How commission works | Getting low rates | Low commission companies | Methodology
📊 The data: We polled local agents and found that the average real estate commission in Alabama is 5.65%, which is higher than the national average of 5.45%. |
For a house sold for $155,782, this rate translates to $8,802 in real estate agent commission costs.
Realtor commission is usually the largest cost that home sellers face, but the upside is that it also represents the biggest potential for savings.
» MORE: Learn how Clever can help you save on commission.
Below, we cover everything you need to know commission costs in Alabama and also give you tips for getting low rates.
How real estate agent commission works in Alabama
There are two real estate agents involved in a typical home sale:
- The seller's agent (also called the listing agent), representing the home seller
- The buyer's agent, who represents the person buying the home
The seller's and buyer's agent get paid a percentage of the home's final price when the sale is finalized. This payment is called real estate agent commission, and is baked into the sale price of a home and split between the two agents.
» LEARN: More about how real estate commissions work.
Based on our research, the average commission split in Alabama has 47.79% of the commission going to the listing agent and 52.21% going to the buyer's agent.
Who pays for real estate commissions?
Home sellers are responsible for paying the real estate commission of both the agent representing them, as well as the agent representing whoever buys their home.
However, since the realtor commission is baked into the sales price you could say that the home buyer is paying — at least in-part — through a higher sales price.
» MORE: Who pays realtor commission.
How to save on real estate commission in Alabama
💰Best ways to save While there are a number of options for home sellers looking to save on commission, good options for most home sellers include:
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» MORE: Options for saving on realtor commission
Alabama’s real estate market currently favors sellers, who may be able to negotiate lower commission rates as a result.
If homes continue selling at their current rate, Alabama’s inventory of properties will be depleted in under two months. As demand soars, home values are also expected to climb by more than 7% in 2021.
Because homes are selling so quickly, your agent probably won’t have to work as hard to market your home — giving them some additional flexibility on commission.
Below we cover how you can negotiate lower rates, and list some of our recommendations of low commission real estate companies that you should consider.
Tips for negotiating realtor commission in Alabama
Successfully negotiating commission rates depends mainly on two factors: your situation and the housing market.
Factor | You may have an easier time negotiating low rates if... |
|---|---|
Your situation |
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The Alabama housing market |
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» LEARN: How you can negotiate lower commission rates.
While the personal factors that affect your ability to negotiate commission rates are unique to you, the local real estate market conditions will affect all home sellers in Alabama.
In a seller's market — where home sellers have more leverage than buyers — a listing agent's job is easier and they may be more inclined to offer lower commission rates. The opposite is true in a buyer's market.
📖Definitions Months of inventory, is measured by dividing the homes listed for sale in the most recent month by the number of homes actually sold in that month. It is a key indicator of how much supply and demand there is for houses in a market. Sale-to-list is calculated by dividing the median sale price by the median listing price in a given area. If homes in your area are generally selling for more than their listing price, that is a good indication that you are in a seller's market. Home values rising in your area indicate that demand is growing. Whereas if this figure is falling, then it's more likely that homes in your area are becoming less desirable. |
To judge the current state of the real estate market, you can look at three factors: months of inventory, sale to list price, and home value trends. Below, we've included a current breakdown of these factors in Alabama.
Stats and facts: The current state of the Alabama real estate market
Factor | Trends | Indication |
|---|---|---|
Months of inventory | There's 1.8 months of housing inventory on the market | Seller's market |
Sale-to-list price | Homes are selling for 98.90% of their listing price | Seller's market |
Home value | Home values have risen/fallen 7.08% year over year | Seller's market |
Low commission real estate companies in Alabama
Home sellers looking to save money when selling their home should consider a low commission real estate company. To help you out, Clever has picked some of the top discount and flat-fee MLS services across the state:
Discount real estate brokers in Alabama
Discount real estate brokers are companies that will list your home for a reduced commission percentage or flat rate. The catch is that the service might not be on-par with what you'd get from a top local agent.
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» MORE: About discount real estate brokers.
Flat-fee MLS listing services Alabama
Flat-fee MLS listing services offer to post your home on your local MLS for a low rate often around $100-300. The trade-off is that you'll have to handle almost the entire home-selling process yourself. If you're a real estate novice, this might not be a good option for you.
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» MORE: About flat-fee MLS services.
Methodology
Data on commission rates is based on a survey of 554 of our partner agents, in which we asked them to indicate the typical rates for both buyer's and seller's agents in their area.
Additionally, we utilized the following data from Zillow and Realtor.com:
- Home values, list prices, and sale prices: Based on Zillow data as of September, 2020
- Sale prices and sale-to-list ratios: Based on Redfin data as of September, 2020 (unless specified otherwise)
- Months of inventory: Based on Realtor.com data as of September, 2020