When buying or selling a home in Alabama, understanding real estate commissions is crucial for effective budgeting and negotiation. In 2024, new rules have changed how real estate commissions are communicated across the U.S., providing more clarity for buyers and sellers. These changes aim to promote transparency and allow for more informed decisions in navigating real estate fees.
So whether you’re a first-time homebuyer or seasoned seller, this Redfin guide will help you navigate Alabama’s real estate commissions and what to expect in the current market.
Current state of the Alabama housing market
Before we explore real estate commissions in Alabama, let’s first examine the state’s housing market.
| Median Home Sale Price | $287,000 |
| Housing Supply | 25,755 (+22.1% YoY) |
| Homes Sold Above List Price | 19.2% (-4.8 pts YoY) |
Understanding real estate commissions in Alabama
What are real estate commissions?
Real estate commissions are fees paid by homebuyers or sellers to their agents for assisting in the successful completion of a transaction. These fees are paid at closing and are typically calculated as a percentage of the property’s sale price.
Who pays the commission?
In the past, sellers traditionally covered both their own agent’s commission and the buyer’s agent fees from the sale proceeds. However, starting August 17, 2024, buyers are now required to agree to their agent’s fee in writing before they begin home tours.
While buyers can still request that the seller pay their agent’s commission during the offer process, this change means the amount a seller might pay for a buyer’s agent can vary, and is entirely negotiable.
Average real estate commission rates in Alabama
In Alabama, real estate commission rates can vary widely depending on the specifics of the transaction and the agreement between the parties involved. While there are typical expectations for commission rates, these fees are fully negotiable, allowing buyers and sellers to work with their agents to find a structure that best suits their needs.
Factors such as the property’s location, market conditions, and the services provided by the agent can all influence the final commission. This flexibility gives both parties room to discuss and adjust fees to fit their budget and goals. Here’s a detailed overview of example commission rates based on median home prices across some of Alabama’s largest cities.
| City | Median Home Sale Price | 1.5% Real Estate Commission | 3% Real Estate Commission | 5% Real Estate Commission |
| Huntsville | $340,950 | $5,114 | $10,229 | $17,048 |
| Birmingham | $189,000 | $2,835 | $5,670 | $9,450 |
| Montgomery | $187,000 | $2,805 | $5,610 | $9,350 |
At Redfin, we’re committed to providing consumers with the best value possible. To support this, we offer sellers a listing fee starting as low as 1%.* For buyers, our fees differ by location, but remain competitive to help ensure your offer stands out and improves your chances of success in the homebuying process.
Can you negotiate real estate commissions in Alabama?
Absolutely! There are no laws or regulations in the U.S. dictating commission rates, so agents may be willing to negotiate lower rates depending on the type of transaction, the required services, and the relationship.
When negotiating real estate commissions, it’s important to consider the level of service offered by the agent, the marketing strategies they plan to use, and their experience in the local market. In some cases, sellers may be able to negotiate lower rates if their property is highly desirable or expected to sell quickly. Additionally, if the same agent represents both the buyer and the seller in a dual agency situation, there may be room for a further reduction in commission fees since no second agent is involved.
Tips for a successful negotiation
- Compare multiple agents and their commission structures before choosing.
- Discuss performance-based incentives, such as offering a higher commission for a faster sale or better final price.
- Leverage your property if it is in a desirable area, as agents may be willing to accept lower commission.
Alabama real estate commission FAQs
What are the changes to real estate commission? Two key shifts have reshaped how commissions are handled. First, buyers must now agree to their agent’s fees in writing before beginning home tours. Second, the way these fees are advertised has changed—in many markets, buyer agent compensation can no longer be displayed on MLS listings. Learn more about the real estate commission changes here.
How do the changes impact buyers in Alabama? Buyers are now required to sign an agreement with their agent regarding their commission rate before they start touring homes. However, you can still request that the seller cover your agent’s fee as part of your offer.
How do the changes impact sellers in Alabama? Sellers will still have a discussion with their listing agent regarding the compensation they wish to offer the buyers’ agent, if any. The seller will review any requests and negotiate terms of the offer.
How do you find a real estate agent in Alabama? If you’re ready to start your home search, or sell your house, Redfin is here to help. Connect with a Redfin agent today.
How can you avoid fees? Selling a home without an agent in Alabama can save on commission fees, but for sale by owner (FSBO) transactions require more effort from the seller, including handling marketing, showings, and paperwork.
*Listing fee subject to change, minimums apply. Any buyer’s agent fee the seller chooses to cover not included. Listing fee increased by 1% of sale price if buyer is unrepresented. Sell for a 1% listing fee only if you also buy with Redfin within 365 days of closing on your Redfin listing. We will charge a 1.5% listing fee, then send you a check for the 0.5% difference after you buy your next home with us. Learn more here.
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