US resi brokers make some of the world’s highest commissions: report

Stateside agents typically receive 5% to 6% for brokering deals

TRD New York /
Oct.October 07, 2016 10:50 AM

Average residential broker commission rates per country in 2015. Data source: Surefield

The U.S. is one of the most expensive countries to buy a house, partly because its real estate brokers receive some of the highest commissions around the globe, according to a new survey.

The U.S. ranks third out of 32 countries for average residential commission rates, with an average of 5.3 percent, a modest drop from 6.1 percent in 2002, according to the survey by the discount-brokerage firm Surefield.

In Mexico, which tops the list, brokers take home as much as 7.5 percent of a home sale, the Wall Street Journal reported. In Sweden, the U.K., Ireland and Singapore, brokers take home between 1.5 to 2 percent of the sale, while Italy and Spain come pretty close to the U.S., with averages of about 5 percent.

Most nations surveyed don’t have the concept of buyers’ agents, as is commonplace in the U.S. The commission is often split at least two ways, between the buyer’s and the seller’s representatives. In both Japan and Hong Kong, the two governments that introduced the two-agent system since 2002, average commission rates rose, the Journal reported, citing the survey.

Overall, commission rates have gone down since 2002, with the most dramatic decreases in Belarus and China, where rates dropped from 7.5 to 2 percent.

That’s because the Internet has made it easier for buyers and sellers to connect and consumers are getting savvier, Chad Syverson, a University of Chicago economist who consulted for Surefield told the Journal. “It’s gotten easier for people to find the other end of the market directly.”  [WSJ]Chava Gourarie

Related Article

Check out the video above to see reporter Erin Hudson explain what's happening with the proposed legislation and where the real estate industry stands right now.

WATCH: How the real estate industry moves to kill a bill on rental commissions

NAR hit with another antitrust suit over buyer-broker commissions

Marcus & Millichap says ex-broker hid $90K commission in side deal

Home listings startup launches in SoFla with expansion plans for NY, California

Is your agent looking out for you, or someone else?

Commercial brokers made more money last year than ever before: NAR

Why For Sale by Owner listings are fizzling

Paying the right commission is ultimately up to you