Real Estate Commissions in Iowa: Who Really Pays?

A steep 5% to 6% of your home sale price. That’s how much Realtor commissions are in The Hawkeye State. On a median-priced Iowa home of $232,700, this translates to $13,962!

The recent NAR settlement has cast doubt on the future of the 3% buyer agent commission structure. But the 3% listing agent fee is still up for grabs. With a Flat Fee MLS company like Houzeo, you can skip the listing agent and save almost $6,981!

With Houzeo, your home can be on the MLS within 24 hours. Moreover, you get access to tools available only to real estate agents. So, what are you waiting for?

How Much Are Realtor Commission Rates in Iowa?

The average Iowa real estate commission is 5.53%. However, this rate may vary based on the agreement, property type, and market conditions.

Here’s how much you would get for your home in Iowa with and without a listing agent:

Real estate agent commission rates also vary depending on your location. In major cities like Des Moines and Cedar Rapids, agents may charge up to 6% of the home’s value. For suburban or smaller areas, commission rates typically fall around 5%.

» What is My Home’s Worth: Find your home’s value briefly. This will help you calculate the agent fees.

How Is the Commission Split Between Real Estate Agents and Brokers in Iowa?

Real estate commissions in Iowa typically follow the structure given below:

The 6% Realtor commission in Iowa is equally divided between the listing agent’s brokerage and the buyer agent’s brokerage. Once operational expenses are accounted for, this 3% commission is further split between the agent and the broker.

Who Pays the Real Estate Agent in Iowa?

In Iowa, home sellers typically pay real estate commissions, which are usually included in the seller closing costs. A buyer pays only for the home and their own closing expenses.

✍️ Important Note: A recent lawsuit challenging the National Association of Realtors (NAR) on commission practices has been settled. As a result, sellers won’t take the whole brunt of paying the real estate agent fees.

Will the NAR Lawsuit Benefit the Home Sellers?

The recent tsunami of antitrust class action lawsuits against NAR has forced it to settle for $418 million. It has also led to a series of changes that could potentially reduce the burden of agent commissions on the seller.

Here are the settlement terms:

1. NAR will not create rules that mandate listing agents to set compensation for buyer brokers. There will now be room for independent negotiation between buyers and their agents, potentially reducing the seller’s overall commission burden.
2. NAR will create a rule to ensure compensation offers aren’t displayed on the MLS listings. This could encourage transparent and competitive commission discussions.

Are you curious about NAR’s recent year of trouble? Watch our detailed analysis.

Alternatives to Paying Real Estate Commission in Iowa

If you’re looking for an affordable alternative to an agent-assisted sale, here are a few options you can opt for:

• List With a Discount Real Estate Broker: The best discount real estate brokers in Iowa offer all the services that traditional Realtors do but at discounted rates. They usually charge 1.5% to 3% commissions to list your home.
• Sell “For Sale By Owner”: Selling FSBO implies no access to the MLS. You market your property, conduct market research, manage offers and showings, etc., all by yourself.
• Sell to an iBuyer or Cash Buyer: A cash buyer can make a cash offer instantly and help you sell your house fast in Iowa. iBuyers have strict purchase criteria but can make cash offers as high as 80% of the Fair Market Value.
• List Your Home on the MLS for a Flat Fee: Iowa Flat Fee MLS companies get you listed fast, typically within 24 to 48 hours on your local MLS. This is your best chance to get top dollar for your house.

👉 List Your Home Now and Save Thousands on Commissions

What Should You Do Before Paying a Realtor Commission?

To sell your home like a pro, you must master commission negotiation and know what you’re paying for! Use these tips to steer clear of rookie mistakes and keep your sale rolling like a Buckeye on game day.

1. Negotiate Your Fee: Don’t assume the 5% to 6% commission is final. You can negotiate for a lower commission rate.
2. Look Beyond the Commission Rate: Paying a hefty fee doesn’t always mean that you’ll get the best service. You might need to market your property well to make your home sell faster in the current Iowa housing market.
3. Evaluate the Services Included: Some agents might offer fewer services for the same standard commission. Finalize your commission rate after you clarify what their package includes (e.g., home staging, photography, marketing).
4. Widen Your Buyer Pool: Depending on the number of Iowa property listings and market trends, you might have to offer to cover a part of the buyer’s agent fee. This can help you attract a lot of buyers who would need financial assistance for their agent.

How Can You Save on Real Estate Commissions in Iowa?

Real estate agent commissions in Iowa are a steep 5% to 6% of the home sale price. To maximize savings, consider negotiating with your agent.

You can also opt for Flat Fee MLS Listing services like Houzeo. Your home can be on the MLS within 24 to 48 hours. Additionally, your listing will receive maximum exposure via top real estate websites like Trulia, Redfin, and more.

5 Easy Steps to List on MLS

Check out the following video to understand how to list your house on Houzeo and save on commissions.

» Houzeo Reviews: Find out what customers are saying about Houzeo – Iowa’s best home selling website.