Real estate agent commissions in Texas are on the rise, creating a notable contrast with the national trend. While the average commission rate across the United States has decreased, Texas homeowners are now paying a higher percentage of their home's sale price to agents, according to recent data.
This increase comes at a time when a nationwide survey identified agent commissions as the primary regret for recent home sellers, highlighting a growing concern over the costs associated with selling a property.
Key Takeaways
- The average real estate commission in Texas increased to 5.57% in 2024, up from 5.5% in 2021.
- In contrast, the national average commission rate fell from 5.45% to 5.32% during the same period.
- Data from September shows the Texas average climbed even higher to 5.85%.
- Statewide, Texas has approximately a 7-month supply of homes, with the Dallas market showing a 6.57-month supply.
A Diverging Path for Commissions
While homeowners in many parts of the country are seeing a slight reduction in real estate agent fees, Texans are experiencing the opposite. The divergence between state and national trends is a key finding in a recent report from the home selling platform Clever Offers.
Between 2021 and 2024, the average commission rate paid by sellers nationwide declined. This shift suggests a more competitive market among agents in other states. However, the Texas market has moved in the other direction, with fees steadily climbing.
Commission Rate Comparison: 2021 vs. 2024
Texas: Increased from 5.5% to 5.57%
National Average: Decreased from 5.45% to 5.32%
This upward trend in Texas adds a significant cost for sellers. On a home sold for the statewide average price of $360,700, a commission of 5.57% amounts to over $20,000.
Breaking Down the Latest Figures
A closer look at the most recent data reveals an even steeper rate. In September, the average commission in Texas reached 5.85%. This rate is typically split between the agent representing the seller and the agent representing the buyer.
According to the report, the split in September was nearly even:
- Buyer's Agent Commission: 2.97%
- Listing Agent Commission: 2.88%
This data confirms that both sides of the transaction are commanding higher fees within the state. For sellers, this means a larger portion of their home equity is allocated to transaction costs.
Understanding Agent Commissions
A real estate commission is a fee paid to agents for their services in a property sale. It is typically a percentage of the final sale price and is paid by the seller from the proceeds of the sale. This fee is then divided between the seller's agent and the buyer's agent.
The Texas Housing Market at a Glance
The rising commissions are occurring within a specific market context. Early October data provides a snapshot of the housing landscape across Texas, indicating a market that is beginning to balance after years of high demand.
Statewide, the housing inventory stood at 151,914 homes. This represents about a seven-month supply, a figure that suggests a market moving away from the intense seller's advantage seen in previous years. A market is generally considered balanced with a six-month supply.
Key Statewide Metrics
The data from early October highlights several important indicators for the Texas market:
- Median Days on Market: 77 days
- Median Listing Price: $369,000
- Average Selling Price: $360,700
The fact that the average selling price is slightly below the median list price suggests that some negotiations are taking place, and not all homes are selling above asking price.
Focus on the Dallas Market
Zooming in on the Dallas metropolitan area, the market dynamics show some unique characteristics. Dallas had an inventory of 42,784 homes, translating to a 6.57-month supply. This is slightly tighter than the statewide average but still points toward a more balanced environment for buyers and sellers.
The median time a home spent on the market in Dallas was 76 days, nearly identical to the state average.
Dallas Market Snapshot
- Housing Supply: 6.57 months
- Median Days on Market: 76
- Average Listing Price: $419,450
- Average Selling Price: $432,600
Interestingly, the average selling price in Dallas was higher than the average listing price. This indicates that despite a growing inventory, demand in certain Dallas neighborhoods or for specific types of properties remains strong enough to drive prices above their initial listing.
Options for Home Sellers
The rising cost of commissions is a significant financial consideration for anyone looking to sell their home. A prior survey from Clever Offers found that high commission fees were the biggest regret for sellers nationwide.
Homeowners are not without options, however. It is important for sellers to understand that commission rates are often negotiable. Before signing a listing agreement, sellers should have a direct conversation with potential agents about their fee structure.
It’s essential to discuss and agree upon commission fees before signing any listing agreements to ensure clarity and avoid unexpected expenses.
In addition to negotiating with traditional agents, sellers can also explore alternative models. Discount brokerages, for example, often offer services for a lower percentage or a flat fee. These services may vary, so it is crucial for sellers to research what is included and ensure it meets their needs.
As the Texas real estate market continues to evolve, understanding all associated costs, especially agent commissions, is more important than ever for homeowners aiming to maximize their returns.
