For Colorado residents considering or just beginning the process of selling a home. Among the many things to plan for and consider are Realtor fees in Colorado, which in 2022 came in at 5.52%, slightly higher than the national average.
Since the real estate commission is one of the factors you’ll consider in the process of selling your home, it’s important to ensure you understand what a real estate commission is, how it works, and what factors are at play in determining the fees you’ll pay in Colorado.
Below, we’ll break it all down so you enter the housing market as a well-informed and strategic seller.
If you’ve ever sold a home before, you know that one of the first things to do is find a real estate agent you’d like to work with and complete a listing agreement. Choosing to partner with a real estate agent can provide essential insight into what current buyers are looking for in a new home, how to best leverage and enhance your property’s features to quickly sell your home, and provide marketing services that will connect you to a broader network of potential buyers than you’d likely reach on your own.
The work of a great Realtor can dramatically improve your experience in selling a home — and as a result, Realtor fees in Colorado can come with what seems like a pretty steep price tag compared to the average real estate commission rate in the United States, which in 2022 was 5.37%.1
However, this number is not static from month to month or year to year — it also changes from one state to the next. For example, while Colorado’s average commission of 5.52% is just above the national average, neighboring Wyoming and Utah are slightly lower, at 5.36%.
There are a number of things that determine a particular location’s real estate commission rate, including the state of the economy and the real estate market. But far and away the most powerful factor in determining a state’s average is the typical cost of a home.
In states that have higher home sale prices, commission rates are typically lower than in states with lower home sale prices. This is because realtors are generally more willing to accept lower commission rates when a high-priced home is still going to bring in a sizable commission for them and their brokerage even with a reduced commission rate.
Here’s an example to help make this idea clearer. If a realtor in Colorado sells a home at the average market value of $577,500 with a commission rate of 5.52%, that comes to a commission of $31,878. In California, however, where average home prices in 2022 were $834,400 and average commission rates are a relatively low 4.91%, the Realtor fees will amount to $40,969.2
While these numbers are daunting to see, you generally don’t have to pay them out of pocket. Traditionally, the real estate commission is taken from the funds received in the sale of the home, and the money is divided approximately evenly between the buying and selling real estate agents. This means that of the $31,878 real estate commission mentioned above, each agent would receive $15,939 and would pay a portion of those earnings to their brokerage.
Although it’s important to know the average real estate commission rates in your area and the nation in order to assess the market and whether or not now is the right time for you to list your home, you don’t necessarily need to pay as much as the average rate. To a certain degree, sellers may be able to negotiate their commission rate down. Here are some ways you may be able to save some serious cash on your Realtor fees in Colorado:
While there is no guaranteed method for securing a reduced rate for your realtor fees in Colorado, these are a few avenues to explore when you decide it’s time for you to sell.
The average real estate commission rate fluctuated between 4.78% and 6.26% in 2022. Unfortunately, they’re expected to climb higher in 2023, as some experts predict we’re headed toward another economic recession and may mimic trends from the Great Recession of 2007.3 Remember, though, that these numbers are meant to serve as guideposts, not laws.
If you’re selling a house without connections to a trusted realtor, you still have a chance to negotiate reduced real estate agent fees in Colorado. Focus your energy on the things you can control, like the curb appeal and condition of your home. While connections can take you places, you can still arrive at your desired location another way. And if you do negotiate a great deal with an even better realtor, don’t forget to thank them for their work.
Source 1: Clever: "Real Estate Commission in Colorado." Accessed January 25, 2023.
Source 2: Expatrist: "How Much Does a House Cost in California." Accessed January 25, 2023.
Source 3: Bankrate: "Real estate commissions fall to new lows as homes fly off the market." Accessed January 25, 2023.
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