What’s the Average Texas Real Estate Commission Rate?
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Meaghan Hunt Contributing AuthorCloseMeaghan Hunt Contributing Author
Meaghan Hunt is a writer and editor based in Oklahoma City. She has over a decade of experience writing and editing for the web, magazines, and print publications, and has spent the last several years focused on personal finance topics including real estate. She is a contributing writer for HerMoney Media. Hunt holds an MLIS degree and believes in empowering homebuyers and sellers by connecting them with accessible, digestible, and authoritative information.
Richard Haddad Managing EditorCloseRichard Haddad Managing Editor
Richard 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.
Most real estate agents in Texas 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 Texas?
In this post, we’ll help you determine how much commission you might pay on your Texas home sale, and what options are available to earn the highest proceeds possible.
What’s the average real estate commission in Texas?
According to Ryan Adams, a Houston real estate expert and HomeLight Elite Agent, you can expect to pay a standard of 6% in agent commissions when selling a home in Texas, with some variation based on location within the state. On a property worth the current statewide median home sale price of $326,800, that amounts to $19,608 in commission costs.
However, he explains that the vast majority of single-family residential sales will fall around the 6% mark, with a 3% buyer’s commission and a 3% seller’s commission. We’ll explain the details of this commission split later in our post.
Using an overall statewide average of 6%, here’s a breakdown of how much you might pay in real estate commissions based on what a home sells for in six of the largest cities in Texas:
|Texas city||Median home price||Typical commission at 6%|
Median home price source: Texas Realtors®, TexasRealEstate.com
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 Texas? Here are the answers to common questions about real estate agent commissions:
Who pays real estate commission fees?
The commission is typically paid by the home seller, and the seller’s agent will then split the commission with the buyer’s agent.
As top real estate agent Ryan Adams of Houston’s Adams Group explains, a 50/50 split of the 6% commission on a home is most common in Texas.
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 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 3% goes to the listing agent, and the other 3% goes to the buyer’s agent.
Both the listing agent and the buyer’s agent will typically 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.
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 $344,000 with a 6% commission rate. You pay a commission of $20,640, and each agent has a 70/30 split agreement with their brokerage. Here’s how that might look:
- Listing agent: $7,224 (70% of their $10,320 commission share)
- Listing broker: $3,096 (30% of their $10,320 commission share)
- Buyer’s agent: $7,224 (70% of their $10,320 commission share)
- Buyer’s broker: $3,096 (30% of their $10,320 commission share)
Are Texas 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.
If demand is particularly high on a property, says Adams, and not much is needed from a marketing perspective, some agents might agree “to a two and a half percent buyer’s commission, and the sale side would probably be similar.” But generally, 6% is a standard commission rate in markets across Texas. “If you want the best experience — the best results — you go to the best. And they don’t lower their commission rates because they know what they’re worth.”
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 Spanish revival 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.
Overall, commissions in Texas 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 Texas agent in your corner, you could dramatically undersell your home, have a rough selling experience, or fail to sell the home at all.
What is included in a real estate agent’s commission?
A full-service real estate agent in Texas 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 Texas 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.
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.
As part of their commission, at a minimum, Texas agents should offer expert home prep and staging, 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.
“What sells a home is pricing, location, condition, and marketing exposure,” says Adams. “Top agents put a lot of time and energy into making sure all of those things are done correctly.” He adds that he can tell just by a home’s listing photos whether the home is being marketed to its full potential.
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 Texas 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.
This local expertise impacts buyers as well. Adams says that when reviewing offers from multiple buyers’ agents, “nine times out of ten,” he accepts an offer written up by an agent who works locally. “They understand how to write up the offer to be to get it accepted,” he explains. Agents unfamiliar with the local market can ultimately cost their buyers, he adds.
What is a fair real estate commission in Texas?
As noted above, the average commission rate in most Texas markets is around 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 Texas 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 Texas 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 buyer.
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 6% 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 Texas 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 Texas 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 Texas sell homes for as much as 10% more than the average agent.
HomeLight can connect you with top Texas 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: (Erin Hervey / Unsplash)