Real Estate Agent Commissions by State in 2022
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In the United States, real estate agents typically earn a commission for every sale that they make. The amount a real estate agent makes on each sale can vary by state, with agents in some states earning more than twice as much as those in other states.
In this article, we will take a look at how real estate agent commissions are structured in each of the 50 U.S. states.
What is the Average National Real Estate Commission?
The average real estate commission in the United States is roughly 5.5%, according to a random survey of FastExpert’s agents. This means that for every $100,000 in property value that is sold, the real estate agent will earn $5,500.
However, as we mentioned above, commissions vary by state and region. In some areas, agents earn as little as 3%, while in others they can earn up to 7%.
How Do Real Estate Commissions Work?
In most cases, real estate commissions are paid out by the seller of the property. It is typically a percentage of the final sale price and is divided between the buyer’s agent and the seller’s agent.
For example, let’s say that a home is sold for $200,000 and the commission rate is 5%. The total commission would be $10,000, which would be split evenly between the buyer’s agent and the seller’s agent. Or, if the agent is a dual agent – acting on behalf of both the buyer and seller – they would keep the entire sum.
Are Real Estate Commissions Negotiable?
Yes, real estate commissions are negotiable. In most cases, the seller of the property will be the one who pays the commission, so they will have the ability to negotiate with the agent.
Just be advised that just because an agent is offering a lower commission, it doesn’t mean they are a better agent. In some cases, agents who charge lower commissions may be less experienced or may not provide the same level of service as those who charge higher commissions.
It is also worth noting that some real estate agents may charge a flat fee instead of a commission. This is most often seen in low-priced properties or in cases where the agent is confident that they will sell the property quickly.
What Else You Should Know About Real Estate Commissions
Here are a few other things you should keep in mind when it comes to real estate commissions:
- Commissions are typically paid out at closing, so you won’t have to worry about paying the commission upfront.
- Even if you are selling your home yourself, you may still need to pay the buyer’s agent their commission, unless you work it into the contract that the buyer is responsible.
- In some cases, the buyer and seller may agree to split the commission. For example, if the commission is 5% and the parties agree to split it 50/50, the buyer would pay 2.5% and the seller would pay 2.5%.
- Some real estate agents may charge a higher commission if the property is sold for a higher price. For example, they may charge a 6% commission if the property is sold for more than $500,000. Or, if they have significant experience in niche real estate transactions.
- In some cases, you may be able to negotiate a lower commission if you agree to use the same agent for both the purchase and the sale.
- You may also be able to negotiate a lower commission if you are buying and selling multiple properties at the same time.
A Word of Caution on Choosing a Discount Real Estate Agent
The old adage “you get what you pay for” is often true when it comes to real estate agents. Just because an agent is willing to negotiate their commission, doesn’t mean they are the best choice.
There are plenty of real estate professionals willing to discount their services. But, that lower commission means they are cutting essential services or they may not be as experienced.
Instead of choosing the agent with the lowest commission, it is best to choose an agent based on their experience, marketing plan, and reputation. You also want an agent who you feel confident will sell your property quickly and for the best price possible. In most cases, it is worth paying a higher commission to get the results you are looking for.
An experienced agent will likely sell your home faster and for a higher price than a discount agent. They will also be able to provide guidance and advice throughout the process.
The bottom line is that you should not let the commission rate be the only factor you consider when choosing a real estate agent. Instead, you should focus on finding an agent who you feel confident will sell your property quickly and for the best price possible.
Average Real Estate Agent Commission by State
A lot has changed over the last 30 years when it comes to how real estate agents are paid. Back in the 1990s, the average real estate agent commission in the US was 6.04%. In 2020, it was lowered to around 5.6%. According to FastExpert’s agents, in 2022 the figures below roughly match the national average of 5.5%, reflecting a slight decline from 2020.
Real Estate Agent Commission by State
| Alabama | 5.6% |
| Alaska | 4.9% |
| Arizona | 5.4% |
| Arkansas | 5.4% |
| California | 4.9% |
| Colorado | 5.5% |
| Connecticut | 5.4% |
| DC | 5.3% |
| Delaware | 5.7% |
| Florida | 5.4% |
| Georgia | 5.8% |
| Hawaii | 5.2% |
| Idaho | 5.6% |
| Illinois | 5.2% |
| Indiana | 6% |
| Iowa | 5.9% |
| Kansas | 6% |
| Kentucky | 5.7% |
| Louisiana | 5.1% |
| Maine | 5.6% |
| Maryland | 5.2% |
| Massachusetts | 5% |
| Michigan | 6% |
| Minnesota | 5.4% |
| Mississippi | 5.5% |
| Missouri | 5.9% |
| Montana | 5.6% |
| Nebraska | 5.3% |
| Nevada | 5% |
| New Hampshire | 4.7% |
| New Jersey | 5.2% |
| New Mexico | 5.5% |
| New York | 6% |
| North Carolina | 5.5% |
| North Dakota | 6% |
| Ohio | 5.9% |
| Oklahoma | 5.6% |
| Oregon | 5% |
| Pennsylvania | 5.5% |
| Rhode Island | 5% |
| South Carolina | 5.9% |
| South Dakota | 5.7% |
| Tennessee | 5.6% |
| Texas | 5.7% |
| Utah | 5.2% |
| Vermont | 6% |
| Virginia | 5.1% |
| Washington | 5.2% |
| West Virginia | 5.4% |
| Wisconsin | 5.9% |
| Wyoming | 5.3% |
Methodology
The figures presented here were compiled from a random sampling of 871 real estate agents registered with FastExpert. The agents were asked about their average commission rate, as well as the minimum and maximum commission they charge.
What is FastExpert?
If you’re looking to buy or sell a home, you’ve probably heard of FastExpert. But what is it, and how does it work?
In short, FastExpert is a website that connects home buyers and sellers with real estate agents in their area.
Here’s how it works:
- First, you enter your city or zip code.
- Then, FastExpert matches you with real estate agents in your area.
- You can browse the agent’s listing, learn more about their expertise, experience, and even read reviews from past clients.
- Once you’ve found an agent you’re interested in working with, you can contact them directly through the FastExpert website.
There’s no commission or fee to use FastExpert, so it’s a great way to save money on real estate commissions. Also, we don’t require your information up-front, so you can browse anonymously.
If you’re ready to find a real estate agent in your area, try FastExpert.com today!
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