Real Estate Commissions Fall In 2020. Covid is why.
Each year the EffectiveAgents® team looks at a large sample of US home transactions to determine the average real estate commission that a home seller might expect to pay. 2020 was an unusual year (for so many reasons) and the fees that real estate agents charge were impacted. Overall, the year yielded some interesting changes to fee landscape. With homes selling quicker and agents utilizing more tech than ever, average realtor commissions were markedly lower.
2020 Average Realtor® Commission Rate
Our analysis occurred on 12/21/2020 and was comprised of a large sample of US existing home closings. The average realtor® commission rate for 2020 is 5.656%.
Average real estate commission rates have fluctuated over the years but have remained between 5% and 6% for nearly a century. The income that an agent earns is highly influenced by economic cycles and is subject to expansion when housing inventory moves quickly and compression when homes aren’t as liquid. 2020 saw record demand thanks to Covid-19 and a cultural re-prioritization of home-ownership. The speed at which homes sold in 2020 was staggering. On average, it took a homeowner just 24 days to get their home under contract. This unprecedented home sale velocity encouraged motivated real estate agents to lower their commissions and fees compared to 2019. The average real estate commission in 2019 was 5.702% and, while inventory was constrained, it was nothing like the supply-demand scenario that played out in 2020.
If you are considering selling your home and are evaluating average real estate commission rates charged by realtors®, let this be a starting point for your conversation. As long as demand for housing remains as strong as it is, we believe that the fees that realtors® charge will remain under some pressure. If you would like to find a motivated, top performing realtor® in your area…that’s what we do best.
Recent surveys indicate that more, 77% of home sellers only interviewed one agent. EffectiveAgents.com suggests interviewing at least 3 agents, we can introduce you to a few great candidates as well. Interviewing multiple agents helps home sellers get the most out of their relationship and is a simple way to save a little money. While it may not seem appealing to meet in person, a lot can be accomplished with facetime and zoom.
