Tennessee Real Estate Commissions: What You Can Expect in 2024
When buying or selling a home in Tennessee, grasping real estate commissions is essential for effective budgeting and negotiation. In 2024, new rules altered the way real estate commissions are disclosed across the U.S., offering clearer information for both buyers and sellers. These updates are designed to enhance transparency and help you make more informed choices regarding real estate fees.
Whether you’re a first-time homebuyer or a seasoned seller, this Redfin guide will assist you in understanding Tennessee’s real estate commissions and what to expect in the current market.
Current state of the Tennessee housing market
Before we explore real estate commissions in Tennessee, let’s first examine the state’s housing market.
Median Home Sale Price
$388,900
Housing Supply
39,220 (+21.8% YoY)
Homes Sold Above List Price
16.2% (-5.5 pts YoY)
Understanding real estate commissions in Tennessee
What are real estate commissions?
Real estate commissions are fees paid to agents by homebuyers or sellers for their role in completing a transaction. These fees are settled at closing and are generally calculated as a percentage of the property’s sale price.
Who pays the commission?
Traditionally, sellers were responsible for covering both their own agent’s commission and the buyer’s agent fees from the sale proceeds. However, starting August 17, 2024, buyers must now agree to their agent’s fees in writing before starting home tours.
While buyers can still request that the seller cover their agent’s commission as part of the offer process, this new rule means that the amount a seller might contribute to a buyer’s agent’s fee is negotiable and may vary.
Average real estate commission rates in Tennessee
In Tennessee, commission rates for real estate can vary significantly depending on the details of the transaction and the agreement between the parties. Although there are standard expectations for commission rates, these fees are negotiable, allowing buyers and sellers to collaborate with their agents to establish a fee structure that works best for them.
Factors such as the property’s location, current market conditions, and the services offered by the agent can all affect the final commission. This flexibility allows both parties to discuss and adjust fees to align with their budget and objectives. Below is a detailed overview of example commission rates based on median home prices in some of Tennessee’s largest cities.
City
Median Home Sale Price
1.5% Real Estate Commission
3% Real Estate Commission
5% Real Estate Commission
Nashville
$455,000
$6,825
$13,650
$22,750
Memphis
$174,900
$2,623
$5,247
$8,745
Knoxville
$327,750
$4,916
$9,832
$16,387
At Redfin, we’re dedicated to offering consumers with the best value possible. To support this, we offer sellers a listing fee starting as low as 1%.* For buyers, our fees differ by location, but remain competitive to help ensure your offer stands out and improves your chances of success in the homebuying process.
Can you negotiate real estate commissions in Tennessee?
Absolutely! There are no national laws or regulations setting fixed commission rates, so agents may be open to negotiating lower fees based on the transaction type, required services, and client relationship.
When negotiating commissions, consider the level of service the agent provides, their marketing strategies, and their local market expertise. Sellers may have the opportunity to negotiate lower rates if their property is in high demand or likely to sell quickly. Additionally, if a single agent represents both the buyer and seller, there might be room for further commission reductions since there is no second agent involved.
Tips for a successful negotiation
Compare multiple agents and their commission structures before making a decision.
Discuss performance-based incentives, such as offering a higher commission for a quicker sale or a better final price.
Use your property’s appeal to your advantage, as agents may be willing to accept a lower commission for highly desirable areas.
Tennessee real estate commission FAQs
What are the changes to real estate commission? Two major changes have impacted commission handling. First, buyers must now agree in writing to their agent’s fees before starting home tours. Second, the way these fees are advertised has shifted—in many areas, buyer agent compensation is no longer visible on MLS listings. Learn more about the real estate commission changes here.
How do the changes impact buyers in Tennessee? Buyers are now required to sign an agreement with their agent regarding commission rates before viewing homes. However, you can still request that the seller cover your agent’s fee as part of your offer.
How do the changes impact sellers in Tennessee? Sellers will continue to negotiate with their listing agent about the compensation they will offer to the buyer’s agent, if any. They will review requests and negotiate the terms of the offer.
How do you find a real estate agent in Tennessee? If you’re ready to start buying or selling a home, Redfin is here to assist. Connect with a Redfin agent today.
How can you avoid fees? Selling a home without an agent in Tennessee can save on commission fees, but for sale by owner (FSBO) transactions involve additional effort, including managing marketing, showings, and paperwork.
*Listing fee subject to change, minimums apply. Any buyer’s agent fee the seller chooses to cover not included. Listing fee increased by 1% of sale price if buyer is unrepresented. Sell for a 1% listing fee only if you also buy with Redfin within 365 days of closing on your Redfin listing. We will charge a 1.5% listing fee, then send you a check for the 0.5% difference after you buy your next home with us. Learn more here.
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