Does Commission Rate Paid To A Buyers Agent Affect Sale Price Or Time To Sell?

By Dennis Norman, on May 1st, 2017

If you want to start a debate amount the real estate community that will go on forever and most likely not have the participants reach a consensus, just bring up the topic of my headline: Does the commission rate offered to a buyers agent affect how much a listing will sell for or how quickly it will sell? Without getting into any philosophical or ideaoligcal debate on the topic, I wanted to just look at the data to reveal what it shows on the topic.

With this in mind, I pulled MLS data from our database for homes sold in the past 12 months in the counties of St Louis and St Charles, in the price range of $200,000. I then pulled the data into 3 groups based upon the percentage of commission offered to buyers agents.This data was pulled into the three tables below which reveal, among other things, the median time for homes to sell and the percentage of the original list price they sold for.

What does the data show? The tables below go into more detail, but here’s a quick recap:

77% paid commission of 2.7%-2.99% to the buyers agent.
- These homes sold for a median of 97.01% of the original list price and sold in a median time of 25 days
17% paid commission of 2.5%-2.69% to the buyers agent.
- These homes sold for a median of 96.23% of the original list price and sold in a median time of 39 days
5.5% paid commission of 3% or more to the buyers agent.
- These homes sold for a median of 94.92% of the original list price and sold in a median time of 38 days

So what is the answer? Interestingly enough, there isn’t a clear cut answer from the data below as to whether paying less than the most common commission rate to a buyers agent of 2.7% negatively impacts the seller as the stats are very close. However, what is fairly clear is that paying a higher commission rate of 3% or more to the buyers agent certainly doesn’t result in the home selling for a higher percentage of the list price, in fact the data reveals they sold for less, nor do they sell faster as they sold over 50% slower than the listings with a 2.7% commission rate.

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