Real Estate Agent Commission: What Will Agents Make in 2023?

The real estate market is constantly evolving, and as a homeowner, it’s crucial to stay up-to-date with the latest trends that could affect your home sale. One factor that remains a top concern for home sellers is the commission paid to their real estate agents. Understanding how much commission agents make is essential to ensure you get a fair deal and not leave money on the table.

Moreover, the emergence of cash home buyer companies like Oak Street Properties has disrupted the real estate industry, creating a new option for sellers looking for a quick and hassle-free sale without paying real estate commission fees.

But what impact does this have on traditional real estate agent commissions? In this article, we’ll delve into the world of real estate agent commissions, exploring what you can expect agents to make in 2023.

Real Estate Agent Commission

The Basics of Real Estate Agent Commission

Real estate agents work on commission-based income, which means they only earn money when a property is sold or leased. The commission is a percentage of the final sale or lease price and is typically paid by the seller.

In the United States, the average commission percentage for a selling agent is 5-6%, but this can vary based on location and the specific real estate company. The commission is then split between the seller’s agent and the buyer’s agent, with each typically receiving 2.5-3% of the sale price.

Understanding how real estate agent commissions work is an essential part of buying or selling a property.

Traditional Commission Model

The traditional commission model, also known as the standard commission model, is a widely used method in the industry for incentivizing sales agents to sell products or services. Under this model, agents earn a percentage of the total sale they make, which can range from 1% to 10% or more, depending on the industry, product, or service being sold.

The commission is usually paid out after the sale is completed, and it’s based on the final price the customer pays. This commission model is prevalent in industries such as retail, real estate, insurance, and any other where agents or brokers act as intermediaries between businesses and customers. Its popularity is due to its simplicity, incentivizing agents to sell more and earn more while reducing the risk and upfront costs for the business.

Alternative Commission Models

Apart from the traditional commission model, there are other commission models that home sellers can consider. One alternative model is the flat fee commission model, where the real estate agent agrees to a set fee for their services, regardless of the property’s sale price.

The key benefit of this model is that it can be more cost-effective for home sellers with a high-value property. However, the downside is that there may be limited incentive for the agent to work hard to sell the home, since the commission remains the same regardless of the sale price.

Another option is the reduced commission model, where the real estate agent agrees to reduce their commission percentage as an incentive to the home seller. This model can be beneficial for sellers who need help to sell their property in a slow market. However, it may lead to limited marketing efforts by the agent, since they will earn less from the sale.

Ultimately, home sellers should consider their individual needs and circumstances when choosing a commission model, and carefully weigh the benefits and drawbacks of each option.

Alternative Commission Models

Factors Influencing Real Estate Agent Commission Rates

Real estate agents are an important part of the process of buying or selling a property, and they typically charge a commission fee for their services. Commission rates can vary widely based on several factors, such as location, market conditions, property type, and the level of service provided.

In this next section, we will discuss the different factors that can influence real estate agent commission rates, in order to help you better understand how they are determined and what you can expect when working with an agent.

Market Conditions

The commission rate for real estate agents is often dependent on market conditions both on a local and national level. During a strong seller’s market, where there is high demand and low inventory, agents may be able to command higher commission rates due to the high demand for their services.

Conversely, during a buyer’s market, where there is low demand and high inventory, agents may need to adjust their commission rates to stay competitive and attract clients. Additionally, cash home buyer companies may also be affected by market conditions. For example, during times of economic uncertainty, cash home buyer companies may see an increase in business as more people look to sell their homes quickly for cash.

This increased demand may allow cash home buyer companies to offer higher commission rates to agents.

Ultimately, market conditions play a significant role in determining commission rates for real estate agents and may require agents and cash home buyer companies to adjust their rates accordingly.

Experience and Expertise

Real estate agents with more experience, skills, and certifications are likely to charge a higher commission rate than those who are less qualified. The additional certifications and skills, such as advanced training in negotiations, marketing, and communication, can be valuable in helping clients close deals more efficiently and effectively.

Experienced agents better understand the local market and can provide expert advice on pricing, market trends, and property values to help clients make informed decisions. They may also have a larger network of contacts and resources to help connect buyers and sellers more easily.

Overall, the experience and expertise an agent holds can significantly impact their commission rates, as clients are willing to pay more for top-tier services and results.


Negotiation plays a crucial role in determining the commission rate for individual real estate transactions. While most real estate agents have a standard commission rate, the final amount is often reached through negotiation between the agent and the client.

This negotiation can be influenced by factors such as the property’s value, the transaction’s complexity, the level of competition in the local market, and the agent’s level of experience and success.

Additionally, if an agent has a proven track record of successful transactions and a strong reputation, they may be able to negotiate a higher commission rate. On the other hand, some clients may be able to negotiate a lower commission rate if they are referred to an agent through a personal connection or have a pre-existing relationship with them.

Real Estate Agent Commission Trends in Recent Years

Real estate agent commission has been critical in the housing market for decades. Over the years, real estate commissions have fluctuated, responding to changes in economic conditions and real estate trends.

Real Estate Agent Commission Trends

In recent years, there have been significant shifts in commission trends, with different factors influencing the commissions real estate agents earn. This article will examine the trends in real estate agent commissions in recent years.

Impact of COVID-19 Pandemic

The COVID-19 pandemic has significantly impacted the real estate market and agent commissions. With social distancing measures in place, many real estate transactions have moved online. As a result, some real estate agents adjusted their commission structures to reflect the fact that they were providing fewer in-person services.

In some cases, agents even lowered their commission rates to help clients who were struggling financially because of the pandemic. Additionally, with record-low interest rates and a surge in demand for larger homes with more outdoor space, competition among agents has increased, leading some to offer lower commission rates in order to win business.

Adoption of New Technologies

Technology has brought in significant changes in the real estate industry. The adoption of new technologies has enhanced how real estate transactions are conducted. The use of smartphones, social media, and other digital platforms has made it easier for real estate agents to reach a wider audience, market properties, and close deals without needing paperwork.

As a result, the traditional commission structures in the real estate industry have been challenged. With the advent of new technologies, clients have started to question why they should pay a high commission fee when they can sell or buy property through digital platforms at a much lower cost.

This has led to the growth of cash home buyer companies that offer instant cash service for homes with no commission fees.

As the trend of cash home purchases continues to grow, traditional real estate agents are forced to reinvent themselves and adopt innovative technologies to stay competitive in the market.

Real Estate Agent Commission Projections for 2023

Real estate agent commission in 2023 will be shaped by various factors. The real estate industry is evolving with technological advancements and changing consumer preferences. The commission structure has become more dynamic and competitive, paving the way for new market entrants such as cash home buyer companies.

Real Estate Agent Commission Projections

Market Recovery and Growth

The real estate market is projected to recover and experience growth in the coming years, which is expected to impact commissions in 2023. As the market stabilizes and housing inventory increases, real estate agents are likely to see a rise in demand for their services. With more homes available for sale, buyers will have greater options to choose from, and sellers will need expert guidance to stand out from the competition.

As a result, real estate agents are likely to see an increase in the number of transactions they oversee, ultimately leading to higher commissions. Additionally, as the economy recovers and consumer confidence improves, more individuals are likely to enter the housing market, further driving demand for real estate agents.

Continued Technological Advancements

As technology continues to advance, it is clear that the role of real estate agents will continue to evolve. With the proliferation of online real estate marketplaces and tools such as virtual property tours, agents are increasingly expected to be well-versed in digital marketing and communication.

This shift towards technology has also led to increased transparency, with clients now able to access a wealth of information online regarding property prices and market trends.

While this may lead to some downward pressure on agent commissions in the short term, we believe that agents who are able to adapt to these new realities and leverage technology to enhance the client experience will continue to thrive in the long run.

Competition and Consumer Expectations

Due to the rising competition in the real estate industry and evolving consumer expectations, agent commissions in 2023 may likely undergo some significant changes. With advancements in technology, homebuyers and sellers now have access to a wealth of information, allowing them to conduct their research before engaging an agent.

As a result, agents working with a traditional commission-based model may face stiff competition from tech-savvy, flat-rate brokers. Additionally, with customers getting more and more demanding, agents who fail to meet their expectations may find it difficult to secure commissions.

Therefore, in order to survive in the future real estate market, agents may need to adopt new approaches such as value-based pricing, whereby commissions are calculated based on the actual value an agent brings to the table.

Making Informed Decisions: Tips for Home Sellers

In conclusion, selling a home can be a complex and overwhelming process. However, with the right information and tools, home sellers can make informed decisions to ensure a successful sale.

Making Informed Decisions

By understanding and evaluating real estate agent commissions, sellers can avoid overpaying for services and potentially lose out on cash that could be put towards their next dream home. Another viable option is to work with a cash home buyer company like Oak Street Properties, which offers a hassle-free experience and can save sellers thousands of dollars in commission and closing costs.

In fact, sellers can expect to receive up to 100% of the fair market value of their home when selling to a cash buyer. So, if you’re a home seller looking for a faster, more profitable way to sell your property, don’t hesitate to reach out to Oak Street Properties today!

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