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Real estate agent commissions increase slightly in Texas

Umito November 5, 2024

Industry rules regarding real estate commissions do not appear to affect Texas’ bottom line.

Texas real estate agent commissions increased slightly after the National Association of Realtors’ regulations took effect this summer, unlike the rest of the country.

A September survey found that Texas real estate agent commissions increased an average of 5.76% this year, up from 5.73% last year, according to real estate data firm Clever, which based its findings on a survey of real estate agents. This translates to a 0.02 percent gain for buyer agents and a 0.01 percent increase for listing agents.

The story is different, if we take a broader view: The average commission rate fell nationally, from 5.57 percent earlier this year to 5.32 percent. Texas’ boost presents the latest byproduct of the state’s ongoing housing boom, which has not been phased by NAR rule changes.

The slight increase in commission rates for agents across Texas represents a difference of about $120 more for a closed deal on a $397,000 home, the median price in the third quarter of this year in the Dallas area , For example. Lowering the national rate on the same house would result in a loss of approximately $1,000.

Marketability and commission rates in each region, however, will vary depending on housing prices: In September, median housing prices in Texas were down less than 0.5 percent year-over-year, while prices increased by 2 percent nationally, according to NAR. and Redfin.

In the survey, “almost every” of the 734 agents said they don’t see drastic commission changes – at least not yet – as a result of the NAR rulebook guideline changes, said the content editor of Clever, Jonathan Stubbs. The new guidelines placed additional responsibilities on agents, such as buyer representation agreements in September.

Buyer agents, in particular, needed to up their negotiation game and stand out when proving their value to clients, agents told Clever. But there is also work to be done on the other side of the table.

“Agents may have to work a little harder to convince sellers to continue offering concessions equal to the buyer’s agent’s commission, as some sellers may think they can sell for less now” , Stubbs said.

The Texas industry had already adopted buyer representation agreements as standard practice prior to the NAR settlement, and agents’ low expectations for disruption in the post-settlement landscape appear to be coming to fruition.

Rapid job growth and strong residential demand are the fundamentals driving transactions in Texas cities this year. San Antonio leads the nation in residential construction, while the Urban Land Institute just ranked Dallas-Fort Worth as the top real estate market to watch next year.

Most agents participating in the survey may have reported their commission rates on transactions before the new NAR guidelines took effect because many transactions closed in September were initiated in July. Statewide home sales rebounded from June with a 15% month-over-month increase in July, according to the Texas A&M Real Estate Research Center, so agents responding to Clever’s investigation could have more easily negotiated higher commissions during the busiest season.

The question of whether Texas agents truly stand out — or whether they simply got better rates in hotter markets — can’t yet be definitively answered.