What is the Commission for Real Estate Agents in Illinois?

As an Illinois real estate agent, you will most likely be paid by commission, meaning you’ll earn a percentage of each deal you close.

In Illinois, the average commission for a real estate transaction is 5.35% of the property’s sales price. Listing agents (those who represent the seller) earn an average of 2.75%, while buyer’s agents earn an average of 2.6%.

But this doesn’t mean you should expect to hit those numbers on every deal you complete in Illinois. Real estate fees are, and always have been, negotiable. Plus, recent changes to commission regulations are shifting the way agents get paid.

Let’s take a look at how commissions work for Illinois real estate agents. We’ll give you some examples of commission calculations, show you which factors affect your commission checks, and give you some quick tips for earning big commissions in IL!

How Real Estate Commissions Work in Illinois

Buyer’s agents and seller’s agents are each responsible for negotiating their fees with their clients. In IL, 2-3% is a common rate for each side of the transaction. If you practice dual agency, in which you represent both the buyer and the seller, you are entitled to both sides of the commission, most likely resulting in a commission of 4-6%.

Your commission will probably need to be split with your managing broker. Most managing brokers charge a split of the agent’s commission for services provided, such as office space, admin support, and advertising. For new agents, 50/50 splits are common. As you close more deals and gain more experience, you may be able to negotiate a higher split for yourself. (Brokers who do not take a split typically charge monthly fees instead.)

Who Pays the Real Estate Agents in Illinois?

Sellers are responsible for paying their agent and buyers are responsible for paying their agent. However, sellers may offer a concession to the buyer to help the buyer cover some (or all) of the buyer’s agent’s fees.

Before August 2024, there was a long-established tradition of sellers paying the full 5-6% commission to the listing agent, who would then split the earnings (almost always 50/50) with the buyer’s agent. But the 2024 National Association of REALTORS (NAR) settlement changed this industry standard. Now, each party negotiates with and pays their own agents as outlined above.

Example of Commission Calculations in Illinois

Let’s say you’re the listing agent for a $500,000 sale with a 3% listing-side commission.

Your total commission would be $15,000 ($500,000 x .03 = $15,000).

If you have a 70/30 split with your broker, your share would be $10,500 ($15,000 x .7 = $10,500).

And this is just one deal. What happens if you sell one home per month at this rate?

You could make $126,000 for the year!

Factors Affecting Commission Rates in Illinois

Commission rates in IL can be affected by:

• Market conditions. Agents may charge lower commissions in a hot seller’s market because homes sell more quickly and easily.

• Property type and price point. Agents may offer lower commissions for luxury homes and commercial properties. This is because a smaller cut of a high-value property can be a lot of money.

• Location. Commissions in local markets and submarkets can vary. For example, in the wealthy Chicago suburbs, commissions may lean closer to 2.5% per agent, while agents in rural IL may be able to command closer to 3% due to the lower property values.

• Seller's preferences. If the seller doesn’t want a full-service listing agent, they can pay a lower commission to a discount brokerage.

• Agent's experience and reputation. Highly sought-after agents can charge higher commissions than new agents.

Alternative Pay Structures for Agents in Illinois

Since real estate agent fees are negotiable, you’re free to arrange an alternative compensation structure if a commission doesn’t work for you and your clients.

• Flat fee arrangements. You could charge a set dollar amount for your fee, rather than working for a percentage of the sale.

• Hybrid models. Maybe you offer a lower commission percentage as long as there is a guaranteed flat rate.

• Hourly rates. This doesn’t make sense in all cases, but you could charge by the hour for the time you invest in the deal.

Start Earning Real Estate Commissions in Illinois

Before you can start earning commission checks, you need to get your Illinois real estate license. This requires you to complete a 75-hour real estate class, pass the IL real estate exam, and choose a managing broker to oversee your work.

Then you’re ready to start working with buyers and sellers and join the thousands of real estate agents in Illinois earning upwards of $60,000 per year!