The Average U.S. Real Estate Commission Rate

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 a 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. While commissions then have dropped 17% or so, 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 4.5% 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

Real Trends Commission Studies (data source)

Unfortunately, RealTrends has repeatedly said their national average commission studies comes from proprietary data and they do not share their source material. However, RealTrends is an actual statistic-based (not a lead gen. company like the ones below) company and is influential in the real estate industry, regularly producing relied-on reporting data.

About the Real Estate Commission Increase in 2023

The reported real estate commission increase in 2023, I believe, is in part due to a slower real estate market. In hotter market years, like 2020, the public believes anyone can sell their house and tend to look for lower commission rates. In slower years, the public is more willing to pay a higher commission if they think the real estate agent can bring them the sale in a tougher market.

According to the Journal of Real Estate Finance and Economics Jan. 2014 report, commission rates tend to increase during a down housing market and decrease during a housing market boom. You can see this reflected in the above real estate commission rate chart.

Other Real Estate Commission Studies

FastExpert, a company that generates leads for real estate agents and sells them back to them for a referral fee, conducted a small study using data from less than 1,000 agents and found the average commission rate in 2023 to be 5.57%.

Clever, another company that generates leads for real estate agents and sells them back to them, also conducted a small study of less than 1,000 agents and came up with an average commission rate for Oregon of 4.99%.

Keep in mind there are over 1 million Realtors in the U.S., so I don’t think the above reports are statically viable. You can find many more reports on commissions online referencing these two small studies as well as the RealTrends data.

Realogy is the parent company of a number of large Realty companies. It is also a publicly traded company and so their reports have accountability behind them. Recent Realogy reports have more or less confirmed Real Trends research. From Realogy, “As of December 31, 2019, approximately 710 company owned brokerage offices and approximately 52,200 independent sales agents working with these company owned offices.” They report that their average commission per side was 2.41%, which would typically equal a 4.82% commission rate for the seller when split 50/50.

Portland, Oregon Buyers Agent Commission Study

We put out an annual buyers agent commission study because we have access to that data through our local MLS, RMLS. We conduct this study because it is important for us to know how to advise our clients on what commission might be best to offer the buyers agent on the sale of their home.

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. We conduct an annual report on how much less FSBO homes sell for. Our latest FSBO report, showed that for sale by owner homes sold for a lot less than you might guess.

Real Estate Agents Are Not All The Same

For more than 20 years our small team has been selling homes in the greater Portland metro area. We’ve sold over 2,000 homes in that time. Our commission rate is lower than average, but we pay more to market our clients’ homes online so they sell faster and for more. 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 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.

Give us a call at 503-714-1111 or chat with the bot on this site. We’d love to connect today!