Average U.S. Real Estate Commission Rates into 2023
Thinking of selling your home? Then you’re probably interested in real estate commissions. How much are they and what do you get in return? Will you be able to sell your home for more? Do you need the real estate agent’s advice and representation?
Real Estate Commission Changes from the 90s to Today
There are a lot of different ways to look at real estate commissions. One would be the overall decade trends from an average hovering around 6% in the 90’s to 5% in the 2000’s and 2010’s, and now just starting to dip below 5% in 2020 and after. Note that a 1% drop from 6% is roughly a 17% decrease. But in the meanwhile, home prices have tripled since the 90s. Now of course, inflation effects real estate agents as much as it does anyone else living in the U.S. And so $1 in the 90s would be worth roughly $2.27 today.
So let’s think about this. In the 90’s if a Realtor sold a home at 6% for 122,000 they would typically earn half of that 3% (the buyers agent the other half), so $3660, or $8308 in today’s dollars after accounting for inflation. If in 2022 they sold a $403,800 home at 4.92%, they would earn half of that, 2.46%, or $9,933, or roughly 16% more earning power than they had in the 90’s at 4.92% than at 6% back then. Looking at the chart, it is easy to see that based on housing prices and inflation rates, that general commission earning power has gone up and down for real estate agents over the years.
Real Estate Commissions Vary by Location
Also, please note that all real estate commissions are always negotiable. For example, our max. charge to sell a home in the greater Portland metro and SW Washington is 4% (includes the buyer’s agent fee) and 4.25% in Salem and Bend. Another general rule of thumb to keep in mind is that real estate agent commissions tend to be higher in rural areas (with lower prices) and lower in metro areas (with higher prices).
National Average Real Estate Commission by Year
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For Sale By Owner is a Tough Option
As much as real estate commissions can be, research shows For Sale By Owner efforts result in much lower home sales overall. Our latest FSBO report, showed that for sale by owner homes sold for 14% less on average in 2021.
Real Estate Agents Are Not All The Same
We work hard to sell our client’s homes faster and for more than the competition, all while providing a reasonable commission rate. We conduct extensive research each year to understand what makes homes sell and what doesn’t, and then we base our marketing and services on what actually works.
If you’re thinking of selling in the next 12 months, we’d love to setup an appointment to tour your home. We can give advice on what changes or upgrades would bring the best return on investment and forecast our your home value for market. We’d love to connect! Give us a call today or chat with our bot on this site.September 16, 2022