Colorado Real Estate Commission: 2025 Breakdown

If you are a buyer, flipper, or 1031er in the state of Colorado, then Colorado real estate commission fees will be one of your biggest line items. But why is that? Shouldn’t that have changed after the 2024 NAR settlement? Real estate agents need to get paid somehow, but the question is how much and who pays it. In this guide, we break down how commission in Colorado real estate works.

How much is the average real estate commission in Colorado?

The average real estate commission in Colorado is still around 5.5% to 6% of a home’s sale price, usually split between the listing agent and the buyer’s agent. After the 2024 NAR settlement, sellers are no longer required to automatically cover the buyer’s agent commission. Instead, buyers must sign agreements with their agents that outline how they will be paid. This shift has not dramatically lowered overall rates yet, and most Colorado transactions still land in the mid-5% range, but it has made commissions far more negotiable and transparent.

How is real estate commission structured in Colorado?

In the real estate world, commission and deal structures come in all shapes and sizes. That being said, in the state of Colorado, you generally see the following:

Typical real estate commission structures in Colorado

Commission Structure	Description	Investor Use Case
Percentage of purchase price	The classic model, where commission is a % of the sales price, is often split between the listing and the buyer’s broker.	Most common for traditional transactions; predictable for brokers but costly on high-value properties.
Flat-fee	A set dollar amount regardless of property price. Increasingly used on the buy side post-settlement.	Favored by investors who want cost certainty and are comfortable doing more legwork themselves.
Hybrid	A reduced percentage with a minimum fee, or a step-down percentage at higher price bands.	Useful for mid- to high-value properties where a straight percentage would overshoot fair compensation.
A la carte	Hourly consulting combined with a success kicker at closing.	Best for experienced investors who only need limited support and want to control costs tightly.

Colorado-specific note: Commission language now lives in the listing contract (seller ⇄ listing broker) and in the buyer-broker compensation agreement (buyer ⇄ buyer’s broker). Both are government-approved forms.

What do surveys say?

A handful of national and state surveys peg Colorado’s combined listing + buyer agent commission around ~5.6% on average in 2025. Even after the settlement, many sellers are still funding some or all buyer-agent pay as a concession to keep demand healthy. Treat this as a baseline assumption for modeling, not a rule.

Who pays what, now?

Deal setup	How buyer agent is paid	Where it’s written	Investor pros	Investor cons
Traditional split	Seller pays listing % + buyer-agent % as seller concession	Listing Contract; settlement statement	Maximizes buyer pool; simpler for buyers’ cash	Buyer pays their agent by a pre-agreed flat fee or %
Seller pays listing only	Buyer pays their agent by pre-agreed flat fee or %	Buyer’s Broker Compensation Agreement; closing	Lower seller outlay; cleaner pricing	Higher seller costs can mask trade-offs in price
Hybrid concession	Seller offers a fixed credit (e.g., $7,500) toward buyer costs	Contract concessions; settlement	Predictable cap on seller cost	May be insufficient in higher price bands
Flat-fee buy-side	Buyer pays $X to their agent regardless of price	Buyer’s Compensation Agreement	Cost certainty for pro buyers	Agent selection matters more for complex deals

Investor math: commissions, break-evens, and velocity

Below are three common investor paths and how commission affects IRR and hold time. We’ll use conservative survey-based assumptions for “typical” rates and then show sensitivity.

Scenario 1: Long-term rental hold (Denver metro SFR, $650,000)

An investor purchases a single-family rental in the Denver metro for $650,000, putting 25% down ($162,500) and covering about 1.5% in acquisition costs ($9,750). The home rents for $3,600 per month, producing an annual gross income of $43,200. After a 38% expense ratio for taxes, insurance, maintenance, and management, the property nets roughly $26,800 before financing.

The plan is to hold for five years. Assuming modest appreciation of 3% annually, the exit price comes to about $753,000. At resale, the biggest swing factor is commission. Here’s how different commission structures affect take-home proceeds:

Moving from a traditional 5.6% commission to a 2.8% listing-only model saves about $21,000 on exit, boosting the investor’s five-year IRR by roughly 1.3–1.5 percentage points.

Scenario 2: Cosmetic flip (Castle Rock townhouse, $485,000 → $560,000 exit)

An investor buys a townhouse in Castle Rock for $485,000, planning a quick cosmetic flip. They budget $27,500 for updates (paint, flooring, light kitchen refresh) and about $7,200 for four months of carrying costs, plus $6,000 in closing costs at purchase.

After renovations, the property is listed and sells for $560,000. On the exit, commission costs can swing the profit margin dramatically. Here’s how different structures play out:

Scenario 3: 1031 exchange strategy (Boulder County duplex, $1,050,000 exit)

An investor decides to sell a duplex in Boulder County as part of a 1031 exchange, with a projected exit price of $1,050,000. The goal is to roll proceeds into two smaller properties that are STR-friendly: one at $700,000 and another at $430,000.

The way the commission is structured on the downleg sale has a direct impact on how much capital the investor can redeploy into the new assets. Here’s how different commission setups change the net proceeds available for the exchange:

Reducing commission from 5.6% to 4.0% frees up $16,800, enough to furnish both new STR units or cover licensing and setup costs. Going further, a flat $12,500 fee preserves nearly $46,000 more capital than the traditional split. In a 1031 exchange where every dollar counts, commission efficiency can mean less borrowing and stronger DSCR on the upleg properties.

Where commission shows up in Colorado paperwork

Listing contracts
Spell out how much a seller owes their listing broker and under what conditions it’s earned. They can also include concessions toward buyer costs. Because they’re Commission-approved, the language is standardized and enforceable, which is important when underwriting net proceeds.

Buyer’s Broker Compensation Agreement
Since 2024, buyers must sign this before touring. It defines exactly how their agent will be paid, flat fee, capped percentage, or another model, shifting more negotiation and responsibility to the buy side.

Commission Position Statements
Not laws, but official guidance on issues like inspections, earnest money, or advertising. They reduce friction and compliance risk by keeping brokers on the same page.

Negotiation playbook for investors

Whether you’re selling, buying, or exchanging property in Colorado, commission is one of the few levers you can actively negotiate. Done right, it can save tens of thousands of dollars without extending days on market or turning away buyers. Here’s how the tactics line up for both sides of the table:

Side	Strategy	Details
On the Sell Side	Tie comp to speed	Offer a tiered commission with step-downs if DOM passes 30/45/60.
	Cap the buy-side	Instead of a percentage, offer a hard dollar credit (e.g., $8,000).
	Net-sheet first	Underwrite your net with 2–3 commission scenarios before listing.
	Measure DOM impact	In some sub-markets, a modest buyer-agent incentive still shortens DOM.
On the Buy Side	Flat fee for pro buyers	Negotiate a flat fee with your agent and keep the rest in the price.
	Builder quirks	Builders often pay a fixed co-op; if it’s below your agreement, plan how to cover the delta.
	Transparency with lenders	Make sure your compensation arrangement is disclosed early to avoid surprises at underwriting.
Compliance	Compliance hygiene	Use the Commission-approved forms and keep them fully executed in your file. It protects your deal if something gets challenged.

Commission rates are here to stay

If you’ve ever worked on a job on commission, you understand that salespeople need to get paid, particularly those working in real estate. The question is how much. After the 2024 NAR ruling, many people expected that the overall commission rate would go down, but that hasn’t been the case. We see in Colorado, and across the nation, commission rates of 5-6% being the norm. It’s important from an investor’s perspective to know exactly what you are paying and how to negotiate. It’s important to note, however, that paying your agent a nice commission is a surefire way to get an influx of deals in your pipeline for the future.

FAQ

Does the Colorado Real Estate Commission set commission rates?

No. The Commission regulates licensing, contracts, and broker conduct, but it does not set or cap commission rates. Fees are 100% negotiable between a broker and their client.

Who pays the buyer’s agent in Colorado now?

Since the 2024 NAR settlement, compensation is no longer advertised in the MLS. Buyers sign a Buyer-Broker Compensation Agreement before touring, and either cover their agent’s fee directly or negotiate with the seller for a concession to offset the cost.

Are flat-fee listing agreements legal in Colorado?

Yes. Flat-fee and reduced-percentage structures are allowed as long as they’re written into a Commission-approved listing contract. Many investors use them to control costs, especially on higher-value properties.