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

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

Oct.October 07, 2016 12:10 PM

From the New York website: 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 Articles


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

Reali, another tech-driven real estate startup, expands to LA

Paying the right commission is ultimately up to you

After the closing: What happens when brokers battle over commissions

Realogy shelled out $53M in commissions amid hiring push

Placeholder image

Average US real estate commissions dropping to low 5% range

Crown Realty & Development CEO Robert Flaxman (Credit: Getty Images)

Singin’ the Varsity Blues: Developer Robert Flaxman sentenced in admissions scandal

1181 N. Hillcrest Road LLC President Bruce Makowsky and 1181 N. Hillcrest Road

Developer Bruce Makowsky asked associates to violate campaign ethics law, city officials say