R
eal estate agents in Tennessee, like those nationwide, typically earn their income through a percentage of the home's sale price. Traditionally, sellers covered both their own agent and the buyer's agent fees, with total commissions ranging from 5 to 6 percent. However, this long-standing paradigm is shifting, and who covers which portion of the agent fees is now often a matter of negotiation.

    In Tennessee, real estate commissions typically average 5.42 percent, closely aligning with the national average. Listing agents earn about 2.75 percent, while buyer's agents take home approximately 2.67 percent on average. With homes selling for a median price of $405,700 in June 2025, a standard 5.42 percent commission rate would translate to nearly $22,000 in agent fees.

    Real estate prices and commissions can vary significantly from market to market in Tennessee. For example, sales in booming cities like Nashville may net higher commissions than those in quieter rural areas like Jonesborough.

    Here's a breakdown of typical home prices and corresponding commission payouts in several metro markets:

    * Nashville: $549,000, total agent commission (5.42%) - $29,756, listing agent commission only (2.75%) - $15,098, buyer's agent commission only (2.67%) - $14,658

    * Memphis: $215,000, total agent commission (5.42%) - $11,653, listing agent commission only (2.75%) - $5,913, buyer's agent commission only (2.67%) - $5,741

    * Chattanooga: $385,000, total agent commission (5.42%) - $20,867, listing agent commission only (2.75%) - $10,588, buyer's agent commission only (2.67%) - $10,280

    Real estate agents in Tennessee play a crucial role in making sure home sales and purchases run smoothly. Their commission reflects the range of personalized support, local market knowledge, and logistical expertise they bring to each transaction.

    When it comes to paying agent commissions in Tennessee, buyers and sellers typically arrange their own agreements with their respective agents, each signing an independent contract that spells out how much they'll pay for representation. Sellers are no longer obligated to pay the buyer's agent fee, though they still have the option to contribute as a concession.

    Are real estate agents worth it? Buying or selling a home in Tennessee is a big deal, likely representing the most significant transaction of your life. Having a knowledgeable pro in your corner can be a game-changer, streamlining the process and helping you avoid costly mistakes.

    If you're determined to lower your out-of-pocket agent costs, consider these best practices:

    * Redo the rate: Negotiate with potential agents to see if they're open to reducing their standard fee.

    * Opt for a discount agent: Companies like Clever and Redfin offer discounted commission rates or flat-fee models.

    * Go the "FSBO" route: Sell your home as a "for sale by owner," but be aware that you might still owe the buyer's agent commission.

    * Sell to a cash homebuyer: Consider selling directly to a cash-buying company, which eliminates commission fees but may not result in the full market price for your property.