What’s the Average Maryland Real Estate Commission Rate?
- Published on
- 8-10 min read
-
Hayley Abernathy Contributing AuthorClose
Hayley Abernathy Contributing AuthorHayley M. Abernathy is a freelance writer and editor based in Knoxville, Tennessee, covering lifestyle and real estate topics.
-
Richard Haddad Managing EditorClose
Richard Haddad Managing EditorRichard Haddad is the managing editor of HomeLight.com. He works with an experienced content team that oversees the company’s blog featuring in-depth articles about the home buying and selling process, homeownership news, home care and design tips, and related real estate trends. Previously, he served as an editor and content producer for World Company, Gannett, and Western News & Info, where he also served as news director and director of internet operations.
At HomeLight, our vision is a world where every real estate transaction is simple, certain, and satisfying. Therefore, we promote strict editorial integrity in each of our posts.
Editor’s note: On March 15, 2024, the National Association of Realtors (NAR) announced a landmark lawsuit settlement that will change the way real estate agent commissions are handled in the future. These changes will “decouple” seller and buyer agent compensation. Industry experts predict that this decoupling will likely lower agent fees and give buyers the ability to negotiate commission amounts directly. Learn more.
Most real estate agents in Maryland get paid through commissions. Commissions are typically calculated as a percentage of a property’s sale price, though some brokerages will charge a flat fee. The average agent commission rate nationwide is 5.8% of the home sale price, according to HomeLight’s real estate transaction data of thousands of home sales each year. But how does that compare to the average real estate commission rate in Maryland?
In this post, we’ll help you determine how much commission you might pay on your Maryland home sale, and what options are available to earn the highest proceeds possible.
Find a Maryland Agent 100% Worth Their Commission
HomeLight can connect you with a top-performing, trusted agent in your Maryland market. We analyze over 27 million transactions and thousands of reviews to determine which agent is best for you based on your needs.
What’s the average real estate commission in Maryland?
According to James Weiskerger, a top Baltimore real estate agent with more than two decades of experience, you can expect to pay between 5% to 6% in agent commissions when selling a home in Maryland — with some variation based on location within the state and depending on the range of services provided. On a property worth the current statewide median home sale price of $380,000, that amounts to $15,200–$22,800 in commission costs.
Weiskerger further explains the range this way: “You have various brokerages — like discount brokerages — that probably charge around four and a quarter (percent), and you have full retail brokerages that offer a lot more services, that their commission is probably around six percent.”
Using an overall statewide average of 5.5%, here’s a breakdown of how much you might pay in real estate commissions based on what a typical home sells for in seven of the largest cities in Maryland:
| Maryland city | Median home price | Typical commission at 5.5% |
| Baltimore | $206,500 | $11,358 |
| Frederick | $429,900 | $23,645 |
| Gaithersburg and Rockville | $535,278 | $29,440 |
| Bowie | $415,000 | $22,825 |
| Hagerstown | $295,250 | $16,239 |
| Annapolis | $445,000 | $24,475 |
Median home price source: Maryland Realtors®, mdrealtor.org.
HomeLight gathers agent commission data from cities throughout the U.S. To see if we have commission rates for your city, try our Agent Commissions Calculator. You might also be interested in our Home Value Estimator.
Still curious about commission rates in Maryland? Here are the answers to common questions about real estate agent commissions:
Who pays real estate commission fees?
The commission in Maryland is typically paid by the home seller, and from that commission, the seller’s agent typically offers what’s sometimes called a “buyer’s coop fee” — a percentage that will then be paid to the buyer’s agent upon the deal’s closing.
“That fee ranges between two percent on the really low end to as high as three-and-a-half percent,” Weiskerger explains. “It just depends on the property they’re selling, and if they’re trying to incentivize the buyer’s agent to bring the buyer.”
By state law, listing agents are required to say on a home’s MLS listing whether or not a buyer’s agent will receive a commission via a buyer’s coop fee and how much that would be. That way, the agent knows when taking a client to a house how much he or she might make from the transaction.
Do buyers ever pay commission fees?
Yes, that could happen, although it’s not typical. To ensure that they are compensated fairly — even if a listing agent offers a very low buyer’s coop fee — a buyer’s agent may ask a buyer to sign a buyer agency agreement stating that the buyer’s agent will be guaranteed a certain percentage of the sales price no matter what.
For example, “Let’s say (the seller is) only paying one percent,” illustrates Weiskerger, “but your buyer agency agreement says that the buyers owe three percent (to the buyer’s agent). In that case, the buyers will know in advance that they would owe (their agent) two percent of the sales price if they bought that particular house.”
When is the commission paid?
The real estate commission will automatically be deducted from the sale proceeds at the time of closing. Until then, you won’t owe any money to the real estate agent. In short, your listing agent typically doesn’t get paid unless they sell your home. And an experienced, motivated agent will ultimately help you walk away with higher proceeds.
If you’re curious about how much you might make on your home sale after paying commissions and other selling costs, try our Net Proceeds Calculator.
Does the agent get to keep the full commission?
Although the seller typically pays the entire commission, the listing agent, who is representing the seller in a transaction, doesn’t keep it all. Part of their commission will go toward marketing your property with professional photography, open houses, offline marketing, and more.
The commission is also typically split 50/50 with the buyer’s agent to compensate them for bringing a buyer to the sale and coordinating the buy-side of the transaction. So, around 2.5% to 3% goes to the listing agent, and the other 2.5% to 3% goes to the buyer’s agent.
Both the listing agent and the buyer’s agent will then share a percentage of their commission with their sponsoring broker.
These split rates can vary; however, it’s common for the listing agent to give their broker anywhere from 30%-50% of their commission, depending on the agent’s level of experience, their market size, and brokerage agreement.
“So every agent in Maryland has to work for a brokerage,” explains Weiskerger, “and every brokerage has different arrangements with their agents and what they provide. So, at our brokerage…, we take a portion of their commission. However, we offer a tremendous amount of support, marketing, and mentorship.”
There are brokerages in Maryland that take little or even none of the agent’s commission, he adds, “but they don’t offer you (the agent) really anything — they just give you maybe an office at a shared space. You don’t get admin support, you don’t get marketing, you don’t get mentorship. And so it just kind of depends on where the agent works that dictates how much money they’re gonna get after the commission’s paid.”
How is the commission divided between agents?
The commission that’s paid by the seller will typically be split among each agent and the brokerages through which they hang their real estate license. Let’s say you sell your home for $380,000 with a 5.5% commission rate. You pay a commission of $20,900, and each agent has a 70/30 split agreement with their brokerage. Here’s how that might look:
- Listing agent: $7,315 (70% of their $10,450 commission share)
- Listing broker: $3,135 (30% of their $10,450 commission share)
- Buyer’s agent: $7,315 (70% of their $10,450 commission share)
- Buyer’s broker: $3,135 (30% of their $10,450 commission share)
Are Maryland commission rates negotiable?
You can negotiate real estate agent commission rates, but don’t be surprised if your agent holds firm on how much they charge. A Consumer Federation of America report found that only 27 percent of agents are willing to negotiate the commission.
“There’s a little flexibility” with the commission rates, says Weiskerger. For example, “if you have a really savvy seller who knows their house is in a really desirable area and is gonna sell really fast, and maybe some of the extras — like staging or doing work to the property — are not necessary. Maybe they can negotiate from paying six percent to five percent.”
One reason agents often don’t lower their rate is that it may reduce their ability to negotiate a higher sale price for the seller. An agent’s services often include photography and pricing analysis, so a lower commission could also translate into a smaller marketing budget for your property, an inaccurate list price, fewer home promotions, and a lower likelihood of selling.
If you’ve found your own buyer
Exceptions can occur if you’ve already found a buyer. Let’s say you’re selling your Colonial-style home to a friend, or have decided to sell to a family member. In that case, the agent would likely be willing to play the role of transaction coordinator and independent go-between for a reduced commission rate.
In this situation, Weiskerger says, “Because if there’s no buyer’s agent involved, then, of course, you can reduce the commission to reflect that.” Since the listing agent would not be splitting the commission, they might be willing to accept a significantly reduced rate in this situation.
Overall, commissions in Maryland are negotiable but do your research first. When asking an agent to lower their pay, you’re limiting the pool of agents willing to work with you. And the downsides to working with a low-commission agent can be steep. Without a top Maryland agent in your corner, you could dramatically undersell your home, have a rough selling experience, or fail to sell the home at all.
What’s the lowest possible commission in Maryland?
If you’re looking to pay the absolute lowest amount possible to a real estate agent — short of listing your home For Sale By Owner — Weiskerger says that there are some flat-fee brokerages providing services in Maryland. Instead of taking commission out of the sales price, the seller pays the brokerage a fixed amount for only some of the services an agent typically provides.
However, for the lowest-cost options, Weiskerger advises, “You’re literally paying them to just put the house on our MLS Bright system. They’re not doing photos, they’re actually not even scheduling showings. They’re not even handling the lockbox. And I think that cost is around, I would say, a thousand to fifteen hundred dollars just to do that.”
As you’ll see below, a top agent typically provides many services which help homes fetch higher prices and more than cover the agents’ hard-earned commission.
What is included in a real estate agent’s commission?
A full-service real estate agent in Maryland will provide a high level of offerings that go toward giving you a great selling experience and boosting exposure to your home.
An agent’s services fall into a few main categories:
Guidance on pre-sale improvements
Agents see a lot of houses in their Maryland markets. They will have an eye for the small but impactful improvements you could make to help it sell for more. The best agents will go above and beyond to help their clients get the job done.
Sometimes agents will also know which companies and contractors in their area offer the best rates for the work a home needs before it goes on the market, says Weiskerger, thereby saving a seller money while also getting a home show-ready.
Pricing strategy
An agent will put together a comparative market analysis (CMA) in the form of a thick packet featuring charts, facts, figures, and photographs of houses. The analysis will show you what your home is worth based on comparable sales in the neighborhood, market trends, and local price per square foot. This key tool helps you set a realistic price that can attract offers right off the bat in a fraction of the time it would take a non-professional to determine.
“The strategy of pricing is important,” Weiskerger emphasizes. “I think a lot of people don’t fully understand the idea of value. And if you look at the comps (nearby comparable homes) and you can learn how to read them, it’s really clear to see where you should price a house and then price it, aggressively or at a smarter price point. This allows you the space and the ability to get multiple offers. And when you get multiple offers, it just allows you the ability then to just be really aggressive.”
He goes on to share a recent example of closing on a home: “(The sellers) were told by another agent it was worth $925,000. I told them we should price it at $999,000, and people thought I was crazy. And we ended up settling for $1,075,000. And so it’s just crazy how the proper advice and negotiating in the right way can make a seller hundreds of thousands of dollars more money.”
Marketing services
As part of their commission, at a minimum, Maryland agents should offer expert home prep and staging advice, professional photography, marketing flyers and pamphlets, direct mail, automatic postings of your listing on major home search sites, local advertisements, exclusive previews for other brokers, and open house coordination. Advanced agents may also offer the development of a virtual tour.
A top agent will have the experience and expertise to market your home strategically in light of current local market conditions. In the case of Weiskerger’s million-dollar success story above, for example, he chose to allow a very limited time for buyers to view the property, since he knew that would increase desire and demand — and because “in this market, you have to move pretty fast.”
Offer management and negotiations
When you receive one or multiple offers, an agent will help you determine the strength of the offer and work with you to proceed with responding to buyers. They’ll advise on whether to accept, reject, or make a counteroffer while putting together offer spreadsheets to identify the best offer in bidding war situations.
If a buyer requests repairs after the inspection, an agent will help you push back where appropriate and advise on when to concede. Should the appraised value be lower than the contract price, an agent can help you determine whether to ask the buyer to make up the difference or if you should lower your price.
Market knowledge and neighborhood expertise
Great Maryland real estate agents know what local buyers seek in homes and which of your home’s attributes to highlight. An agent will skillfully incorporate key features into your home’s listing description and immediately be able to recognize what makes your house or the surrounding area special.
What is a fair real estate commission in Maryland?
As noted above, the average commission rate in most Maryland markets is between 5%-6% to hire a full-service real estate agent. This rate should mean you have an agent who is dedicated to selling your home for the best possible price, who is available and communicative, and who is willing to shepherd the transaction from start to finish. If an agent isn’t willing to offer all or the majority of services listed above, you should interview more candidates.
What if my Maryland house doesn’t sell?
Real estate agents only get paid commissions if and when your home sells successfully. Most real estate contracts include an exclusive right to sell, which gives the real estate agent the sole rights to market the property, list the property on MLS, and receive the commission if the sale closes in a determined time frame. If your house remains on the market beyond the time period outlined in the listing agreement, you are not obligated to pay your agent.
However, keep in mind that your listing agreement may contain a protection clause, also known as a “brokerage protection clause,” “safety clause,” “extension clause,” or “tail provision.” The protection clause states that if a buyer who the listing agent introduced to the property purchases the property after the listing agreement expires, the seller still must pay the agent a commission.
How can you avoid paying Realtor fees?
There are two main ways to avoid paying Realtor® fees. You can either sell your Maryland home without an agent’s help, or sell it directly to a cash buyer without ever going on the market.
For Sale By Owner
Without a real estate agent, you’re responsible for preparing your home for sale, marketing, negotiating, and navigating legal and financial documents. When selling a house on your own, you’ll need to hire an attorney, at a minimum, to make sure the paperwork is right.
Typically, For Sale By Owner (FSBO) makes the most sense if you already have a buyer. As of 2022, 50% of FSBO sellers knew their buyers before the sale.
This indicates that while the FSBO route is rare, making up just 10% of sellers, it’s even more rare to forgo a real estate agent’s help when you don’t already have a buyer lined up and ready to go. In addition, according to a 2022 National Association of Realtors report, the median FSBO house sold for $225,000, compared to a median of $345,000 for agent-assisted sales. That’s a significant loss of proceeds in an effort to save 5.5% on commissions.
Sell to a cash buyer
Cash buyers — including iBuyers, investors, and house-buying companies — are individuals or entities that purchase your home outright, without the need for lender financing. These buyers typically make off-market purchases and can provide speed and convenience to sellers.
Just be aware that the price offered by most cash buyers may not match what you could receive on the open market with the help of a top agent.
If you’re interested in a cash sale, you can receive a no-obligation offer through HomeLight’s Simple Sale platform, with no hidden fees or agent commission. Simple Sale connects you to the largest network of cash buyers in the U.S.
Now you know how Maryland agent commissions work
Sellers pay real estate commissions in exchange for an agent’s expertise and services throughout the sale process. If you’re worried about the cost of the commission, consider that targeted upgrades, stellar marketing, and savvy negotiations can help you maximize your sale price. With a performance-proven Maryland agent to guide you, you also avoid the stress of navigating this complex process without professional oversight.
The key is finding a quality agent who provides the highest amount of value for their commission fee. In fact, our transaction data shows that the top 5% of agents in Maryland sell homes for as much as 10% more than the average agent.
HomeLight can connect you with top Maryland agents with experience tailored to your needs. Whenever you’re ready to get started, HomeLight would be happy to put your commission worries to rest by introducing you to several agents in your area who are well worth it.
Writer McCoy Worthington contributed to this story.
Header Image Source (todd kent / Unsplash)
