What’s the Average Arizona Real Estate Commission Rate?
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Jennifer Schmidt, Contributing AuthorClose
Jennifer Schmidt Contributing AuthorJennifer Schmidt is a freelance writer based in Vancouver, Washington, who specializes in real estate, human resources, and technology. When not writing, you’ll find her scanning real estate listings for the latest housing trends and decorating ideas.
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Richard Haddad, Executive EditorClose
Richard Haddad Executive EditorRichard Haddad is the executive editor of HomeLight.com. He works with an experienced content team that oversees the company’s blog featuring in-depth articles about the home buying and selling process, homeownership news, home care and design tips, and related real estate trends. Previously, he served as an editor and content producer for World Company, Gannett, and Western News & Info, where he also served as news director and director of internet operations.
Editor’s note: On March 15, 2024, the National Association of Realtors (NAR) announced a landmark lawsuit settlement that will change the way real estate agent commissions are handled in the future. These changes will “decouple” seller and buyer agent compensation. Industry experts predict that this decoupling will likely lower agent fees and give buyers the ability to negotiate commission amounts directly. Learn more.
Most real estate agents in Arizona get paid through commissions. Commissions are typically calculated as a percentage of a property’s sale price, though some brokerages will charge a flat fee. The average agent commission rate nationwide is 5.8% of the home sale price, according to HomeLight’s real estate transaction data of thousands of home sales each year. But how does that compare to the average real estate commission rate in Arizona?
In this post, we’ll help you determine how much commission you might pay on your Arizona home sale, and what options are available to earn the highest proceeds possible.
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What’s the average real estate commission in Arizona?
According to top-performing agent James Rusch-Michener, you can expect to pay between 5%–5.5% in agent commissions when selling a home in Arizona, with some variation based on location within the state. On a property worth the current statewide median home sale price of around $352,536, that amounts to $17,627–$19,389 in commission costs.
Michener, who works with over 67% more single-family homes than the average agent in his Prescott market, says the commission generally varies between the northern and southern parts of Arizona, with Black Canyon City — approximately 22 miles north of Phoenix — being the dividing point.
“From Black Canyon City south, is probably, like, five percent, and northern Arizona from Black Canyon City north, is about five and a half percent, is what I would say.”
He explains that, in general, in the northern area of Verde Valley and Flagstaff, the commissions are more established than in his area, where the commissions at times have been in the 4% range.
Using an overall statewide average of 5.25%, here’s a breakdown of how much you might pay in real estate commissions based on what a home sells for in six of the largest cities in Arizona:
| Arizona city | Median home price | Typical commission at 5.25% |
| Phoenix | $515,000 | $27,038 |
| Tucson | $379,000 | $19,898 |
| Mesa | $491,800 | $25,820 |
| Chandler | $589,500 | $30,949 |
| Gilbert | $650,000 | $34,125 |
| Glendale | $460,000 | $24,150 |
Median home prices are calculated from multiple public sales data sources.
HomeLight gathers agent commission data from cities throughout the U.S. To see if we have commission rates for your city, try our Agent Commissions Calculator. You might also be interested in our Net Proceeds Calculator and Home Value Estimator.
Still curious about commission rates in Arizona? Here are the answers to common questions about real estate agent commissions:
Who pays real estate commission fees?
The seller will pay the listing agent’s fee. As Michener explains, the commission can generally vary depending on what the listing agent has determined is appropriate with the seller’s approval. This will then be divided between the listing agent and their brokerage in a predefined split, usually 70/30, with the agent getting the lion’s share.
“They generally go into the listing knowing exactly what they’re going to get because it’s [listed] at the bottom of the property profile and shows them what they’re going to receive in terms of compensation,” says Michener.
Licensed real estate agents access these property profiles on the local multiple listing service (MLS), a database of homes for sale that is maintained by real estate professionals.
When is the commission paid?
The real estate commission will automatically be deducted from the sale proceeds at the time of closing. Until then, you typically won’t owe any money to the real estate agent.
Does the agent get to keep the full commission?
Although the seller pays the entire commission, the listing agent, who is representing the seller in a transaction, doesn’t keep it all. Part of their commission will go toward marketing your property with professional photography, open houses, offline marketing, and more.
Before the settlement terms of the NAR lawsuit were approved, the commission was typically split 50/50 with the buyer’s agent to compensate them for bringing a buyer to the sale and coordinating the buy side of the transaction. So, around 2.5% to 3% goes to the listing agent, and the other 2.5%–3% goes to the buyer’s agent.
Both the listing agent and the buyer’s agent will then share a percentage of their commission with their sponsoring broker.
These split rates can vary; however, it’s common for the listing agent to give their broker anywhere from 30%–50% of their commission, depending on the agent’s level of experience, their market size, and brokerage agreement.
How is the commission divided between agents?
The commission that’s paid by the seller will typically be split among each agent and the brokerages through which they hang their real estate license. Let’s say you sell your home for $420,000, and both the buyer agent and the listing agent get a 3% commission. The total commission would be $25,200, and each agent has an 80/20 split agreement with their brokerage. Here’s how that might look:
- Listing agent: $10,080 (80% of their $12,600 commission share)
- Listing broker: $2,520 (20% of their $12,600 commission share)
- Buyer’s agent: $10,080 (80% of their $12,600 commission share)
- Buyer’s broker: $2,520 (20% of their $12,600 commission share)
Michener says that in Arizona, brokers will generally receive between 5%–20% paid by each agent after the sale is completed.
Are Arizona commission rates negotiable?
You can negotiate real estate agent commission rates, but don’t be surprised if your agent holds firm on how much they charge. A Consumer Federation of America report found that only 27% of agents are willing to negotiate the commission.
One reason agents often don’t lower their rate is that it may reduce their ability to negotiate a higher sale price for the seller. An agent’s services often include photography and pricing analysis, so a lower commission could also translate into a smaller marketing budget for your property, an inaccurate list price, fewer home promotions, and a lower likelihood of selling.
Exceptions can occur if you’ve already found a buyer. Let’s say you’re selling your ranch home to a friend, or have decided to sell to a family member; in that case, the agent would likely be willing to play the role of transaction coordinator and independent go-between for a reduced commission rate.
“A lot of times, sellers know that they can negotiate commissions as well. I mean, it’s a pretty well-known fact that you can negotiate that with your listing agent. Some listing agents won’t negotiate it, [but] about 95 percent of them will negotiate that,” Michener explains.
Overall, commissions in Arizona are negotiable but do your research first. When asking an agent to lower their pay, you’re limiting the pool of agents willing to work with you. And the downsides to working with a low-commission agent can be steep. Without a top Arizona agent in your corner, you could dramatically undersell your home, have a rough selling experience, or fail to sell the home at all.
What is the lowest commission an Arizona Realtor® can take?
According to Michener, there are generally no minimum or maximum commissions that a real estate agent can charge as their commission.
For example, an agent may charge a flat fee of $1,000 or 7%, depending on the client’s affordability to list a property or one that is more complicated to sell.
What is included in a real estate agent’s commission?
A full-service real estate agent in Arizona will provide a high level of offerings that go toward giving you a great selling experience and boosting exposure to your home.
An agent’s services fall into a few main categories:
Guidance on pre-sale improvements
Agents see a lot of houses in their Arizona markets. They will have an eye for the small but impactful improvements you could make to help it sell for more. The best agents will go above and beyond to help their clients get the job done.
Pricing strategy
An agent will put together a comparative market analysis (CMA) in the form of a thick packet featuring charts, facts, figures, and photographs of houses. The analysis will show you what your home is worth based on comparable sales in the neighborhood, market trends, and local price per square foot. This key tool helps you set a realistic price that can attract offers right off the bat in a fraction of the time it would take a non-professional to determine.
Marketing services
As part of their commission, at a minimum, Arizona agents should offer expert home prep and staging, professional photography, marketing flyers and pamphlets, direct mail, automatic postings of your listing on major home search sites, local advertisements, exclusive previews for other brokers, and open house coordination. Advanced agents may also offer the development of a virtual tour.
Michener explains the importance of a marketing plan when he presents options to a potential client.
“I do a full presentation with an appraisal marketing plan — what my statistics are, tips on showing your property — which is all written down, and then the marketing plan, which is pretty comprehensive. It has every detail of what we’re going to do written down on it. Which is the difference between me and a lot of agents as we come in fully prepared.”
Offer management and negotiations
When you receive one or multiple offers, an agent will help you determine the strength of the offer and work with you to proceed with responding to buyers. They’ll advise on whether to accept, reject, or make a counteroffer while putting together offer spreadsheets to identify the best offer in bidding war situations.
“You’re going to get the most amount of action in the first 14 to 21 days, and then after 30 days is when it starts getting stigmatized. But if you’re going to get multiple offers and bid it up and get the most amount of money, you’re generally going to do that in the first 30 days of the listing,” says Michener.
If a buyer requests repairs after the inspection, an agent will help you push back where appropriate and advise on when to concede. Should the appraised value be lower than the contract price, an agent can help you determine whether to ask the buyer to make up the difference or if you should lower your price.
Market knowledge and neighborhood expertise
Great Arizona real estate agents know what local buyers seek in homes and which of your home’s attributes to highlight. An agent will skillfully incorporate key features into your home’s listing description and immediately be able to recognize what makes your house or the surrounding area special.
What is a fair real estate commission in Arizona?
As noted above, the average commission rate in most Arizona markets is between 5%-5.5% to hire a full-service real estate agent. This rate should mean you have an agent who is dedicated to selling your home for the best possible price, who is available and communicative, and who is willing to shepherd the transaction from start to finish. If an agent isn’t willing to offer all or the majority of services listed above, you should interview more candidates.
Michener also advises sellers to compare the list-to-sell ratio between different agents.
The list-to-sell (or list-to-sale) ratio is a telling measure of an agent’s performance, indicating how often they sell a home for more or less than the asking price. It’s a percentage calculated by dividing the final sale price by the property’s list price. An agent with a ratio above 100% means they have a track record for selling homes for more than the list price.
If one agent offers a lower commission of 4% but also routinely receives a lower sales price, that doesn’t usually make up the difference in saving on their commission. On the other hand, you might pay a higher commission for a full service Realtor who can market your property to receive a higher offer, which would then offset the higher commission.
What if my Arizona house doesn’t sell?
Real estate agents only get paid commissions if and when your home sells successfully. Most real estate contracts include an exclusive right to sell, which gives the real estate agent the sole rights to market the property, list the property on MLS, and receive the commission if the sale closes in a determined time frame. If your house remains on the market beyond the time period outlined in the listing agreement, you are not obligated to pay your agent.
However, keep in mind that your listing agreement may contain a protection clause, also known as a “brokerage protection clause,” “safety clause,” “extension clause,” or “tail provision.” The protection clause states that if a buyer who the listing agent introduced to the property purchases the property after the listing agreement expires, the seller still must pay the agent a commission.
Michener says the seller has to decide if they want their house to sit or sell. He gave an example of how one potential client wanted to list their property for $100,000 higher than he recommended. The client chose a different agent, but the house remained on the market for a month, and the seller eventually had to drop the price by $35,000 to $40,000.
“I told her as soon as that agent doesn’t fulfill what they said they’re going to do, please give me the opportunity to list it at the appropriate price and do the right marketing.”
How can you avoid paying Realtor fees?
There are two main ways to avoid paying Realtor fees. You can either sell your Arizona home without an agent’s help or sell it directly to a cash buyer without ever going on the market.
For Sale By Owner
Without a real estate agent, you’re responsible for preparing your home for sale, marketing, negotiating, and navigating legal and financial documents. When selling a house on your own, you’ll need to hire an attorney, at a minimum, to make sure the paperwork is right.
Typically, For Sale By Owner (FSBO) makes the most sense if you already have a buyer. As of 2023, 57% of FSBO sellers knew their buyer.
This indicates that while the FSBO route is rare, making up just 7% of sellers, it’s even more rare to forgo a real estate agent’s help when you don’t already have a buyer lined up and ready to go. In addition, according to a 2023 National Association of Realtors report, the median FSBO house sold for $310,000, compared to a median of $405,000 for agent-assisted sales. That’s a significant loss of proceeds in an effort to save 5.25% on commissions.
Sell to a cash buyer
Cash buyers — including iBuyers, investors, and house-buying companies — are individuals or entities that purchase your home outright, without the need for lender financing. These buyers typically make off-market purchases and can provide speed and convenience to sellers.
Just be aware that the price offered by most cash buyers may not match what you could receive on the open market with the help of a top agent.
If you’re interested in a cash sale, you can receive a no-obligation offer through HomeLight’s Simple Sale platform, with no hidden fees or agent commission. Simple Sale connects you to the largest network of cash buyers in the U.S.
Now you know how Arizona agent commissions work
Sellers pay real estate commissions in exchange for an agent’s expertise and services throughout the sale process. If you’re worried about the cost of the commission, consider that targeted upgrades, stellar marketing, and savvy negotiations can help you maximize your sale price. With a performance-proven Arizona agent to guide you, you also avoid the stress of navigating this complex process without professional oversight.
The key is finding a quality agent who provides the highest amount of value for their commission fee. In fact, our transaction data shows that the top 5% of agents in Arizona sell homes for as much as 10% more than the average agent.
HomeLight can connect you with top Arizona agents with experience tailored to your needs. Whenever you’re ready to get started, HomeLight would be happy to put your commission worries to rest by introducing you to several agents in your area who are well worth it.
Writer McCoy Worthington contributed to this story.
Header Image Source: (Gayatri Malhotra / Unsplash)
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