BrokerageReal Estate

Average annual commission rate rises slightly in 2021

For the first time since 2017, the national average commission rate ticked up slightly from 4.94% in 2020 (based on 2020 data) to 5.06% in 2021 (based on 2021 data). RealTrends has been tracking this information since 1991.

Variations in average commission rates are common, as you can see from the graph below. RealTrends tracks total gross commission which is now around 5.06%. According to Steve Murray, senior advisor of RealTrends. “While we don’t track commissions by side, we do track the transaction sides of commissions in total.”

According to Redfin, which tracks the buyer’s agent commission, the typical commission rate paid to brokerages representing homebuyers has fallen to its lowest point in at least four years. Redfin found the typical U.S. buyer’s agent commission was 2.63% of the home-sale price during the three months ending Nov. 30, 2021 — down from 2.69% a year earlier and the lowest rate in Redfin’s records, which date back to 2017. 

Why the tick up in average national commission rates?

One contributing factor for the uptick of RealTrends’ data on national commission rates was the inclusion of Compass and eXp data for the first time, as their data showed that average commission rates for these firms are “a bit higher than the average,” said Murray.

However, the uptick is minimal and says Murray, “We have 31 years of data, and we’ve found that the decline in the average national commission rate between 2017 and 2020 can be attributed to competition among agents competing for listings. This slight uptick in 2021 doesn’t change that,” he says. “Instead, It appears that Realtors are not giving ground as much in their negotiations with sellers than they had in years past.”

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