If you’re preparing to sell your home in Illinois, one of your top questions is likely – what percentage do most Realtors charge in commissions? Understanding real estate broker commission rates can help you budget for your sale and negotiate fair compensation for the broker representing your interests.
What Percentage Do Most Realtors Charge in Illinois?
In Illinois, Realtors most commonly charge a total commission of 5-6% of the home’s final sale price, typically split between the listing broker (2.5-3%) and buyer’s broker (2.5-3%). The commission percentage can be influenced by several factors such as home value, market conditions, agent experience or services rendered.
Nevertheless, it’s pivotal to negotiate terms ensuring fair compensation for agents while maximizing seller profit.
Typical Realtor Commission Rates in Illinois
Across Illinois, the statewide average real estate commission on a home sale is 5.24% of the final sale price. This commission gets split between the listing agent representing the home seller and the buyer’s agent representing the purchaser.
- According to data, the average commission for a seller’s agent in Illinois is 2.68% of the total sales price. And for the buyer’s agent, it is approximately 2.56%.
- For example, on a $500,000 home, the average commission would be 5.24% or $26,200. This gets divided into $13,400 (2.68%) for the seller’s agent and $12,800 (2.56%) for the buyer’s agent. We have used the average percentage to calculate, but it can be anywhere between 2.5-3%.
Of course, this can vary based on the local market and brokers. But statewide, 5.24% serves as a reasonable benchmark.
Component Commission Rates
To better understand the typical total commission, let’s break it down further:
1. Seller’s Agent Commission
The seller’s agent, also called the listing agent, earns a commission for representing the home seller’s interests. Their responsibilities include:
- Listing and marketing the home to attract buyers
- Scheduling home showings and open houses
- Negotiating offers and contracts with potential buyers
- Guiding the seller through contingencies like inspections
- Coordinating appraisals, documentation, and the closing process
- Advising the seller on pricing strategy and staging
On average, seller’s agents in Illinois earn 2.68% as their portion of the total commission.
2. Buyer’s Agent Commission
The buyer’s agent represents the homebuyer’s interests. Their role includes:
- Helping buyers find and preview homes that meet their criteria
- Advising buyers on competitive offers and negotiation strategies
- Assisting with inspections, appraisals, and other contingencies
- Explaining mortgage options, associated fees, and loan estimates
- Serving as liaison between buyer and seller agents
- Guiding the buyer through the closing process
In Illinois, buyer’s agents typically earn around 2.56% as their share of the total commission.
3. The MLS Commission
A portion of both the listing and buyer’s agent commissions goes to the local MLS (multiple listing service) they belong to. MLS platforms provide the real estate data and contacts that enable agents to show, market, and close sales. This generally equates to around 20% of their earned commission.
4. The Brokerage Commission Split
Agents must also pay a portion of their earnings, typically 30% to 50%, as a split to their brokerage firm to cover administrative costs, office expenses, licensing fees, and broker oversight.
Newer agents tend to pay higher splits while top producers earn more favorable rates.
What Impacts the Commission Percentage?
While 5-6% is typical, the precise real estate agent commission percentage may be higher or lower based on factors like:
- Home sale price – Sellers of luxury homes with high price tags can sometimes induce Realtors to lower commission rates to around 4% to 5%.
- Local market conditions – Commission rates can trend lower in buyer’s markets or in environments with a lot of competition for business.
- Agent experience – Top agents with a good local reputation can command commissions at the higher end at 6%. Newer agents may reduce rates to win business.
- Services rendered – Full-service agents often earn traditional rates while limited services like MLS-only listings can mean lower commissions.
- Repeat and referral business – Agents may offer discounts to cultivate ongoing relationships with clients that can generate referrals and additional business.
- Sales volume – Large volume home sellers may negotiate lower commissions, especially when listing many units in new construction projects.
So in reality, real estate commissions are negotiable on a case by case basis, within reason. The percentages aren’t set in stone.
Comparing Illinois Realtor Commission to National Averages
Illinois real estate agent commissions are very much in line with national norms. Across the U.S., most realtors charge total commissions of between 5-6% of the sale price on residential transactions. Many states see a 50/50 split between sellers’ and buyers’ agents.
Certain states like New York, California, and Florida have slightly higher average commissions around 6-7% total. More affordable markets may trend closer to 4-5% commissions. But the 5-6% standard remains the norm across most states.
Tips for Negotiating Favorable Commissions
As a home seller, here are some tips for negotiating a fair and reasonable real estate agent commission:
- Seek quotes from multiple brokerages so you can compare options.
- Consider negotiating a lower percentage on higher priced properties – this saves you money while still providing agents with significant commission compensation.
- Ask prospective agents about their commission negotiation policies. Some are more flexible than others.
- Offer tiered commission structures – for example, 6% on the first $100k, 5% on the next $100k, etc.
- Ensure you understand what marketing effort the Realtor intends to do – more marketing can justify higher compensation.
- Make sure you’re comfortable with the agent and their track record of success before committing to high commissions.
The Bottom Line
Most Realtors in Illinois charge commissions in the 5-6% range to sell residential properties. While this represents the norm, sellers can still negotiate and should always ensure the commission percentage aligns with the value being provided.
Paying competitive commissions allows you to maximize your profits while still ensuring your agent is fairly compensated.