When you decide it is time to sell your home or buy a new one you can either try to do it on your own or hire a real estate agent. Typically homes sell faster and for more money when you have a real estate agent who is experienced in the Maryland market. Of course, hiring one means you have to think about the real estate agent commission and what it will end up costing for the work they do for you.
Real Estate Agents make money by charging a commission. This is a percentage of the sale price of the property. Sellers are usually the ones responsible for paying this fee that is divided between their agent and the buyer’s agent. But it can be negotiated when ironing out the terms of the contract and, depending on the market in Maryland at the time, can end up being split or covered by the buyer.
How Much is a Realtor Commission in Maryland?
Currently in Maryland, the average asking commission for a real estate agent is 5.08%. That means that on a home selling for $200,000 you would pay $10,106.
The national average total real estate commission in 2015 was 5.26%. On average, people who are selling their homes in the U.S. spend about $16,440 on realtor fees. That is a lot of money when you stop and think about it. So is it really worth it? Here are a few things to think about when answering that question.
What do Real Estate Agents Do?
It may seem like an easy job on the surface, but a lot goes into helping someone buy or sell a home. Good Realtors start by getting to know their clients and what is important to them. If they are representing a buyer, they will ask what the “must-haves” are in a new home. If they are representing a seller, they will ask what the non-negotiable terms are.
After the initial interview any or all of the following could come next:
- Organize staging and professional pictures
- Create listings with detailed descriptions
- Get properties listed on appropriate sites
- Contact other agents to see if there is a fit with their clients
- Organize and host open houses
- Show perspective buyers houses
- Prepare comps and analyze market conditions
- Be available to answer client questions and give advice
- Draft and prepare offers
Once a home is sold they have additional duties, such as:
- Working with the title company to organize needed paperwork
- Draft and prepare documents like contracts and closing statements
- Coordinate appraisals and inspections
- Work as an in-between for buyer and seller for any questions or concerns
Seeing all of this makes sense when you learn how much a realtor commission in Maryland is. If you decide to take this on your own you likely won’t be able to put everything else on hold till the transaction is completed. That means you will be doing all of this in addition to your regular job and responsibilities. This can create a lot of unneeded stress.
How do Real Estate Commissions in Maryland Work?
In most real estate transactions, there are two agents involved, the seller’s agent and the buyer’s agent. Both of these agents need to get paid for the work they do. As mentioned above, this is done through a percentage of the sale price, also called commission.
It is common practice for the seller to pay the commission which is split between their agent and the buyer’s agent 50/50. So how much commission does a realtor make in Maryland?
Since the current average commission rate in Maryland is 5.08%, and the median listing price for September 2021 was $374,995, that commission would be $19,049. That is $9,524 per agent.
In Maryland, the current median time on the market for a home is 37 days. If an agent is working with a seller it typically takes 3-5 days from the time a contract is signed to the time a listing goes live. So if we assume around 40 days of active work an agent is making about $238/day. Because, remember, agents work weekends.
Keep in mind that commission rates are negotiable and different agents may charge different rates depending on how long they have been active and what brokerage they are affiliated with. All in all, helping a client sell or buy a home is a full-time job.
What Makes the Real Estate Market in Maryland Unique?
Maryland is on the east coast and offers 3,190 miles of shoreline. It is home to Baltimore, the 30th largest city in the US, and borders Washington, DC. All of this has an impact on the housing market.
Large cities can draw a diverse crowd of home buyers, which can have an impact on nearby areas. Maryland cities like Potomac and Bethesda are in high demand from workers in the district, making home prices some of the highest in the state.
Real estate agents who live in a know the area will be able to help you choose the right area for you and your family. Depending on the lifestyle you hope to have, there are lots of options in the state, you just have to decide what is best for you.
In the end, paying a realtor commission in Maryland can seem like a cost to avoid. When you consider the expertise a good agent can bring to the table as well as the many hours it takes to find the right home or get a house sold, it may very well be worth it. Finding the right agent can really make all the difference. Find one that has worked in your area, has a good track record of sales, and fits your personality and you won’t regret getting help with this big life change.