The Truth About Real Estate Commission

Last summer I wrote an article addressing the issue as to whether paying a higher rate of commission will help a seller sell his or her home faster.  My research for that article, in which I looked at a years worth of home sales in the St Louis area, showed that a higher than normal commission rate in fact did not lead to faster home sales.  Now that we are seeing the market heat up I decided to take another look at this topic and this time focus on whether paying a higher real estate commission results in getting a higher price for the seller.

To make sure my analysis would reflect the current market, I looked at data from homes sold in the St Louis area during the last 4 months and then selected the 20 zip codes where homes sold for the highest percentage of the original list price.  As the chart below shows, the 63385 zip code area of St Charles County (Wentzville area) had the highest percentage at 97.5% and the 63146 zip code area of St Louis County with homes selling for just shy of 95.5% of the list price was at the bottom of the list of top 20 zips.  There were a total of 2,162 homes sold in these 20 zip code areas during the 4 month period I examined.

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