Average Real Estate Commission in Alabama | Updated for 2023

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  Written by Lindsay Stefan

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  Edited by Kristy Snyder

In this guide: Realtor fees in Alabama| How Alabama agents set rates | How to save on commission in Alabama | FAQ | Research methodology

The average total real estate commission in Alabama is 5.44%. This includes a 2.72% listing commission and a 2.72% buyer’s agent commission. In Alabama, sellers typically cover the real estate commission fees for both agents out of their sale proceeds at closing. 

On the average Alabama home price of $327,514, you’d pay $10,845 in real estate commission fees as a seller.

Realtor commission rates vary considerably by region, city, or even neighborhood. The agent and brokerage you choose, as well as the specifics of your sale — like your home’s value, location, and condition — are also factors.

This guide breaks down how much commission sellers can expect to pay in Alabama. We’ll also explain why Alabama commissions are what they are (and offer up some tips that could help you save). 

Alabama real estate commission: How much will you pay?

Here’s what you can expect to pay in realtor commission based on the average home price of $327,514.

	Average rate	Cost
Listing agent commission	2.72%	$5,422
Buyer’s agent commission	2.72%	$5,422
Total realtor fees	5.44%	$10,845

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How much is Alabama real estate commission?

In Alabama, the average total realtor commission is 5.44%. That’s a tiny bit higher than the national U.S. average of 5.37%. This amount includes both the buying and listing agents’ commissions, both of which are usually paid by the seller.

In the past few years, Alabama real estate commissions have trended downward. The average real estate commission in Alabama was 5.60% in 2021. 

According to agent Trey Sippial of Montgomery-based River Region Realty, total commission rates fluctuate based on the local market. 

“For example, in Auburn or Birmingham, to be competitive, the listing fee typically needs to be 5% or less,” says Sippial. “For Montgomery, to be competitive, it needs to be no more than 6%.”

Part of that variation in total commission is due to fluctuations in the buyer’s agent commissions.

“A typical buyer’s agent commission in Alabama is 2–3%, but that varies by city,” says Sippial. “For Mobile, it’s around 2–2.4%. In Montgomery, it’s around 3%. In Auburn and Birmingham, it’s 2.5%.” 

Changing market dynamics are another huge factor in commission rates. Currently, Alabama’s real estate market appears to be cooling slightly. The number of home sales in 2022 fell by 34.9% year over year. Sippial predicts commission rates will stay steady or even rise since agents will close fewer sales overall.

“When the market was skewed more to sellers, there was definitely a need to be more flexible with sellers because they felt that selling was much easier,” Sippial says. “The converse is true in a buyer’s market.”

The best way to get a feel for realtor fees in your local market is to ask realtors what they charge, and how much they’re open to negotiation.

How real Alabama agents and brokers set commission rates

Agents we talked to indicated that their commission rates are flexible — but only to a point. Sippial is willing to negotiate the total commission within reasonable limits.

“We don’t like to go below 5%,” says Sippial. “We will certainly be competitive as needed between 5–6%. I don’t go higher than 6% in most cases.”

Agents often consider the market when they set their commission. If you’re selling a home that’ll likely get multiple offers after your first open house, your agent will be more likely to give you a commission discount since they won’t have to put a lot of hours into the listing. 

On the other hand, if you have a unique home that may take months to find a buyer, it doesn’t make sense for an agent to take less than full commission because they’ll have to put in more time.

Agents also have to consider their commission split. In addition to sharing the commission between the listing agent and the buyer’s agent, each agent also has to share their portion with a broker. Your listing agent may end up with as little as 1.36% of your home’s sale price.

Another factor that determines an agent’s commission rate is their overhead costs. “I have marketing expenses, I have to pay my transaction coordinator, I have office expenses, MLS fees, gas,” says Sippial. 

Another Alabama agent noted they have to pay for online ads, photography, videography, signs, open houses, staging and props, referral fees, and caravan fees. Here’s a list of other fees Alabama realtors have to pay:

• Taxes: Most real estate brokers and agents are considered self-employed and must pay taxes on their transaction earnings each year
• Association dues: $150–300
• Multiple Listing Service (MLS) fees: $265-–640 annually
• State license fees: $85–150 annually
• Administrative staff: Assistants can help with bookkeeping, scheduling, and other day-to-day operations
• Marketing costs: Professional photos, advertising, open houses, and staging

Agents have to pay these expenses no matter how many sales they’ve closed recently — and the commission helps with that.

How can I save on realtor fees in Alabama?

While it may take some outside-the-box thinking, there are a few ways you can save on realtor fees:

• Negotiate with a traditional real estate agent or broker
• Work with a discount real estate broker
• Sell without a realtor

Negotiate with a traditional realtor

One Alabama agent we spoke to said that a great way to negotiate a reduced commission is to commit to selling your present home and buying your next home with them. Since they’ll be making two commissions through you, they’ll be more open to reducing the listing commission.

This agent also noted that they’d be inclined to reduce commission for a repeat client, friend, or family member. Loyalty is valuable — and so are personal references!

Negotiating can be awkward and uncomfortable. If you’d rather avoid it, you can find an agent through Clever Real Estate. They’ve already pre-negotiated a 1.5% listing fee with experienced agents in Alabama, so you don’t have to. Find an Alabama agent for less.

Work with a discount real estate broker

Some brokerages offer discounted realtor fees upfront. These companies can help you save money, but some come with risks or worse-than-average customer service. Do your research to understand what you’ll get for the discounted fee. See how we ranked discount real estate brokers in your area based on savings, customer reviews, and our experience mystery shopping with each company.

To save an average of $7,000 on your listing fee without sacrificing service, Clever Real Estate is your best option.

Sell without a realtor

The ultimate way to save on realtor fees is to sell without a realtor — though we don’t recommend this to most Alabama sellers.

You’ll avoid paying a listing commission, but you’ll have to do all of the work of a listing agent on your own. Plus, you’ll still want to pay a full buyer’s agent commission to incentivize other agents to show your home to their buyers.

Learn more about how to sell a house without a realtor in Alabama.

Other FAQs about Alabama real estate commissions

Research methodology

We regularly survey our pool of 14,000 partner agents nationwide on the commission rates they use for buying and selling. These data points are averages based on responses we’ve received from 9 agents across Alabama. 

We also interviewed Trey Sippial River Region Realty in Montgomery, Alabama.

Sources

• Zillow Home Value Data
• Alabama Housing Market, Redfin
• Dues Information, National Association of Realtors
• The Greater Alabama MLS, Birmingham Association of Realtors
• Fee Schedule, Alabama Real Estate Commission