Real estate commissions in Texas: What to expect
For many years, selling a home with the assistance of a real estate agent, in Texas or anywhere, required that the homeowner pay the commission of both their own agent and the buyer’s agent. The cost of both commissions typically amounted to about 5 to 6 percent of the home’s sale price, split more or less evenly between both agents.
This system however, was recently impacted by a lawsuit settlement that means sellers no longer necessarily have to cover the buyer’s agent’s commission. But even if that’s the case, your own agent still must get paid for their work. Let’s take a closer look at Realtor fees in Texas, how much they will cost you — and what you’re getting for your money.
How much are real estate commissions in Texas?
In the Lone Star State, total real estate commissions in September 2024 averaged 5.76 percent of the home’s sale price, according to data from Clever Real Estate. The split between agents was almost exactly even, with 2.87 percent typically going to the listing agent (representing the seller) and 2.89 percent to the buyer’s agent.
Now, let’s apply those percentages to the median price of an existing single-family in Texas, which was $348,600 as of August 2024, according to Redfin. For a home sale of this amount, a full 5.76 percent commission would be $20,079 split more or less evenly between both agents. The exact amount you pay, however, can vary widely, as home prices across the state can be quite different. Here’s a look at the total cost of Realtor commissions in a few of the major cities in Texas, assuming the percentages above.
| City | Median home sale price | Total agent commission (5.76%) | Listing agent commission only (2.87%) | Buyer’s agent commission only (2.89%) |
|---|---|---|---|---|
| Dallas | $390,000 | $22,464 | $11,193 | $11,271 |
| Houston | $331,900 | $19,117 | $9,526 | $9,592 |
| Austin | $547,500 | $31,536 | $15,713 | $15,823 |
| SOURCES: Clever; Redfin pricing data as of September 2024 | ||||
What’s included in a real estate agent’s commission?
An agent’s services vary based on whether you’re on the buying or selling side of the deal. If you’re shopping for a new home, a knowledgeable local real estate agent can help you find properties for sale that fit within your budget and meet your lifestyle needs. A Realtor will also help you negotiate the purchase price for a home as well as any repairs or seller concessions you may be requesting.
On the selling side of the equation, an agent will usually start by researching comparable homes sold in your area to help you arrive at an accurate list price. A listing agent will also market your home — a phase of the selling process that includes multiple steps, ranging from writing the property listing to advertising the property on social media and other platforms. Other important tasks handled by your agent include hosting open houses and private showings, helping you negotiate a deal and ushering the sale through the closing process.
Who pays agent commissions in Texas?
Historically, commission fees for both agents involved in a real estate transaction, representing both buyer and seller, were paid by the home seller out of their proceeds from the sale. (This was the case no matter which state the transaction was taking place in.) Today though, new rules apply that mean sellers are not necessarily obligated to pay their buyer’s agent’s fee. Many sellers still choose to do so, however, in the interest of making their listing more appealing to buyers. As you negotiate your real estate deal, make sure your contract clearly spells out who will be paying for which commission, and how much.
Are Texas real estate agents worth it?
The amount you pay your Realtor for their professional guidance in a real estate transaction can be a hefty sum. So it’s only natural to wonder whether the expense is really worth it. It’s important to keep in mind that you’re not required to have an agent when buying or selling a home in Texas.
As a home seller, one alternative is to go it alone with a for sale by owner approach. Taking this path means you will be the one on the hook for doing all of the work, though, and selling a home is no small task. You will be responsible for everything from developing the listing to hosting showings and negotiating a final deal, not to mention handling the considerable paperwork involved in closing. If you’re not comfortable with financial negotiations, this may be a less-than-ideal scenario.
If you’re shopping for a new home, an experienced real estate agent can help you find homes you might not find on your own, as well as negotiate a better sale price or obtain seller concessions that make the purchase more affordable. They will also provide guidance throughout the closing process.
Forgoing an agent might save you a significant chunk of money, but there’s no guarantee that everything will go smoothly either way. Having the expertise of a licensed pro for such a significant financial transaction can certainly be helpful, and more often than not, an experienced agent will help you navigate the complexities of the transaction more successfully.
Saving on fees
- Negotiate commission: Before signing a contract with an agent, be sure to discuss the amount of commission they charge. The percentage is often negotiable, which can save you serious money (especially on higher-priced homes).
- Work with discount agents: Another way to scale back the amount of commission you pay is to work with a low-commission broker or real estate agent. Agents working with companies like Redfin and Clever, for example, typically charge closer to 1 or 1.5 percent of your home’s sale price, instead of the traditional 2.5 or 3 percent.
- Sell by owner: The “for sale by owner” process is not for everyone, but if you don’t mind the work involved, you’ll save yourself the fee normally paid to a listing agent. (You might still be required to pay your buyer’s agent commission, though.)
- Sell to a cash home buyer: Working with a cash homebuyer is another route to cut commissions and other costs of selling a home. There are many companies in Texas that buy homes for cash and can close on the deal quickly, often in as little as a few weeks. But in exchange for the speedy process, be prepared to pocket less money — these companies typically pay less than you’d make on the open market.
Find a Texas real estate agent
When you’re ready to sell your home in Texas, working with a local real estate agent can be a big help — just be sure to discuss their commission fee ahead of time so you know what you can expect to pay, and what services will be provided in exchange. If you don’t know where to start, ask family or friends who’ve had a good experience with an agent for recommendations. Ask the candidates you talk to plenty of questions, and look for someone who knows your specific area of Texas very well, which can help you get the most value for your money.
