The average real estate commission rate in Maryland is 5.46% of a property’s purchase price, based on a 2024 survey by FastExpert. This is slightly lower than the U.S. average real estate commission of 5.57%. If you’re considering a career as a real estate agent in Maryland, this information can help you estimate the number of properties you need to sell at a specific price point to achieve your income goals.
Read on to learn how to calculate real estate commissions in Maryland. We’ll explain how these commissions are determined and who pays them. Additionally, we’ll provide the average commission rates you can expect in Maryland’s ten most populated cities. We will also explore the potential effects of the proposed National Association of REALTORS® settlement on real estate agent earnings.
How Real Estate Agent Commission Works in Maryland
Most real estate agents do not earn a regular salary; instead, they work entirely on commission. This commission-based compensation model has been the standard since the 1950s. However, changes to this structure, particularly for buyer’s agents, are anticipated due to the recent NAR lawsuit. Despite potential shifts in commission structures in the Maryland market in the coming months, the demand for real estate agents will remain high. The more transactions you handle, the more income you will generate.
Related: How Do REALTORS Get Paid? What Every Agent Needs to Know!
How is the real estate commission in Maryland calculated?
Typically, seller’s agents agree to provide services to their clients for a set commission rate, which is often shared with the buyer’s agent. Once the transaction is complete, the commission rate is multiplied by the property sale price to determine the payment to the real estate professionals.
There is speculation that this system may change now that seller’s agents can no longer advertise the buyer’s agent commission on an MLS. However, it remains to be seen how commission structures will evolve due to the NAR settlement. Seller’s agents might continue sharing their commissions with agents who bring buyers to their listings, or in some cases, the seller (or buyer) might agree to compensate the buyer’s agent directly.
Real estate agents following the traditional structure will still be compensated based on the property’s sale price. According to Zillow, the average home value in Maryland is currently $422,711. Given Maryland’s average negotiated commission rate of 5.46%, real estate professionals receive approximately $23,080 for managing the average transaction.
Who pays the real estate commission in Maryland?
In Maryland, the seller typically covers the real estate commission. However, this fee structure might change due to the recent NAR settlement, potentially leading to more buyer agents being paid directly by their clients. Going forward, buyer’s agents must have a written agreement with their clients outlining the compensation.
Does the real estate commission rate in Maryland fluctuate over time?
Despite recent headlines and increasing competition from online real estate companies, commission rates in Maryland and across the U.S. have remained relatively steady at around 6%. Real estate commission rates have always been negotiable.
Average Real Estate Commission Rate in Maryland
The average real estate commission rate in Maryland is 5.46%.
According to data collected by Colibri Real Estate, the average income of a real estate agent in Maryland is $62,637.
Average Maryland real estate commission rate by city
Below is the average home value in Maryland’s ten most populated cities. Based on a 5.46% commission rate, here’s how much real estate professionals earn by selling an average Maryland property.
Average Real Estate Commission for 10 Maryland Cities
| City | Average Home Value | 5.46% Real Estate Commission |
|---|---|---|
| Baltimore, MD | $188,706 | $10,303 |
| Columbia, MD | $499,314 | $27,262 |
| Germantown, MD | $430,999 | $23,533 |
| Frederick, MD | $459,943 | $25,113 |
| Waldorf, MD | $432,006 | $23,588 |
| Silver Spring, MD | $547,143 | $29,874 |
| Ellicott City, MD | $721,524 | $39,395 |
| Glen Burnie, MD | $377,563 | $20,615 |
| Gaithersburg, MD | $529,625 | $28,918 |
| Rockville, MD | $625,358 | $34,144 |
Source for Average Home Value: Zillow. July 2024
As mentioned, this 5.46% commission is typically split between the buyer’s and seller’s agents and brokerages.
Average Maryland real estate commission rate by property type
So far, we have focused on residential real estate commissions in Maryland. However, some real estate agents specialize in commercial real estate or other niches, such as investment properties or vacation homes.
In commercial real estate, some transactions use the standard 6% commission rate, while others employ a graduated structure (e.g., 5% up to $1M, 4% for $1M-$5M). Additionally, some commercial real estate agents in Maryland negotiate a flat fee.
Commissions in commercial real estate vary based on the property’s location, market conditions, and deal complexity.
If you focus on commercial real estate in Maryland, it is beneficial to take as many continuing education courses and specialized training as possible to serve your clients in this niche better.
How Is the Commission Divided Between Agents in Maryland?
The 5.46% real estate commission is typically divided between buyer and seller agents and their respective brokerages. Here’s an example of how this commission split might look for an average transaction.
Example of How Commission Splits Work in Maryland Real Estate for a $422,711 Property
| Item | Amount |
|---|---|
| Sale Price of home | $422,711 |
| Total commission paid to real estate professionals | $23,080 |
| Seller’s agent commission (based on a 50/50 split) | $5,770 |
| Seller’s agent’s brokerage commission | $5,770 |
| Buyer’s agent commission (based on a 50/50 split) | $5,770 |
| Buyer’s agent’s brokerage commission | $5,770 |
We hope these figures give you a better understanding of what you can expect to earn on an average transaction as a real estate agent in Maryland.
Becoming a real estate agent can be a rewarding full-time career or side gig with unlimited income potential. The sooner you begin the licensing process, the sooner you can earn these impressive commissions. Sign up today for your pre-licensing courses with Colibri Real Estate School.
Colibri Real Estate’s Maryland real estate classes are convenient and affordable. Our online, self-paced courses allow you to complete your studies anytime, anywhere. You’ll receive a quality education designed by local experts to prepare you to become a top-producing real estate agent in Maryland.
Key Takeaways
- Maryland’s average real estate commission rate is 5.46% of a property’s purchase price, slightly below the U.S. average of 5.57%.
- Typically, sellers pay the commission, which is split between the buyer’s and seller’s agents. However, the recent NAR settlement may lead to changes, potentially resulting in more buyer agents being paid directly by their clients.
- Real estate agents in Maryland can expect to earn around $23,080 per average transaction, based on the current average home value of $422,711 and the 5.46% commission rate.
- Some agents focus on commercial real estate or other niches, such as investment properties or vacation homes, where commission rates and structures may vary. Continuing education and specialized training are beneficial for effectively serving clients in these niches.
