Real estate commissions have risen has been in the news lately. According to a RealTrends article published April 2023:
“Over the past three years, the average commission rate has been creeping up from an all-time low of 4.94% in 2020 to 5.32% in 2022, which is the highest it’s been since 2013.”
Home prices have also gone up quite a bit since 2013. I would argue that agents are getting paid more without raising the percentage charged. In other words, a 5% commission on a house sold in 2013 was less than a 5% commission on a house sold in 2022.
I would think commissions would go down due to the fact that there is less work for more agents this year. On the other hand if agents have less business they may need to charge more in order to make enough money to stay in business.
Often clients tell me that there is a “going rate” and they “know” what that rate is. They almost always quote a rate that is higher than 5.32%. Those homeowners probably end up paying more.
It is important to understand that commissions are always negotiable. When agents won’t negotiate it might be because they lack negotiation skills and that might mean that they won’t know how to negotiate with buyers or buyers agents when an offer comes in.
Heck some of them just say “highest and best” offer rather than negotiating at all but that is the subject for another time.
Agents who are new to real estate tend to charge about the same amount as experienced agents charge. I am here to tell you that experience matters. In fact, it is all that matters.
If you are looking to sell a house and to use the services of a real estate agent choose one with experience and don’t be afraid to negotiate a commission and fees that you are comfortable with.
