Whether you're selling a home in sunny California or a cozy retreat in Maine, knowing your state or region's typical real estate agent commission rates is crucial. These rates can significantly impact how much money you earn on your home sale.
Recent research by Clever has shed light on the average rates across each state, revealing a national average of 5.49%, typically shared between the buyer's and seller's agents. However, these rates are not uniform and can vary significantly from one state to another.
Also remember that realtor commissions are completely negotiable. Some discount brokerages, like Clever Real Estate, even negotiate for you.
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Average commission rates: State-by-state
Most and least expensive states
To give a clear picture of commission costs across various states, we've organized our findings in two straightforward ways: by rate and by total dollar amount. This approach helps us see the full story of state expenses.
First, we look at states based on their rates. It tells us how expensive commission is as a percentage, like a quick snapshot of how much more or less each state charges compared to others. It can help show which states are relatively more costly or affordable.
Next, we focus on the total dollars spent. This view is all about the actual money involved - the total amount a seller each state spends, on average. It's a more concrete way of seeing which states spend the most and least in real terms.
Most expensive (by total dollars spent)
| State | Commission (dollars) |
| Hawaii | $40,188 |
| California | $38,123 |
| Massachusetts | $32,080 |
| Washington | $29,718 |
| Colorado | $29,690 |
Most expensive (by rate)
| State | Commission rate |
| West Virginia | 6.67% |
| Mississippi | 6.07% |
| Kentucky | 6.00% |
| Wyoming | 6.00% |
| Alaska | 6.00% |
Least expensive (by total dollar spent)
| State | Commission (dollars) |
| Mississippi | $10,406 |
| West Virginia | $10,490 |
| Lousiana | $10,862 |
| Oklahoma | $11,708 |
| Iowa | $11,749 |
Least expensive (by rate)
| State | Commission rate |
| Hawaii | 4.78% |
| Delaware | 4.88% |
| Utah | 4.90% |
| North Dakota | 5.00% |
| Oregon | 5.03% |
Average commission rates by region
Understanding regional commission rate variations is crucial for real estate professionals and homeowners. These differences reflect each area's unique economic, demographic, and real estate market conditions.
Northeast
| State | Average rate |
| Connecticut | 5.47% |
| Maine | 5.17% |
| Massachusetts | 5.45% |
| New Hampshire | 5.25% |
| New Jersey | 5.21% |
| New York | 5.39% |
| Pennsylvania | 5.48% |
| Rhode Island | 5.50% |
| Vermont | 5.49%* |
| Total | 5.38% |
*Note: We did not receive enough responses for this state. Therefore, the percentage shown is the national average.
The Northeast region, known for its diverse markets ranging from rural landscapes to bustling metropolitan areas, shows the lowest average commission rate of any U.S. region at 5.38%.
This could be attributed to the high competition among agents in densely populated areas like New York and New Jersey and the relatively stable real estate markets in states like Maine and Vermont.
Southeast
| State | Average rate |
| Alabama | 5.45% |
| Arkansas | 5.99% |
| Delaware | 4.88% |
| Florida | 5.37% |
| Georgia | 5.81% |
| Kentucky | 6.00% |
| Louisana | 5.56% |
| Maryland | 5.34% |
| Mississippi | 6.07% |
| North Carolina | 5.52% |
| South Carolina | 5.62% |
| Tennessee | 5.58% |
| Virginia | 5.45% |
| West Virginia | 6.67% |
| Washington D.C. | 5.49%* |
| Total | 5.65% |
*Note: We did not receive enough responses for this state. Therefore, the percentage shown is the national average.
The Southeast presents a more varied landscape than other regions. With an average commission rate of 5.65%, it is the second most expensive region for selling a home.
This region's diverse economic conditions, from the booming urban centers in Florida to the more rural areas of West Virginia, contribute to this variability.
Delaware offers the second lowest average rate nationally, while West Virginia leads with the highest, possibly reflecting the lower property values within the region.
Southwest
| State | Average rate |
| Arizona | 5.44% |
| New Mexico | 5.90% |
| Oklahoma | 5.95% |
| Texas | 5.73% |
| Total | 5.76% |
The Southwest, although the most expensive region with an average rate of 5.76%, encompasses only four states. This smaller sample size may impact the average rate, reflecting specific market conditions in states like Texas and Arizona.
These areas have seen significant growth and development, potentially influencing the higher commission rates.
Midwest
| State | Average rate |
| Illinois | 5.35% |
| Indiana | 5.56% |
| Iowa | 5.67% |
| Kansas | 5.58% |
| Michigan | 5.92% |
| Minnesota | 5.82% |
| Missouri | 5.58% |
| Nebraska | 5.25% |
| North Dakota | 5.00% |
| Ohio | 5.99% |
| South Dakota | 5.49%* |
| Wisconsin | 5.15% |
| Total | 5.53% |
*Note: We did not receive enough responses for this state. Therefore, the percentage shown is the national average.
The Midwest, with an average rate of 5.53%, sits in the middle range nationally. This region's real estate market is marked by urban and rural settings, with states like North Dakota and Wisconsin offering some of the lowest rates.
However, with their lower average property values, states like Ohio and Michigan tend to have higher rates, impacting the overall regional average.
West
| State | Average rate |
| Alaska | 6.00% |
| California | 5.11% |
| Colorado | 5.62% |
| Hawaii | 4.78% |
| Idaho | 5.50% |
| Montana | 5.50% |
| Nevada | 5.80% |
| Oregon | 5.03% |
| Utah | 4.90% |
| Washington | 5.25% |
| Wyoming | 6.00% |
| Total | 5.41% |
The West shows a unique trend, where states with higher property values like Hawaii and California have lower percentage-based commission rates. This is likely due to the larger dollar amounts involved in transactions, allowing for lower percentage rates while maintaining profitability for agents.
States with lower housing prices, such as Wyoming and Idaho, see higher average rates, possibly compensating for the lower overall property values.
Why commission rates vary by state and region
Home value differences
One of the key factors driving differences in real estate commission rates across states and regions is the variance in home values. Property values can fluctuate widely from one area to another, and these fluctuations likely directly impact commission rates.
We often see lower percentage-based commission rates in regions with higher-value properties, such as New York and California. The rationale behind this is straightforward: even with a lower percentage, high-value properties still yield high total commissions due to higher sale prices. So agents are generally more willing to accept a lower rate in those states.
Yet, in areas where property values are lower, like in some parts of Ohio, commission rates tend to be higher in percentage terms. This is because the total commission earned on lower-value homes would be significantly less if the percentage rate were as low as in high-value areas.
State variations in realtor commission disclosure
Real estate commission disclosure practices vary significantly from state to state, reflecting differing legal and regulatory frameworks. These variations influence how and when the real estate transaction process discloses commission rates to buyers and sellers.
In some states, there are stringent requirements for disclosing commission rates. This could include mandating the inclusion of commission rates in the listing agreement or requiring that these rates be communicated at specific stages of the transaction.
For example, in Washington State, a new commission law mandates that real estate agents secure a brokerage services agreement with both buyers and sellers before offering any services. [1] This includes upfront communication about realtor commission and other service costs.
Other states prioritize overall transparency and fairness, without specifying the exact timing and method for disclosing commissions. These states emphasize clear communication of all costs, including realtor commissions, without being bound to a set schedule or format.
For example, Texas required real estate professionals to act ethically and transparently. However the state doesn't mandate the exact moment when commission rates must be disclosed in the transaction process.
Dual agency
The legality of dual agency, where a single realtor represents both the buyer and seller in a transaction, varies by state and can influence the commission you pay. Some states, such as Colorado and Oklahoma, have outlawed dual agency entirely.[2]
In states where dual agency is permitted, it could potentially reduce overall commission costs, as one agent handles both sides of the deal (and therefore may be willing to accept a lower overall commission rate).
However, this practice is not without its complexities and potential conflicts of interest.
Options for negotiating realtor commissions
This page provides the average real estate commission rates for each state and region, but remember that these rates can vary depending on the specific market and the individual agent involved. If you have strong reasons to negotiate for a lower commission, it's worth attempting to secure a lower rate.
However, successfully negotiating a lower rate isn't very common. According to a study by the National Association of Realtors (NAR), only about 22% of recent home sellers managed to discuss and then successfully reduce the commission rate with their agent.[3]
On the other hand, some discount brokerages, such as Clever Real Estate, offer a different approach by handling the negotiation process on your behalf. Choosing a service like this can lead to considerable savings and eliminate the need for you to negotiate the rates personally.
FAQ
What percentage do most realtors charge on a home sale?
Real estate commission costs an average of 5.49% nationwide, but varies by state from 4.45% to 6.34%. Most realtors charge 2.5-3% to represent a home seller or buyer in a transaction.
What state has the highest commission rates?
The highest commission rates are found in West Virginia, Mississippi, and Kentucky. However, the most expensive states to sell a home on a dollar basis are Hawaii, California, and Massachusetts, due to their higher average home values.
What state has the lowest commission rates?
The lowest commission rates are found in Hawaii, Delaware, and Utah, which all charge sellers less than 5% on average.
