How Commissions Work: Standard real-estate commissions in Texas are 6%, typically split between the buyer's broker and the listing broker. All commissions are paid to brokers, who then split the funds between the brokerage and the agent per contractual agreement. The listing broker collects the full 6% commission from the selling price at closing and then pays 3% to the buyer's broker or broker subagent under certain circumstances per the listing agreement, which is only required if the buyer's broker is a member of the MLS. The listing agent and buyer's agent typically receive 50%-70% of their broker's commissions with the brokers keeping the balance to cover fixed expenses. Because the listing broker keeps the full 6% if there is not a buyer's broker in the transaction, they have no incentive to negotiate a lower commission for buyers without a broker. This applies to both existing homes and new homes - most people work directly with a builder to buy a new house, but because builders typically list new homes in MLS, they have agreed to pay 3% to the buyer's broker even though they won't discount 3% for people without a broker. Without a buyer's broker, you are leaving up to 3% of YOUR money on the table.
Anytime I hear 6% commission, the first question that always comes to mind is why a house that is twice the cost should be twice as expensive to sell? As a buyer's agent, it makes no sense to pay an agent who encourages you to overpay to make more money. As a seller's agent, I can understand paying for results, but that's not a flat commission - something more reasonable would be extra commission for achieving a selling price over an estimated market value, which is extremely rare.
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Data last updated: May 20, 2021
Based on information from
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through 2021.® IDX information is provided exclusively for consumers'
personal, non-commercial use. It may not be used for any purpose other
than to identify prospective properties consumers may be interested in
purchasing. All information provided is deemed reliable but is not
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updated: May 20, 2021 Texas law requires all real estate licensees to
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