W
hen buying or selling a home in New Jersey, understanding real estate commissions is crucial to managing your budget and negotiating effectively. In 2024, changes across the U.S. introduced new rules on how real estate commissions are disclosed, promoting greater transparency and helping individuals make informed decisions about real estate fees.
The current state of the New Jersey housing market shows a median home sale price of $556,300, with a housing supply of 28,001 units (+4.7% YoY). Homes sold above list price account for 58.7% (-0.42 pts YoY).
Real estate commissions refer to fees paid to agents by homebuyers or sellers once a transaction is completed. Traditionally, the seller covered both their agent's commission and the buyer's agent's fees. However, starting August 17, 2024, buyers must sign an agreement detailing their agent's fee before beginning home tours.
Average real estate commission rates in New Jersey vary depending on factors like location and market conditions. While there are general expectations for these fees, they can be negotiated based on the services provided by the agent and the specifics of the property.
In New Jersey's largest cities, sample commission amounts for different percentage rates based on median home prices are:
* Newark: $532,500 (1.5% = $7,988, 3% = $15,975, 5% = $26,625)
* Jersey City: $699,000 (1.5% = $10,485, 3% = $20,970, 5% = $34,950)
* Paterson: $540,000 (1.5% = $8,100, 3% = $16,200, 5% = $27,000)
Real estate commissions are negotiable in New Jersey, with no federal or state laws dictating commission rates. Agents may be open to adjusting their rates based on the property and services required.
To negotiate successfully:
* Interview multiple agents to compare commission rates and service offerings.
* Consider performance-based incentives, such as offering a higher commission for faster sales or better sale prices.
* Leverage your property's appeal if it's in a desirable area, which could motivate agents to lower their fees.
Key updates to real estate commission rules include:
* Buyers must sign an agreement detailing their agent's fee before touring homes.
* Buyer agent compensation is no longer displayed on MLS listings in many markets.
