How Much Is Realtor Commission In Texas?

How much are realtor fees in Texas?

Home sale price $313,300 Commission (5.59%) $17,516 Closing costs (1.2%) $3,760 Net to seller $292,025

The average cost to sell a home in Texas is close to 7% of the sales price – 5.59% for realtor commission and 1.2% for closing costs, which include transaction-related expenses like title services and transfer taxes.

Here's what you could pay in realtor commission at three different price points, based on the average commission rate in Texas:

Home sale price Commission (5.59% rate) $200,000$11,180 $250,000 $13,975 $300,000 $16,770

Realtor commissions are typically the most expensive fees Texas home sellers pay during the closing process. But there are a few ways that you can reduce the amount you spend on realtor fees.

One option is to try to negotiate a lower commission rate with your realtor. You can also avoid realtor fees altogether by selling your house without a realtor— but this can be a time-consuming and risky process.

For most sellers, the best way to save on realtor commissions is with a real estate brokerage that offers pre-negotiated reduced rates. For example, Clever Real Estate matches sellers with top-rated agents from brokerages like Century 21 and RE/MAX, and negotiates a low 1% listing fee on your behalf.

Sellers who work with Clever can save thousands on realtor commissions. Interview as many agents as you want until you find the right fit, or walk away at any time!

Texas realtor commission calculator

Use this Texas realtor commission calculator to estimate how much you'll pay in real estate commission fees when you sell your home in Texas. You can use the following average commission rates, or insert different rates if you already know how much your agent will charge.

  • Average Texas listing agent commission rate: 2.71%
  • Average Texas buyer's agent commission rate: 2.88%

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What Are the Responsibilities of Selling a Texas Property FSBO?

There are a lot of tasks you will be responsible for if you choose to list your home on the open market without a real estate agent. These include:

  • Getting your home ready for listing by cleaning, staging, and making necessary repairs
  • Pricing your home accurately and competitively
  • Advertising your home by taking high-quality photos, writing a listing description, promoting your home, listing your home on different sites, and more
  • Vetting buyers to make sure that they are financially qualified
  • Dealing with all of the negotiations including the contingencies, final price, repair concessions, and more
  • Filling out all of the necessary paperwork properly that is required for Texas real estate transactions

Selling your home FSBO can basically be like having another full-time job. If you’re interested in avoiding paying realtor commissions in Texas but don’t want to take on the responsibilities of selling FSBO, you might want to learn more about selling your home to an iBuyer.

How to avoid paying Realtor fees

In 2019, just 11 percent of home sales were sold by owners without the help of an agent, according to the National Association of Realtors (NAR). In addition, NAR says, for-sale-by-owner homes (FSBOs) typically sell for less money than homes sold by Realtors. In many instances, FSBO sellers already know the buyers who end up purchasing their homes. Buying without a Realtor is also doable, but the jury is out about whether it’s a wise move — especially in this market.

When you shop around for Realtors, ask them from the outset what their commission is and compare the terms of each person you talk to. If you think the fee is too high, talk to them about lowering it.

“In certain situations where there’s a competitive environment for a prime or trophy listing, Realtors sometimes will negotiate the commission upfront,” Duffy says. “For example, if I’m listing a $4 million home at 6 percent, that’s a lot of money. In a situation like that there is greater flexibility to negotiate the commission — if you get $100,000 or $80,000 instead of $120,000, it’s still a good payday.” If the transaction is being handled on both sides by agents from the same brokerage, you might have more leverage as well.

Who pays real estate commission fees?

Typically the seller in a transaction will pay commission fees in full. As top real estate agent Rachel Moussa of Flower Mound, Texas, explains, in most places, “the standard is for sellers to pay both the listing agent and the buyer’s agent’s commission. The listing agent puts on the MLS what percentage the seller has agreed to pay cooperating brokers.”

Find an Agent Worth Their Commission We’ll connect you with three top local agents proven to deliver amazing results for their clients. You won’t regret a dime spent! Find Agent

When is the commission owed?

The real estate commission will automatically be deducted from the sale proceeds at the time of closing. Until then, you won’t owe any money to the real estate agent.

How can you reduce the commissions that you pay when you sell a home in Texas?

Negotiating with your listing agent might yield a lower commission rate, however, not all agents are willing to negotiate. Some discount real estate brokers offer low commission rates in Texas, either charging a low percentage or a flat-fee. These discount brokers may provide full-service, or they may offer limited-service. Some discount brokers in Texas charge a commission as low as 1%, or they might charge a flat-fee. This listing fee can range from $3,500 to $5,000. Some discount brokers also provide cashback or a buyer rebate.

There are also MLS listing services in Texas that only charge a flat-fee. These for sale by owner (FSBO) offerings mean that you will have to manage the entire home selling process, including dealing with agents and buyers, staging your home, and negotiating.

Some listing services may also provide other limited services, such as providing market analysis which will help you when pricing your home. While you can save thousands of dollars on commissions that would otherwise be paid to a selling agent, you still need to pay the buyer's agent. This would be around 3% of the home's selling price.

Is It Common To Negotiate Realtor Commission?

commissions negotiable with respect to sales ps negotiable? ? It’s a law that compensation can always be negotiated. It is up to home sellers if a property is move-in ready, updated or expensive. Kevin Lawton, vice president of real estate at Coldwell Banker in Bordentown, NJ, suggests considering such things.

How commissions have changed over the years

Since the early 1990s, Realtor commissions have seen a fairly steady decline. In 2021, the average commission was 5.5 percent — down from more than 6 percent in 1991.

This isn’t to say the total amount Realtors earned decreased, however. In strong selling markets, home prices are high and sellers receive multiple offers. This allows more room for negotiation on the commission, so Realtors may accept a lower commission to earn a higher amount overall.

As the market slows down, Realtor commissions may rise again and become less negotiable. Even so, a seller with a  high-priced listing may still be able to negotiate a lower commission more effectively.

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Real Estate Experts

FastExpert is a real estate agent directory that ranks agents by location according to client ratings and past home sales history. Our goal is to give you all the information you need to choose the right real estate agent for your needs. Users can search by specific traits that are important to them as well as see specific addresses of homes agents have sold in the past. Let FastExpert help you find an agent! View all posts by Real Estate Experts

Methodology

Our data on Texas commission rates is based on a survey of 915 of our partner agents from across the country, in which we asked for typical rates for both buyer's and seller's agents in their area.Additionally, we utilized the following data from Zillow and Realtor.com:

  • Home values: Based on Zillow data as of June 2022
  • Months of inventory, list prices, and time on market: Based on Realtor.com data as of June 2022

We last surveyed Texas real estate agents in May 2021, and we're in the process of updating our data.

What Is The Lowest Commission A Realtor Can Charge?

Its listings are available in all 50 states at Clever Real Estate and it offers some of the lowest commissions in any full service brokerage. Having Clever connect you with top locally-rated agents can help you save money on your behalf because there’s no upfront fee.

What Is the Commission for Real Estate Agents in Texas?

The commission you’ll earn as a real estate agent in Texas can vary. Traditionally, it will be a cut of a percentage that is split four ways. I know, that sounds like a lot of splitting, but there are usually four players who need to be compensated! Let’s meet them.

Who Gets Paid in a Transaction?

Real estate agents share their compensation with their sponsoring broker. They’ll negotiate how much of the commission they’ll share during the hiring process. So, there’s one split right there between the agent and their broker.

Typically, another brokerage is involved in a transaction too! Let’s say, for example, that one brokerage represents the seller (that’d be the listing brokerage) and another represents the buyer (the buyer’s brokerage). So, you’ve potentially got two different brokerages, and each brokerage has one sponsoring broker and their agent working in the transaction.

Now that you know the folks involved let’s look at this process step by step.

How Traditional Commission Splits Work

Traditional commission splits break down as follows:

  1. First, the commission amount for the transaction is negotiated between the seller of the property and the listing agent (listing agent is a fancy way of saying the agent working with the seller). Once they agree on an amount, it will be included in the listing agreement – that’s the contract between the seller and the listing agent where they agree on the terms for how the agent will help them sell the house.
  2. Next, the listing agent offers a percentage to a broker who will find a buyer. We call this the cooperating broker.
  3. Then, when the house sells the buyer’s real estate agent will get a percentage of the commission.

Remember, both the listing agent and the buyer’s agent share their commissions with their sponsoring brokers. As a result, the commission for the sale often goes four ways. Another crucial factor to keep in mind is that all of these splits are negotiable.

Commission Split Example

Let's look at an example. Say a home is listed for

Let’s look at an example. Say a home is listed for $300,000, and the seller and listing agent agree on a 6% commission. When the house sells, that whole 6% commission, or $18,000, will go towards paying commissions.

If the listing brokerage and the buying brokerage decide on a 50/50 split, each will get $9,000 to split with their agents. Let’s say the buying agent agreed on a 50/50 split with their sponsoring broker – they would each get $4,500. And, for the sake of simplicity, let’s say the listing agent and their sponsoring broker also agreed on a 50/50 split. In the end, four parties would get $4,500 each.

  • Home sale price: $300,000
  • Commission (6%): $18,000
  • Listing broker’s commission (1.5%): $4,500
  • Listing agent’s commission (1.5%): $4,500
  • Buyer’s broker’s commission (1.5%): $4,500
  • Buyer’s agent’s commission (1.5%): $4,500

Note: There are no uniform commission rates in real estate. In fact, it’s a violation of federal antitrust laws to try to impose them. However, according to List With Clever’s most recent survey, the average commission for realtors in Texas is 5.49%

Does the Buyer or Seller Pay the Commission?

Things don’t always play out the way we described in the example above! So many pieces of the commission equation depend on what’s negotiated. Typically, the seller will pay the commission unless they have otherwise negotiated to split it with the buyer. However, the commission is often factored into the selling price of the home. So, it could be argued that the buyer actually pays some, if not all, of it.

Breaking Commission Tradition

Of course, there are always those who decide to break tradition! For example, RedFin offers to list properties for a 1.5% commission fee. They act as a listing brokerage and listing agent but charge the rate of just one of those parties. Being so, it usually ends up costing only half of what the traditional model costs.

However, the commission for the buyer’s broker and the agent is typically the same. So if you bring a buyer to a RedFin property, as the real estate agent, you can still earn your normal commission. While this can save the buyer and/or seller on potential costs, some customers complain about poor service quality with RedFin.

Are commission rates negotiable?

You can negotiate real estate agent commission rates, but don’t be surprised if your agent holds firm on how much they charge. A Consumer Federation of America report found that only 27 percent of agents are willing to negotiate commission.

One reason agents often don’t lower their rate is that it may reduce their ability to negotiate a higher sale price for the seller. An agent’s services often include photography and a pricing analysis, so a lower commission could also translate into a smaller marketing budget for your property, an inaccurate list price, fewer home promotions, and a lower likelihood of selling.

Exceptions can occur if you’ve already found a buyer. Let’s say you’re selling your house to a friend, or have decided to sell to a family member, in that case, the agent would likely be willing to play the role of transaction coordinator and independent go-between for a reduced commission rate.

Overall, commissions are negotiable but do your research first. When asking an agent to lower their pay, you’re limiting the pool of agents willing to work with you. And the downsides to working with a low-commission agent can be steep. Without a top agent in your corner, you could dramatically undersell your home, have a rough selling experience, or fail to sell the home at all.

Is It Time For You to Sell Your Texas House?

There are few things in life that are as stressful as selling a home. Not only do you have to make costly repairs, clean your home, and make improvements to boost your curb appeal, but the process of having endless showings and open houses can be an ongoing nightmare. On top of that, once you do finally find a buyer, there can be many sleepless nights where you are hoping that their financing doesn’t fall through.

All of this can only be exacerbated by the fact that you have to pay a steep realtor commission in Texas if you hire a real estate agent. This can really cut into your profits and make the whole process seem daunting.

If you’re looking for a faster and easier way to sell your house that doesn’t leave you suffering from daily headaches, consider selling to an iBuyer. These buyers will purchase your home as-is, meaning that you don’t have to put time, energy, and money into getting the house fixed up and clean for the market. Since they pay cash for your home, the closing date can occur way sooner than when you’re waiting for a buyer to obtain financing.

Are you wondering how much an iBuyer would pay for your home? Check out our free home valuation tool here!

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