Industry rules around real estate commissions don’t appear to be affecting Texas’ bottom line.
Texas real estate agents’ commissions increased slightly after the National Association of Realtors regulations took effect this summer, in contrast with the rest of the country.
A September survey found Texas real estate agents’ commissions increased to an average 5.76 percent this year, up from last year’s 5.73 percent, according to real estate data company Clever, which based its findings on a survey of real estate agents. That breaks down to a 0.02 percent gain for buyers’ agents, and a 0.01 percent bump for listing agents.
The story is different, taking a broader view: The average commission rate dropped nationally, from 5.57 percent earlier this year to 5.32 percent. Texas’ nudge presents the latest byproduct of the state’s continued real estate boom, which has been unphased by NAR’s rule changes.
The slight nudge in commission rates for agents across Texas adds up to a difference of about $120 more for a deal made on a $397,000 home, the median price in the third quarter this year in the Dallas area, for example. The national rate’s decline on the same home would add up to a loss of roughly $1,000.
The negotiability and rate of commissions in each region will vary, however, along with home prices: as of September, Texas median home prices were down less than half a percent year-over-year, while prices rose 2 percent nationally, according to NAR and Redfin.
In the survey, “nearly every one” of the 734 agents reported they don’t see drastic commission changes — at least not yet — as a result of the NAR settlement’s guideline alterations, Clever’s content writer Jonathan Stubbs says. The new guidelines slapped agents with added responsibilities like buyer representation agreements in September.
Buyers’ agents, especially, needed to up their negotiation game and come out swinging when proving their worth to clients, agents told Clever. But there is also work to do on the other side of the table.
“Agents may need to work a bit harder to convince sellers to continue to offer concessions equal to the buyer’s agent commission, as some sellers may think they can sell more cheaply now,” Stubbs said.
The Texas industry had already adopted buyer-representation agreements as a standard practice before the NAR settlement, and agents’ low expectations of disruption in the post-settlement landscape look to be panning out.
Rapid job growth and high residential demand are the fundamentals driving transactions in Texas cities this year. San Antonio leads the nation in homebuilding, while the Urban Land Institute just ranked Dallas-Fort Worth as the top real estate market to watch heading into next year.
Most agents in the survey may have reported their commission rates on deals before the NAR settlement’s new guidelines took effect, as many deals that closed in September were initiated in July. Home sales across the state bounced back from June with a 15 percent month-over-month increase in July, according to Texas A&M’s Real Estate Research Center, so agents answering Clever’s survey could have more easily negotiated higher commissions in the busier season.
Whether agents in Texas are really standing out — or if they’ve simply clutched cozier rates in hotter markets — cannot be answered definitively just yet.
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