Average Realtor Commission in Minnesota

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  Written by Jon Stubbs

Average Minnesota realtor fees | NAR lawsuit changes | How to save on commission in Minnesota | Negotiating realtor fees | Research methodology

Home sellers pay an average of 5.77% in real estate commission when selling a home in Minnesota. This includes a 3.15% listing agent commission and a 2.62% buyer’s agent commission.^ℹOur data is based on a survey of 734 real estate agents and brokers across the U.S.

To put those costs into context, here’s what you’d pay in total commission at three different price points:

Home sale price	Total commission cost
$250,000	$14,425
$510,000	$29,427
$840,000	$48,468

No matter what price your sell your home for, 5.77% is a lot to pay in real estate commission in Minnesota.

The best option for most people is to find a realtor for free through our referral service, which negotiates 1.5% listing fees with top local realtors at trusted brands like Keller Williams and RE/MAX. You’ll get guaranteed full service for a fraction of the cost.

At 1.5%, you’d pay just $11,828 in listing commission on a typical Minnesota home, up to 39% less than the average rates. Fill out this form to get matched with top-rated agents offering lower commission fees.

Who pays real estate commission in Minnesota?

In Minnesota, sellers are responsible for paying their listing agents directly. Traditionally, sellers pay the listing agent and set the fee they’re willing to pay a buyer’s agent. But as of August 2024, buyer’s agents must negotiate rates directly with the buyers they represent, following a lawsuit against the National Association of Realtors (NAR).

Most buyers will still ask sellers to pay this fee as a concession from their sale proceeds so that the buyer doesn’t have to bring more cash to closing. While you might find a buyer willing to pay for their own agent, it’s wise to budget for the buyer’s agent fees ahead of time.

Our guide explains what you can expect to pay in commission when selling a home in Minnesota. Plus, you’ll learn why Minnesota commission rates cost what they do and how you can save on them when selling.

Current Minnesota real estate commission in 2024

Your exact commission depends on your final selling price, the home’s condition, and the brokerage you choose. Commissions also vary by region.

Here’s an estimate of what you can expect to pay in listing agent and buyer’s agent commission based on the typical Minnesota home price of $336,954.

	Average rate	Cost
Listing agent commission	3.15%	$10,614
Buyer’s agent commissionℹSellers often pay the buyer’s agent commission as a seller concession, but they aren’t required to.	2.62%	$8,828
Total realtor fees	5.77%	$19,442

If these numbers seem high, you can always negotiate commissions with your realtor, or you can use our free service that negotiates a lower rate for you.

How the 2024 NAR lawsuit affects Minnesota home sellers and buyers¹

A recent ruling has forced the National Association of Realtors to change how real estate professionals do business. Starting in August 2024:

• Buyer's real estate agents must present an "agency agreement" that includes a description of the agent’s services to a potential home buyer.
• Buyer's agents must negotiate their fee directly with the buyer ahead of signing the contract.
• Listings cannot include buyer's agent commission.

Before the settlement, a real estate agent would split commissions: a listing agent would collect a 6% fee from the seller and give half of it to the buyer's agent. The home buyer typically wouldn't pay any agent commissions.

Sellers traditionally advertised the buyer's agent cut on the home listing to entice buyer agents to show the home. This practice also made it clear who would pay for the buyer's agent — usually the listing agent — before a prospective buyer even toured the home.

Will the NAR lawsuit change who pays real estate commission in Minnesota?

Buyers are more likely to see the immediate effects of the NAR ruling than sellers and should budget for their agent's 2–3% commission, even if the seller ends up covering that fee.

Many sellers may offer concessions to cover the buyer's agent's fees, but only after an offer is made and negotiations begin. In a competitive seller's market, however, a seller with all of the leverage might not offer anything to the buyer's agent.

Until buyers know for sure, they should count on being on the hook for their agent's 2–3% commission.

How much is real estate commission in Minnesota?

On average, sellers pay 5.77% in total realtor fees in Minnesota, compared with the national average of 5.32%.

We contacted Michael McGivern of Bridge Realty in the Twin Cities to learn more about the average commission in the state.

“In 2021 and into 2022, I saw a lot of buyer’s broker’s compensations in the 2–2.5% range, which told me agents were taking lower listing side commissions to “win” a listing,” says McGivern. “Or they were offering a lower buyer’s side commission because they knew the buyer’s side was so desperate to get their clients into a home that they’d take whatever they could get.”

Commission fees can also fluctuate depending on the location. For instance, a realtor might charge a different rate to sell a single-family home in a suburban community than a condo in a trendy neighborhood.

Another factor affecting commission rates is market trends.

Sellers can leverage a hot market (where homes are going off-market quickly) to convince real estate agents to work for a lower rate since they'll have an easy time selling the home.

To figure out if your local area is a seller’s market or buyer’s market, look at these three statistics:

• Months of inventory — how long it would take for all current listings on the market to sell if no new properties were added
• Sale-to-list price ratio — how much homes sell for versus how much they list for
• Home value trends — whether home values rise or fall year over year

If these factors suggest you’re in a seller’s market, you might have an easier time negotiating real estate commission with your listing agent. If the market conditions give buyers more leverage, your agent will need to work harder and may be less likely to cut their rate.

Here’s what the Minnesota real estate market looks like right now:

Factor	Trends (averages)	Indication
Months of inventory	There’s 1.50 months of housing inventory on the market	Seller's market
Sale-to-list ratio	Homes are selling for 99.50% of their listing price	Seller's market
Home values	Home values have risen 12.20% year over year	Buyer's market

To secure the best commission rate, research and compare agents. Even within your local area, agents may offer varying fees based on the services they provide.

How Minnesota real estate agents and brokers set commission rates

Real estate agents typically have some degree of flexibility when it comes to setting their commission fees. “I offer sellers three options with commissions at five, six, and seven percent with different features at each level (like a car wash),” says McGivern. “This allows the sellers to tell me what they value and sets them up for a great experience. Most people still choose six percent, but they appreciate being able to dictate what I charge, not the other way around.”

Agents usually base the fee on what their competitors in the region are charging, as well as the amount of time and effort they expect to invest in the sale.

For example, an agent who plans on extensive social media marketing and professional drone photography will likely charge a higher fee than another agent who applies only the basics, such as listing the property on the MLS.

Typically, each agent shares a portion of their commission with their brokerage. The listing agent and the buyer’s agent receive their agreed-upon fees, and then each of them split the commission with their broker.

Minnesota real estate agent fees can be expensive because agents have lots of overhead costs, including:

Taxes: 15.3% of income Most real estate brokers and agents are considered self-employed2, which means their transaction earnings are subject to federal self-employment tax, which is about twice the rate a regular employee would pay.

Brokerage fees: Up to 50% of commission Agents must split their commission with their sponsoring brokerage. This means if their commission is 3%, their take-home pay is really just 1.5%.

Multiple listing service (MLS) fees: $240–600 per year3 The MLS is a database of homes for sale, updated regularly by realtors.

Association dues: $201 per year4 Realtors must be dues-paying members of local associations and boards to get access to the MLS.

Administrative staff: $350–5005 Realtors often have assistants who help with real estate transactions, bookkeeping, scheduling, and paperwork.

State license fees: $60–615 per year6 Agents must maintain a state-issued license to work in the state. Yearly fees average about $150, but some states are more expensive than others.

Marketing costs: Varies Most agents working for commission pay expenses like professional photos, drone videos, advertising, open houses, and staging out of pocket.

How can I save on realtor fees in Minnesota?

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

Most sellers will negotiate commissions — agents are used to that. But it’s important that you recognize the true value of having an agent’s help.

If you’re considering negotiating with a real estate agent, ask yourself how difficult your home is going to be to sell. If it’s situated in a rapidly growing neighborhood with a high demand for homes, you can make the case that selling it will require minimal effort and time.

On the other hand, if your home is located in a rural area that appeals to a specific niche market, your agent will likely need to put in more work and can justify a higher commission.

The key to successfully negotiating commission is having an honest conversation with your agent about what you need and what the agent can deliver. Finding a good match will set you and your agent up for a successful sale.

While it’s technically possible to negotiate your real estate commission, not all agents will be willing to lower their fees. They may have a set minimum imposed by their brokerage, or they may not change their rate for an individual seller.

A simpler way to pay less is by working with a real estate brokerage that already offers lower rates.

Work with a real estate brokerage that offers built-in savings

For most Minnesota sellers, the best way to save on real estate commissions is by working with a low-commission real estate brokerage. Realtors like the ones we partner with provide the same level of service and support you’d get from a traditional realtor — but they charge less.

Our free service matches you with top agents from reputable brokerages in your area. You can compare and interview agents, or walk away anytime. If you find an agent through our service, you’ll pay a low 1.5% listing fee — half the rate most realtors charge. Check out your agent matches today.

Sell without a real estate agent

The surest way to not pay any listing commission is to sell the home without a realtor. However, we don’t recommend this option for most Minnesota sellers.

You won’t pay a listing commission, but you’ll have to do all of the work of the agent yourself, which can take up a lot of your time and energy. Also, you’ll still need to offer a competitive buyer’s agent commission to entice other agents to bring their clients to see your home.

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

Research methodology

We regularly survey our 19,000+ partner agents nationwide on their commission rates for buying and selling. These data points are averages based on responses we’ve received from 10 agents in Minnesota.

We also contacted Michael McGivern of Bridge Realty in the Twin Cities to learn about average real estate agent commission and negotiation in the state.

Sources

1. National Association of Realtors. Handbook on Multiple Listing Policy. “No Compensation Offers in MLS, Section 1: No Offers of Compensation in MLS (Policy Statement 8.11).” Accessed on 9/9/2024. ↩︎
2. Internal Revenue Service. “Self-Employment Tax.” Accessed on 9/9/2024. ↩︎
3. Realtyna. “How Much Does It Cost to Get Access to the MLS?” Accessed on 9/9/2024. ↩︎
4. National Association of Realtors. “Realtors Membership Dues Information.” Accessed on 9/9/2024. ↩︎
5. Transactly. “What is the Typical Transaction Coordination Fee?” Accessed on 9/9/2024. ↩︎
6. VanEd. “How Much Does It Cost to Get a Real Estate License in Each State?” Accessed on 9/9/2024. ↩︎