Understanding real estate commissions is essential when navigating the Arizona housing market, whether you’re buying or selling a home. In 2024, new nationwide regulations were introduced, making real estate commission practices more transparent and improving communication between agents and clients. These changes aim to help both buyers and sellers make informed decisions about the costs involved in real estate transactions.
This guide will walk you through everything you need to know about real estate commissions in Arizona and how they could impact your next home sale or purchase, whether you’re a first-time buyer or an experienced seller.
Current state of the Arizona housing market
Before diving into real estate commissions, it’s helpful to understand the current housing trends in Arizona:
| Median Home Sale Price | $442,000 |
| Housing Supply | 37,216 (+26.8% YoY) |
| Homes Sold Above List Price | 15.0% (-5.3 pts YoY) |
Understanding real estate commissions in Arizona
What are real estate commissions?
Real estate commissions are fees paid to agents for assisting in the purchase or sale of a home. These fees are usually a percentage of the home’s final sale price and are paid at the time the deal is closed.
Who pays the commission?
Historically, the seller has paid both their agent’s commission and the buyer’s agent’s fees. However, starting August 17, 2024, buyers are now required to sign an agreement outlining their agent’s fee before they begin home tours.
While buyers can still negotiate for the seller to cover their agent’s fees, the amount the seller pays is entirely negotiable and can vary depending on the deal.
Average real estate commission rates in Arizona
Commission rates are flexible and open to negotiation based on the specifics of each transaction. Factors like the home’s location, current market trends, and the level of service provided by the agent can all affect the final rate. Below is an example of typical commission costs in some of Arizona’s major cities:
| City | Median Home Sale Price | 1.5% Real Estate Commission | 3% Real Estate Commission | 5% Real Estate Commission |
| Phoenix | $450,000 | $6,750 | $13,500 | $22,500 |
| Tucson | $321,500 | $4,823 | $9,645 | $16,075 |
| Mesa | $459,250 | $6,889 | $13,778 | $22,963 |
At Redfin, we aim to provide the best value for consumers. Our listing fees for sellers start as low as 1%*, while buyer fees may differ by location. Our competitive rates help ensure your offer stands out in a competitive market.
Can you negotiate real estate commissions in Arizona?
Yes, real estate commissions are fully negotiable in Arizona. Agents may be open to adjusting their fees based on the specifics of the transaction or the services they provide. It’s important to discuss these details and negotiate when appropriate.
Factors like the agent’s marketing approach, their experience in the local market, and the type of property being sold can all influence the final commission rate. Agents might be more flexible with their fees for high-demand properties or in a dual agency, where they represent both the buyer and seller.
Tips for a successful negotiation
- Consult multiple agents: Compare commission structures from several agents to find the best fit for your needs.
- Consider performance incentives: You can negotiate bonuses for agents if they sell quickly or secure a higher offer.
- Highlight property strengths: If your home is in a desirable area or expected to sell fast, use this as leverage to negotiate lower commission rates.
Arizona real estate commission FAQs
What are the changes to real estate commission? Two significant changes took effect in 2024: Buyers must sign an agreement specifying their agent’s fee before they begin touring homes, and in many markets, buyer agent fees are no longer shown in MLS listings. Learn more about the real estate commission changes here.
How do the changes impact buyers in Arizona? Buyers now need to agree to their agent’s fee in writing before touring properties. However, they can still negotiate with the seller to cover these fees when making an offer.
How do the changes impact sellers in Arizona? Sellers will now need to discuss with their agent how much, if anything, they are willing to contribute toward the buyer’s agent’s commission. This will be negotiated as part of the offer process.
How do you find a real estate agent in Arizona? Whether you’re buying or selling, Redfin agents are available to guide you through every step of the real estate process.
How can you avoid fees? If you decide to sell your home without an agent—commonly known as a For Sale By Owner (FSBO) sale—you can bypass paying commission fees. However, this option requires you to handle all aspects of the sale, including marketing, property showings, and legal 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.
This post first appeared on Redfin.com. To see the original, click here.