Broker fees depend entirely on what the broker is helping you buy or sell. Residential real estate agents collect a combined 5% to 5.5% of a home’s sale price. Mortgage brokers charge 1% to 2% of the loan amount. Most online stock trades cost nothing, but a human financial advisor typically runs about 1% of your portfolio each year. Insurance brokers are usually paid by the carrier rather than by you. Business brokers take 8% to 12% on smaller sales, with sliding scales on larger deals. The sections below walk through how much broker fees actually cost in each of these situations and who ends up paying them.
Rates at a Glance
- Residential real estate: around 5.4% total, typically split 2.5% to 3% per side
- Commercial real estate: 1% to 2% on larger properties, often tiered
- Rental brokers (NYC, Boston, similar markets): one month’s rent to 15% of the first year’s rent
- Mortgage brokers: 1% to 2% of the loan, capped at 3% total points and fees on a qualified mortgage
- Stock and ETF trades at major online brokerages: $0
- Options: about $0.65 per contract
- Human financial advisors: roughly 0.30% to over 1% of assets per year, median around 1%
- Robo-advisors: 0.25% to 0.50% per year
- Insurance brokers (property, auto, liability): 8% to 20% of premium, paid by the carrier
- Life insurance brokers: 50% to over 100% of the first year’s premium, then smaller renewal commissions
- Business brokers (deals under $5 million): 8% to 12%, usually with a minimum success fee of $10,000 to $25,000
Real Estate Agent Commissions
The total commission on a residential home sale currently averages around 5.4%, split between the listing agent and the buyer’s agent. On a $400,000 home, that comes to roughly $21,600. Each side usually takes 2.5% to 3%, though agents on higher-priced properties often accept a smaller percentage because the dollar amount is still large.1Fidelity. How Do Real Estate Agent Fees and Commissions Work
A significant change took effect in August 2024 after a legal settlement with the National Association of Realtors. Commission offers to buyer agents no longer appear on MLS listings, and buyers must sign a written buyer-broker agreement before an agent shows them property or represents them. The agreement states exactly what the agent will be paid and who pays it. Sellers can still offer to cover the buyer’s agent fee, but that has to be negotiated separately.
For buyers, that means agent compensation is now something you actively agree to. If the seller doesn’t offer to cover your agent’s fee, you may need to pay it directly or fold it into the purchase price. Sellers, in turn, have more room to negotiate total commission because they are no longer automatically committing to pay both sides.
Commercial real estate is different. Percentages tend to shrink as prices climb. A $10 million office building might carry a 1% to 2% commission, and deals often use tiered structures tied to lease length or performance benchmarks.
Rental Broker Fees
In most of the country, renters never pay a broker fee because landlords handle leasing themselves or absorb the cost. In a few high-demand markets, especially New York City and Boston, a broker fee is standard. The typical charge runs between one month’s rent and 15% of the first year’s rent. On a $2,500-per-month apartment, that is $2,500 to $4,500 just to sign the lease.
Who pays varies by market and by listing. Where demand is tight, the tenant almost always covers it. “No-fee” apartments usually mean the landlord is paying the broker or renting directly. Ask upfront who owes the fee before you tour a unit, because it is usually due at signing along with the security deposit and first month’s rent.
Mortgage Broker Fees
Mortgage brokers compare loan products across lenders and typically charge 1% to 2% of the total loan amount. On a $300,000 mortgage, expect $3,000 to $6,000 in broker compensation. Federal law caps total points and fees at 3% for a loan to qualify as a “qualified mortgage,” which sets a practical ceiling.
Compensation comes in one of two forms. In a lender-paid arrangement, the lender builds the broker’s fee into the interest rate, so you pay nothing at closing but a bit more over the life of the loan. In a borrower-paid arrangement, the fee shows up as a line item on your closing disclosure. Federal regulations prohibit a broker from being paid by both the lender and the borrower on the same loan.2eCFR. 12 CFR 1026.36 – Prohibited Acts or Practices and Certain Requirements for Credit Secured by a Dwelling
The same rule bars brokers from being paid based on the interest rate or other specific loan terms. That protection is meant to prevent steering, where a broker pushes you toward a higher-rate loan to earn more. If a broker’s fee changes depending on which product you pick, treat it as a warning sign.2eCFR. 12 CFR 1026.36 – Prohibited Acts or Practices and Certain Requirements for Credit Secured by a Dwelling
Within three business days of your application, the lender or broker must give you a Loan Estimate that itemizes expected costs, including the broker’s fee. Use it to compare offers before you commit.3eCFR. 12 CFR 1026.19 – Certain Mortgage and Variable-Rate Transactions
Stock and Investment Brokerage Costs
Most major online brokerages charge $0 commission for U.S. stock and ETF trades. Fidelity, Schwab, and others eliminated these fees years ago.4Fidelity. Trading Commissions and Margin Rates
Free is not the same as costless. These platforms make money in other ways, including payment for order flow, where market makers pay the broker for the right to execute your trade. The SEC requires disclosure of those arrangements. The cost to you is indirect, embedded in the spread between buy and sell prices rather than shown on your statement.
Options trading still carries an explicit per-contract fee. At most retail brokerages, you’ll pay around $0.65 per options contract on top of the $0 base commission.4Fidelity. Trading Commissions and Margin Rates High-volume traders can sometimes negotiate per-share pricing that drops to fractions of a cent per share.
Advisory Fees
If someone manages your portfolio rather than you picking your own investments, the fee shifts to an annual charge based on your assets under management. The median for a human financial advisor is about 1% per year, with a range from roughly 0.30% at lower-cost firms to over 1% at full-service wealth managers. Robo-advisors charge 0.25% to 0.50%. A 1% AUM fee on a $500,000 portfolio costs $5,000 a year and generally covers rebalancing, tax-loss harvesting, and ongoing planning.
Transfer and Account Fees
Moving a brokerage account to another firm usually triggers an outgoing transfer fee, known as an ACAT fee, of $50 to $100. Some brokerages waive it for larger balances or when they’re the receiving firm. A few platforms also charge annual maintenance fees of $20 to $25, often waived with electronic statements or a minimum balance.5Vanguard. Vanguard Annual Account Service Fees
Insurance Broker Commissions
Insurance brokers are almost always paid by the carrier rather than by you. When you buy a policy through a broker, the insurer pays a commission calculated as a percentage of your premium. For commercial property, auto, and liability coverage, that commission commonly falls between 8% and 20% of the premium, with some specialty lines higher.6AIG. Producer Compensation
Life insurance is different. A life insurance broker may earn 50% to over 100% of the first year’s premium, dropping to a small percentage on renewals. That front-loaded structure creates an incentive to sell new policies, worth remembering if a broker suggests replacing coverage you already have.
In some specialized consulting engagements, a broker may charge you a direct advisory fee for complex risk or benefits work. Most states require written disclosure of all fees and commissions before services begin. If a broker doesn’t offer it, ask for it in writing.
Business Sale and M&A Fees
Selling a business carries some of the steepest brokerage costs of any transaction. For businesses valued under $5 million, most brokers charge a straight commission of 8% to 12% of the final sale price. A $1.5 million sale at 10% is $150,000 in fees. Most brokers also set a minimum success fee, often $10,000 to $25,000, that applies regardless of price.
Larger deals use a sliding scale, historically based on the Lehman Scale, which steps down from 5% on the first million of transaction value to 1% on everything above $4 million. Many mid-market advisors now use a modified or “Double Lehman” version with roughly doubled percentages.
For businesses in the $5 million to $100 million range, M&A advisors usually charge an upfront retainer on top of the success fee. Retainers run from a few thousand dollars to $50,000 or more and cover valuation, marketing materials, and buyer outreach. Some engagements credit the retainer against the success fee at closing; others do not. Read the engagement letter, because if the deal falls through, the retainer generally isn’t refundable.
How Broker Fees Affect Your Taxes
Tax treatment depends on what the transaction was.
Real estate commissions on a home sale count as selling expenses that reduce your taxable gain. Sell for $500,000 with $25,000 in agent commissions and your amount realized becomes $475,000 for capital gains purposes. If you’re a buyer who paid your agent’s fee, that cost gets added to the home’s basis, reducing the taxable gain when you eventually sell.7Internal Revenue Service. Selling Your Home
Investment advisory and AUM fees are not deductible for individual investors. The miscellaneous itemized deduction that once covered them was suspended by the Tax Cuts and Jobs Act in 2018 and permanently eliminated by the One Big Beautiful Bill Act in 2025. Commissions and transaction fees paid when buying or selling investments still factor into your cost basis, which lowers the gain when you sell.
Business acquisition fees follow their own logic. Buyers generally must capitalize brokerage fees into the basis of the purchased assets or stock rather than expensing them right away. Sellers usually apply those fees against sale proceeds. The line between facilitative costs that must be capitalized and non-facilitative costs that can be expensed is fact-specific, so a tax advisor is worth the call on any meaningful transaction.
Disputing a Broker Fee
If you think a broker overcharged you or collected a fee you didn’t authorize, the process depends on the industry.
For investment brokerage disputes, FINRA runs a formal arbitration process. You file a Statement of Claim, sign a Submission Agreement, and pay a filing fee that scales with the amount at stake. FINRA generally requires filings through its online DR Portal, though self-represented investors can file by mail. Before arbitration, FINRA suggests contacting the firm directly or filing an Investor Complaint if you suspect fraud.8FINRA.org. File an Arbitration or Mediation Claim
Real estate commission disputes can go through local or state Realtor associations, which are required to offer ombudsman services and arbitration. Arbitration produces a binding decision. Mediation is available as a less adversarial first step.
For mortgage complaints, the Consumer Financial Protection Bureau accepts filings against brokers and servicers and can investigate violations of Regulation Z’s compensation rules. If a mortgage broker collected fees from both you and the lender, or if their compensation shifted based on the rate you received, those are the kinds of violations worth reporting.2eCFR. 12 CFR 1026.36 – Prohibited Acts or Practices and Certain Requirements for Credit Secured by a Dwelling