What’s fair? | How much realtors make | Who pays realtor fees? | Saving on commission
The average realtor commission in Texas is 5.78%, which equates to a typical realtor fee of $14,300 for an
Knowing the standard commission rate in your area can help you avoid overpaying for a realtor and accurately estimate costs when you sell your home.
You might be thinking, “Wow! $14,300 is a lot of money!” Well, luckily there are companies like our partners at Clever that can help you save thousands when you sell, by pre-negotiating low rates with top agents across the country.
✍ Why should you trust our numbers?
Our team strives to provide the most accurate data possible. We’re continuously reaching out to real estate agents across Texas, to gather the most current and accurate database of realtor commission rates on the web.
What is a fair commission for a real estate agent in Texas?
Since realtor commission is negotiable, what’s fair will ultimately come down to whatever rate you and your agent are comfortable with. That said, most realtors in Texas will expect a commission of around 5.78% — the statewide average.
It’s also worth noting that rates often don’t vary that much from agent to agent — most realtors charge rates that are inline with whatever’s typical in their area. In Texas, our data showed that a majority of realtors charge between 5.40%–6.16%.
| Commission rate | Percentage | Cost* |
|---|---|---|
| Low tier | 5.40% | $13,300 |
| Texas average | 5.78% | $14,300 |
| High tier | 6.16% | $15,200 |
So why does realtor commission cost so much? Well, there are a couple of factors:
- Agents split their commission – The listing agent typically only takes home a fraction of the realtor fees.
- Listing a home involves risk – Realtors pay upfront for marketing costs (e.g. professional photos, advertising, staging, etc) and only get paid when your home sells.
- Finding clients can be hard and costly – Real estate agents spend time and money generating new business, an expense that’s often passed along to home sellers.
Some companies — like our partners at Clever — aim to make agents’ jobs easier so that they’re able to accept lower-than-average commission rates. By matching home sellers directly with realtors, Clever is able to reduce the cost of acquiring clients and negotiate lower realtor fees.
How much commission do realtors make in Texas?
When you sell a home with a realtor in Texas, your listing agent will typically take home 1.42% of the total sale price.
» MORE: What is a listing agent?
Less than you thought right? Even though the typical realtor fee in Texas is 5.78%, that money is actually split between your agent, the buyer’s agent, and each of their brokers.
Here’s and example of how commission is often spit on a sale in Texas:
| Category | Percentage |
|---|---|
| Seller's agent take home | 1.42% |
| Seller's agent's broker split | 1.42% (~50% of the seller's agent's commission ) |
| Buyer's agent take home | 1.46% |
| Buyer's agent's broker split | 1.46% (~50% of the buyer's agent's commission ) |
| Total commission | 5.78% |
» MORE: How commission splits work
How much realtors make on a typical sale in Texas: $3,500
On a typical home sale in Texas, the real estate agent that lists the home will take home around $3,500, assuming they split half of their commission with their broker.
Put another way, Texas realtors take home about $1,400 for every $100,000 in sale price.
Realtor earnings in Texas per year: $63,780
Real estate agents in Texas make $63,780 per year on average according to the Bureau of Labor Statistics, which is $790 more than the national average.
Who pays realtor commission in Texas?
In Texas, the home seller typically pays the realtor fees for all agents involved in the sale. This is the standard nationwide.
» MORE: Who pays realtor fees?
Realtor fees are baked into the price of the home and gets paid out of the proceeds when it sells. So home sellers don’t have to pay real estate commission up front; the agents get their cut when the deal closes. Here’s how that breaks down for a typical sale in Texas:
| Category | Amount | Percentage |
|---|---|---|
| Sale price | $247,200 | NA |
| Realtor fees | $14,300 | 5.78% |
| Seller closing costs | $2,500-7,400 | 1-3% |
| Mortgage payoff | $29,200 | 12% |
| Seller net | $196,300-201,200 | 79-81% |
Ways to save on Texas real estate commission
Even though the standard real estate commission in Texas is 5.78%, that doesn’t mean there aren’t ways to sell for less.
The following options are all ways sellers in Texas can save on real estate commission:
- Using an agent matching service like Clever that offers built-in savings
- Negotiating lower rates yourself
- Selling for sale by owner (FSBO)
Our Tips for Saving on Commission
It’s possible Texas home sellers could negotiate a lower commission for themselves in the current housing market. They may even have a successful FSBO sale if they’re up to the task.
Texas homes are selling at a faster pace than the national average, and listing prices have gone up nearly 10% compared to the same time in 2020. There isn’t much inventory in the state either, so prospective buyers are competing for a small pool of homes. All in all, this is a hot market that favors sellers.
Even in a seller’s market, using a low commission real estate service like Clever can help sellers reduce their commission fees without any hassle.
Advice current as of Aug. 18, 2021
» MORE: Tips for negotiating a lower commission rate
NOTE: For all the options detailed below, the savings will come by lowering (or cutting out) the listing agent’s commission. Regardless of how you sell, you’ll likely have to offer a competitive buyer’s agent commission, which in Texas is 2.93%.
🏅 Clever: Same top agents, lower rates
Clever is a free service that matches home sellers with top agents in their area for pre-negotiated low rates. You’ll only pay a listing fee of $3,000 or 1%, meaning that using Clever could save you around 30% on realtor fees when you sell.
Our Top Pick
- List for $3,000 or 1%
- Available nationwide
- Connect with top local agents
Clever Real Estate is our top pick because it delivers the best combination of savings and service of any low commission company we’ve reviewed.
Sellers save an average of $7,375 when they list with Clever, compared to a traditional 3% listing fee.*
*Average savings based on listing fees at four common price points: $100,000, $250,000, $500,000, and $750,000.
• Get low rates without having to negotiate or do extra work
• Custom agent matches based on your needs
• No obligation
• If you have a specific agent you want to work with, Clever may not be able to help you
• Premium listing services, like professional staging and drone photography, may not come standard
» MORE: Our full review of Clever Real Estate
👌 Negotiating lower rates on your own: Difficult, but not impossible
Realtor fees can be negotiated with your agent; you don’t have to just accept whatever rate they quote you. The caveat here is that many agents aren’t accustomed to reducing their fees, so you may find it difficult.
Good for Some
Negotiating Realtor Commission
Learn More- Pick your own agent
- Negotiate whatever you want
- Difficult to pull off
If you can pull it off, negotiating lower-than-average commission rates is a great way to save money when selling a home. However, you may find that many agents are resistant to the idea of reducing their typical realtor fee.
You may have more luck negotiating if you can argue that your home is going to be easy to sell — e.g. it’s in a really hot market, it’s in great condition, etc. — because that should mean less work for your realtor.
• Negotiate realtor fees as low as you want
• Work with whatever agent you choose (assuming they’ll accept lower-than-average rates)
• Many agents won’t negotiate
• You’ll still likely have to offer a competitor buyer’s agent commission of 2-3%
Unless you already have an agent that you’re set on working with, negotiating yourself won’t be your best option for saving on commission. Working with a low commission real estate company takes all of the legwork out of getting low rates, and is our recommendation for most home sellers.
🚩 FSBO: For experienced sellers only
If you’re a real estate novice, or simply don’t have the time to sell your home without a realtor, selling for sale by owner in might not be a good option.
For Savvy Sellers Only
For Sale by Owner
Learn More- No listing commission
- You do the legwork
- High risk
Selling FSBO could cut your commission costs in half, but unless you’re a seasoned real estate veteran it likely won’t be your best option for saving on realtor fees.
FSBO sellers take on more work and risk by forgoing the help of professional real estate agents. They’ll have to attract buyers, negotiate offers, and navigate legal paperwork. Additionally they’ll miss out on the local market expertise that top real estate agents provide, which is critical when trying to sell for as much as possible.
• Cut out listing agent commission (2-3%)
• You get complete control over how your home is marketed, and how the transaction is conducted
• Good if you already have a buyer or are selling to a friend or relative
• You’ll likely still have to offer a competitive buyer’s agent commission of 2-3%
• Commission savings may be offset by lower prices — home’s sold without the help of an agent typical have been shown to fetch 5.5% less
Selling your home for sale by owner in Texas lets you avoid paying the listing agent’s fee, effectively halving the cost of commission compared to selling with a traditional realtor.
The trade-off is that you’ll have to handle almost the entire home-selling process yourself. This not only takes a lot of time but also puts you at risk of making mistakes that a realtor could help you avoid.
Still think FSBO is right for you?
Consider using a flat-fee MLS service to boost your home’s visibility. These companies allow you to list on your local MLS — which is typically only possible by hiring a realtor — for around $100-300.
Methodology
Data on commission rates comes from a survey of over 900 agents conducted by our partner site, Clever Real Estate.
We also used reputable online sources for the following data points:
- Home values: Zillow
- Average mortgage debt: Federal Reserve Bank of New York
- Annual realtor earrings: the Bureau of Labor Statistics
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