Alabama real estate commission rates are around 5.52%, according to an August-September 2023 survey conducted by FastExpert. (The national average real estate commission rate is 5.57%.) Using this information – and the average home value in some of Alabama’s largest markets – will help you understand how much money you may make on an average sale as a real estate agent.
Keep reading to learn about a real estate agent’s salary structure. You’ll learn how commissions are calculated, how they are shared between agents and brokerages, and how commission rates vary by property type.
How Real Estate Agent Commission Works in Alabama
You probably already know that most real estate agents work solely on commission, which is based on a percentage of the property’s sale price. This system has been in place since the 1950s and, despite recent headlines, continues to be the way real estate agents are paid.
You’ll share your commission with your brokerage – typically with either a fixed or graduated commission split.
Regardless of your commission split or rate, the more you sell as a real estate agent, the more you earn! The ability to maximize your earnings may be one reason you want to work in the real estate industry.
Now, let’s examine how a real estate commission in Alabama is calculated.
How is real estate commission in Alabama calculated?
Real estate agents agree to provide services to their clients for a set commission rate. Once the transaction is complete, the commission rate is multiplied by the sale price to determine the REALTOR®’s commission.
The buyer’s agent and seller’s agent typically share this commission. Those agents’ brokerages will also receive a share of this income.
According to Zillow, the average home value in Alabama is currently $221,926. Since the average negotiated commission rate in Alabama is 5.52%, real estate professionals will receive $12,250 for offering services related to the transaction.
Who pays the real estate commission in Alabama?
The seller typically pays the real estate commission in Alabama. Usually, the REALTOR® fees are deducted from the proceeds the seller makes when the sale is finalized.
Does the real estate commission rate in Alabama fluctuate over time?
The real estate commission rate has remained relatively steady in the U.S. – at around 6%. Some real estate agents negotiate their commission rates to get more business. This practice and the increase in popularity of online real estate companies may account for slightly lower commission rates. However, real estate commission rates continue to hover around 5-6% nationwide.
Average Real Estate Commission Rate in Alabama
The average real estate commission rate in Alabama is 5.52%.
According to the Bureau of Labor Statistics, the average income of a real estate salesperson in Alabama is $58,840. However, the data gathered by this organization doesn’t account for real estate agents working part-time.
Average Alabama real estate commission rate by city
We know you want to know how much commission you can expect as a real estate salesperson in Alabama. We’ve done the math for you. Below is the average home value in Alabama’s ten most populated cities. Based on a 5.52% commission rate, here’s how much real estate professionals earn by selling an average Alabama property.
Average Real Estate Commission for 10 Alabama Cities
| City | Average Home Value | 5.52% Real Estate Commission |
| Huntsville, AL | $276,878 | $15,284 |
| Montgomery, AL | $137,270 | $7,577 |
| Birmingham, AL | $102,370 | $5,651 |
| Mobile, AL | $183,564 | $10,133 |
| Tuscaloosa, AL | $207,537 | $11,456 |
| Hoover, AL | $423,088 | $23,354 |
| Auburn, AL | $350,820 | $19,365 |
| Dothan, AL | $184,647 | $10,193 |
| Madison, AL | $371,983 | $20,533 |
| Decatur, AL | $206,373 | $11,392 |
Source for Average Home Value: Zillow. December 2023
As mentioned earlier, this 5.52% commission is typically split between the buyer’s and seller’s agents and their brokerages. Also, as a REALTOR®, you must pay taxes for those earnings.
Average Alabama real estate commission rate by property type
So far, we have focused on residential real estate commissions. However, when you become a real estate agent, you may focus on a different niche, such as commercial real estate.
Some commercial real estate transactions use the same 6% commission rate. Other commercial commissions are graduated (5% up to $1M, 4% of $1M-$5M, for example). Finally, some commercial real estate agents negotiate for a flat fee. Commercial real estate commissions often vary depending on the property’s location, market conditions, and the deal’s complexity.
If you decide to focus on commercial real estate in Alabama, seek a brokerage that focuses on this niche and take as many Alabama state-approved continuing education courses and specialized training as you can to target this industry segment.
How Is the Commission Divided Between Agents?
It’s important that you realize that the 5.52% Alabama real estate commission is typically shared between the buyer’s agent and the seller’s agent and their respective brokerages. Here’s how the commission is typically divided between real estate professionals in Alabama.
Example of How Commission Splits Work in Alabama Real Estate for a $221,926 Property
| Item | Amount |
| Sale Price of home | $221,926 |
| Total commission paid to real estate professionals | $12,250 |
| Seller’s agent commission (based on a 50/50 split) | $3,062 |
| Seller’s agent’s brokerage commission | $3,062 |
| Buyer’s agent commission (based on a 50/50 split) | $3,062 |
| Buyer’s agent’s brokerage commission | $3,062 |
We hope these numbers give you some understanding of how much income you may expect to make working as a real estate agent in Alabama. However, it’s important to note that there’s a direct connection between the number of hours worked and income. So, your income as a real estate agent depends on you.
Are you excited to become a real estate agent in Alabama? It would be a good career move! Being a REALTOR® is a rewarding profession with unlimited income potential. The sooner you start the licensing process, the faster you can get started earning these impressive commissions.
When you are ready to start your pre-licensing courses, turn to Colibri Real Estate. Colibri Real Estate (formerly Real Estate Express) is a leading real estate school in Alabama. Colibri Real Estate offers two ways to take your Alabama real estate classes – online at your own pace or via virtual livestream classes. No matter what format you choose, you can be assured that you’ll receive a quality education.
Once licensed, you can rely on Colibri Real Estate for career guidance and continuing education that prepares you for your licensing exam – and your career.
Learn more about the Alabama pre-licensing process. Then, when you are ready, enroll in the 60-hour Colibri Real Estate licensing course for Alabama.
Sources:
1. “Alabama Home Prices & Home Values.” December 6, 2023. Zillow. Alabama Home Prices & Home Values | Zillow
2. Matarazzo, Steph. “Average Real Estate Agent Commissions by State (2023 Survey).” FastExpert. October 26, 2022. https://www.fastexpert.com/blog/real-estate-agent-commissions-by-state/.
3. “Real Estate Sales Agents.” U.S. Bureau of Labor Statistics, April 25, 2023. https://www.bls.gov/oes/current/oes419022.htm#st.
