How do Mass. real estate commissions stack up to other states’?

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How do Mass. real estate commissions stack up to other states’?

Spring house hunting

According to a new report from Clever Real Estate, home sellers here pay an average of 5.45% of their home’s value in commission, which is split between the agent and the buyer’s agent.

A for sale sign sits in front of a home on the market in Denver on Wednesday, April 3, 2024. (AP Photo/David Zalubowski) David Zalubowski/AP

A lawsuit settlement may change the way real estate agents charge commissions, but how much are sellers actually spending?

According to a new report from Clever Real Estate, home sellers in Massachusetts typically receive 5.45% of their home’s value in commission, which is split between the agent and the buyer’s agent. That means sellers will pay agents about $29,880 when selling a $548,250 home, which was the average sales price for a single-family home in the commonwealth in February, according to the Warren Group.

“The exact percentage you pay a broker depends on several factors, such as the normal rate in your area and the broker you work with,” the Clever report says.

The report calculated the commission rates after surveying more than 600 real estate agents across the country who reported the typical commission rate in their markets. Industry experts, Clever said, checked the report’s findings for accuracy.

According to Clever, the average commission in Massachusetts is just 0.04 percentage points lower than the national average of 5.49 percent. Home sellers in 18 states pay a lower commission for their homes than those in the Bay State.

Clever says sellers in the Northeast generally pay the lowest commission rates in the United States. Sellers in Delaware, Maine and New Jersey paid rates of 4.88%, 5.17% and 5.21%, respectively.

“Remember, these rates are just averages,” the report said. “Commission rates are not officially standardized and you can always negotiate brokerage fees with your agent or sell with a company that offers pre-negotiated low commission rates.”

A real estate agent in the United States typically charges an estimated interest rate of 2.83% for a home, while a real estate agent charges 2.66%, the report said.

The commissions often cover marketing costs and visibility, Clever said, because an agent — a real estate agent who is a member of the National Association of Realtors — lists a seller’s home in the Multiple Listing Service database and shares the commission with the buyer’s agents Offers incentive to do so show their customers a home.

But the process by which agents collect commissions could soon change after a class-action lawsuit that requires NAR to pay $418 million over four years and changes the way the real estate trading group deals with more than 1.5 million members deals with commissions, Boston.com reported.

Homeowners typically sign a contract when listing a property in which they agree to pay a real estate agent a certain percentage of the sales price, which is negotiable, Boston.com reported, “but this information was not always shared with the real estate agent.” .” Salesperson.”

Home sellers have successfully argued in the lawsuits that they should not pay the buyer’s agent commission because that person does not represent their interests. Now home sellers no longer have to pay agent commissions, and agents must tell their clients that commission rates are negotiable, Boston.com reported.

Clever said home sellers could work with discount brokers, negotiate commission rates or even sell their home without the help of an agent, although the marketplace does not suggest this and warns that it could risk a lower sales price, pricing errors and legal and financial errors .

“While the benefits of using real estate agents are obvious, there is still an ongoing debate about the level of agent fees,” the report said. “In the U.S., real estate commissions are among the highest in the world, leading to increased scrutiny and discussion about their fairness and necessity.”

The Wall Street Journal reported back in November that the United States has the third-highest typical real estate commission on a sale, just behind Japan (6.2%) and Argentina (6%). Commissions in the UK are typically 1.3%, making it the lowest on the list.

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