U
nderstanding Real Estate Commissions in Texas
Real estate commissions are fees paid by either the buyer or the seller to an agent for facilitating a transaction. These fees are usually calculated as a percentage of the property's sale price and are paid at closing.
Who pays the commission?
In Texas, traditionally sellers have covered both their own agent's commission and the buyer's agent's fees from the sale proceeds. However, as of August 17, 2024, buyers must now agree to their agent's fee in writing before starting home tours. While buyers can still request that sellers cover their agent's commission during negotiations, this change means the amount a seller might pay for a buyer's agent can vary depending on the buyer, and is entirely negotiable.
Average Real Estate Commission Rates in Texas
Real estate commission rates in Texas can vary significantly depending on the transaction details and the agreements made between the parties. Although there are standard expectations for commission percentages, these fees are fully negotiable, enabling buyers and sellers to work with their agents to find an arrangement that best meets their needs. Several factors, including the property's location, current market conditions, and the scope of the agent's services, can impact the final commission. This flexibility allows both sides to negotiate and adjust the fees according to their budget and objectives. Below is a detailed breakdown of example commission rates based on median home prices in some of Texas's largest cities:
City
Median Home Sale Price
1.5% Real Estate Commission
3% Real Estate Commission
5% Real Estate Commission
Houston
$354,495
$5,117
$10,289
$17,725
San Antonio
$268,950
$4,033
$8,069
$13,448
Dallas
$445,000
$6,675
$13,350
$22,250
At Redfin, we strive to offer consumers the best possible value. For sellers, we provide a listing fee starting as low as 1%. For buyers, our fees vary by location but are designed to remain competitive, helping your offer stand out and increasing your chances of success in the homebuying process.
Can you negotiate real estate commissions in Texas?
Yes! In the U.S., there are no regulations or laws dictating commission rates, so agents may be open to negotiating lower fees depending on the transaction type, the services required, and their relationship with the client.
Tips for a successful negotiation
1. Compare various agents and their commission models before making a decision.
2. Consider performance-based incentives, such as offering a higher commission for a quicker sale or better final price.
3. Leverage your property if it is in a sought-after area, as agents may be willing to accept lower commission.
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Texas Real Estate Commission FAQs
What are the changes to real estate commission? Two significant updates have altered the handling of real estate commissions. First, buyers must now provide written agreement on their agent's fees before starting home tours. Second, the way fees are advertised has also changed. In most markets, buyer's agent compensation can no longer be displayed in MLS listings. For more information on these changes, click here.
How do the changes impact buyers in Texas? Buyers are now required to formally agree on their agent's commission rate before beginning home tours. However, you can still ask the seller to cover your agent's fee as part of your offer.
How do the changes impact sellers in Texas? Sellers will continue to negotiate with their listing agent about the compensation to offer the buyer's agent, if any. The seller will review any requests and negotiate the terms of the offer accordingly.
How do you find a real estate agent in Texas? If you're ready to buy or sell a home, Redfin is here to assist you. Reach out to a Redfin agent today to get started.
How can you avoid fees? Selling a home without an agent in Texas can help you save on commission fees. However, for sale by owner (FSBO) transactions require the seller to manage marketing, showings, and paperwork independently.
*Listing fee subject to change, minimums apply. Any buyer's agent fee the seller chooses to cover not included. Listing fee increased by 1% of sale price if buyer is unrepresented. Sell for a 1% listing fee only if you also buy with Redfin within 365 days of closing on your Redfin listing. We will charge a 1.5% listing fee, then send you a check for the 0.5% difference after you buy your next home with us. Learn more here.
