission is the largest single transaction cost for most sellers, but it is not the only one. New York City and State transfer taxes, the so-called “mansion tax,” and other line items also affect your net proceeds. For a fuller picture of what comes out at the closing table, see our overview of closing costs in New York.

If you are considering selling without a broker to avoid commission entirely, the legal mechanics of doing so — and the role an attorney plays in place of a listing agent — are addressed on our for sale by owner closing attorney page rather than repeated here.

Why a commission question is really a contract question

“What percentage do realtors make?” sounds like a simple consumer question. In practice, the number on the listing agreement is far less important than the legal terms surrounding it: when the commission is earned, what happens if the deal dies, how long a protection period runs, whether you can bring your own buyer, and what the agency disclosure form actually committed you to. After the 2024 NAR settlement, buyers and sellers can no longer rely on industry custom to fill in those terms — the terms must be negotiated and written down.

In New York, attorneys are routinely involved in closing residential and commercial sales, and reviewing the listing agreement and commission clauses is a natural part of that role. If you would like a listing agreement, buyer-broker agreement, or commission dispute reviewed, the Law Offices of Albert Goodwin represent both buyers and sellers in New York. We have offices in New York City, Brooklyn, and Queens. You can call us at 212-233-1233 or email [email protected].

Sources and references: National Association of Realtors settlement practice changes (effective August 2024); New York Real Property Law §443 (agency disclosure); New York Department of State, Division of Licensing Services rules for real estate brokers and salespersons.