Critics want to change the salary of real estate agents. This is how it works in other countries.



When someone argues that real estate commissions in the United States should be lower, the UK usually pops up.

So it comes as no surprise that when a Minnesota homeowner sued the National Association of Realtors claiming the association’s rules upward pressure on buyer’s agent commissions, the UK was mentioned.

Making changes to the commission structure is a high rate. Any cut will affect both the millions of homeowners who sell each year because they are likely to save money, and hundreds of thousands of livelihoods because buyer’s agents are likely to get less per transaction.

To better understand the practice of different countries, we met with real estate agents from around the world to ask them how commissions – and the services provided by agents – differ from place to place.

United States

First, here’s a rundown of how things work in the United States. In a typical home sale, there are two agents, one representing the buyer and the other representing the seller. Both are paid a percentage of the sale price of the house.

Before a home is listed on the local multiple listing service – a platform that real estate agents use to share information about available homes – a home seller must decide what commission to offer to a homebuyer’s agent. Typically, home sellers pay between 2.5% and 3% to their listing agent and the corresponding amount to the buyer’s agent.

Even though buyers’ agents are paid by the seller, they are obligated to work in the best interests of the home buyer, which means they should not direct buyers to one home over another just because of the size of the commission, which may indicate self-interest. But people who want to change the system say the fear of steering is enough to keep buyers’ agent commissions higher than they would otherwise.

In their opinion, if the buyer decided how much his agent’s services cost, he would probably pay less. Many opponents of this argument believe that buyers in such a situation will end up with lower quality services, which can cost them when it comes to negotiating.

United Kingdom: Savills Agent Lindsay Cathill

Savills agent Lindsay Cathill leads the sale of country homes in England and Wales.

Savills agent Lindsay Cathill leads the sale of country homes in England and Wales.


Q: Purchasing agent commissions have come under scrutiny in the United States. People often cite UK fees because they are so low there.

BUT: The box office has been eroded over the years. When I started 30 years ago, royalties were definitely 2.5% single agency across the board, which was very easy. Now the average commission is less than 2 percent. And this is usually somewhere between 1.5 (percent) and 2 percent, depending on how the agencies are structured.

Of course, it used to be possible to buy solid houses for 100,000 pounds (30 years ago). Those same houses now cost 7 (million) 8 million pounds.

Our fees are subject to government tax, VAT, which is 20 percent of the amount collected. … So if it’s a 1.5 percent commission, in fact the seller will end up paying 1.75 (percent), 1.8 percent. This is the only thing that you cannot agree on.

Q: In the US, real estate commissions are split between the buyer’s agent and the seller’s agent. As far as I understand, there is no commission split in the UK, it’s all for the listing agent.

BUT: Usually not (buyer’s agent). There are purchasing agents – they work at the top of the price range market, both in London and in the country. For those people who want someone to be on their side, or maybe just too busy to do this kind of work, their fees will be in line with ours, probably between 1.5 (percent) and 2 percent. The buyer pays for this.

Q: Another problem you hear here is that without a buyer’s agent, the buyer can benefit. How does it work without someone holding his hand?

BUT: I think we would describe this as a duty to be careful. The consumer – in this case the home buyer is the consumer – does provide some degree of consumer protection. So real estate agents cannot be honest about something. They cannot pretend that something does not exist. If you ask the direct question, “Has this property ever been flooded?” – and the agent knows that this is so, he must disclose it. So there are care responsibilities.

Q: And when it comes to document verification, is there someone to help the buyer do this outside of your agency?

BUT: Yes. A purchase contract is always the subject of a contract and legal representation. So there is a point where the buyer appoints a lawyer.

Q: It seems that if you are not of a high level and do not want to get a buying agent, there is not much guidance in terms of negotiation.

BUT: No, and there probably aren’t many negotiations.

France: Savills agent Alex Balkin

Savills agent Alexei Balkin works on the French Riviera.

Savills agent Alexei Balkin works on the French Riviera.


Q: As far as I understand, in France, as well as in the UK, buying agents are rarely used. But sellers’ agents charge much higher fees.

BUT: The standard commission is 5 percent … This is mostly a traditional business.

Q: Some agents would be happy to hear that – even after the split of commissions (seller and buyer’s agent) – this amount remains so high. I mean, this is more than the listing agents are doing here. How does it work on the rare occasions when people really need a real estate agent?

BUT: Let’s say you come to me and say: “Alex, I will pay you, because I know you, I trust you.”

Then we (look for) a place that meets a certain number of criteria: price criteria, space criteria … and especially after COVID, we want to be where there are birds, bees, flowers, trees and all that. And then I can have such a property in my own portfolio. Or I can’t.

If I don’t, I don’t want (you) to leave disappointed. Therefore, I will contact people I trust in the market. And I would say, “Look, I saw that you have a property that could potentially meet the requirements of my client.”

And if she decides to buy it, (the seller’s agent and I) will split the fee 50 by 50.

Australia: Former Martha Turner Sotheby’s Houston agent Marlene Jacobs

Marlene Jacobs, Martha Turner's former real estate agent for Sotheby's in Houston (and sister of Houston Chronicle reporter Catherine Feather), recently sold her home in Australia, where listings work differently.

Marlene Jacobs, Martha Turner’s former real estate agent for Sotheby’s in Houston (and sister of Houston Chronicle reporter Catherine Feather), recently sold her home in Australia, where listings work differently.

Marlene Jacobs

(Jacobs is the sister of Houston Chronicle reporter Catherine Feather.)

Q: So auctions seem to be very common in Australia.

BUT: At first, when I was walking around the neighborhood, I saw an auction, I just couldn’t believe it.

Q: What did it look like?

BUT: It’s common in Melbourne on Saturday, there will be auctions. You will walk and you cannot help but stop and look. And there are really very outgoing auctioneers who are very good at it.

Q: You are selling your house there. Have you decided to put it up for auction?

BUT: I do not like this.


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