Understanding Realtor Commissions and Fees in Pennsylvania

By Ciprian Morariu Published: April 23, 2024

Realtor Commissions and Fees in Pennsylvania

Whether you are buying or selling a home in Pennsylvania, you are going to be a part of a major financial decision. 

It involves going through a list of paperwork, and documentation while incurring a variety of charges and costs too. 

One such expense is the realtor fees in PA which is the cost homeowners and buyers incur to pay for the services offered by a realtor. 

A realtor is a professional who has a real estate license in Pennsylvania and is hired by a seller or a buyer to help them in the sale, purchase, or leasing of real estate. To get a license, it is essential to go through a Pennsylvania online real estate license course and pass the licensing exam. The coursework may be completed in a classroom environment too.  

Realtors guide their clients through the process of buying and selling a commercial or residential property. Realtors work with clients to learn about their needs, preferences, and priorities and based on these inputs, assist them in making the right real estate decisions.

Due to their industry knowledge, network, and expertise, realtors are highly sought after to partake in real estate transactions. 

Did you know that the average annual salary of a realtor is around $70K? Imagine being able to earn a six-figure salary within a few years and carving a successful career path for yourself.  

If you are a salesperson or broker in Pennsylvania and are considering upgrading your career to become a realtor, this article will help you make an informed decision. 

In this article, we will give you a detailed look into how much a realtor can earn in PA and what are the general commission structures. 

You will also learn about the licensing requirements and other important information on working as a realtor.

How much commission does a realtor make in PA?

Factors that Affect Realtor Commissions in Pennsylvania

Earning a commission on top of getting your fee does seem like a great way to earn extra income. However, one must be aware of the different factors which might affect your earnings. 

Let’s take a look at some of the factors affecting your final Pennsylvania real estate commission rates:

  • Experience Level of Realtor
  • State and Neighborhood
  • Type of Property

Every realtor gets the opportunity to earn a fixed commission as part of a real estate deal. 

However, the exact commission amount depends on the state, city, neighborhood, and the overall demand and supply within the location. 

Additionally, the commission also varies depending on specifics such as the type of property, size, and overall condition.  

Further, if you are working with a real estate firm, the commission structure you earn will also be based on the commission split structure of your firm. 

Typical range of realtor commissions in Pennsylvania

When you think about what the average real estate commission in Pennsylvania, you can find varying answers depending on who you ask. 

However, to give you a more accurate and objective picture of reality, we have researched the latest market data and industry insights. 

Based on the research, in the current market, the average real estate market commission for realtors is around 5.5% in PA. 

This includes a 50-50 commission split between the buyer and the seller i.e. both the buyer and the seller contribute 2.25% of their share to make the total realtor commission. 

Typically, the commission ranges between 4 to 6 percent of the selling price of the property. 

Commission structure for buying and selling real estate in Pennsylvania

In Pennsylvania, the realtor commission is calculated on a percentage basis of the final selling price of the property. 

In Pennsylvania, a realtor can make around 5.4 to 5.5% of the typical home price between the range of $200K to $300K. 

A realtor in PA is hired to provide a range of services and expertise while helping their client navigate through the real estate deal. 

Typically, a realtor’s commission is paid by the seller of the property, i.e. the individual who owns the real estate and is interested in transferring the legal ownership rights of their property to an interested buyer. 

The commission of a realtor is split between the seller’s agent and the buyer’s agent.

Here’s how it works - the seller signs a listing document which is a legal agreement with the realtor and they agree on a fixed commission to be paid as part of the deal. 

This commission is paid to the realtor by the seller after the transaction is completed. 

The final amount will be split between the cooperating brokers i.e. the seller’s agent and the buyer’s agent. 

Let us take an example to better understand how the commission structure works in PA. 

Imagine you are a homeowner interested in selling your property for a sum of $300K. As per the market rate, you have decided on a 5% commission to be paid in exchange for the realtors’ services. 

In this case, the commission amount, which translates roughly into $15K will be equally split between the listing brokerage (or the seller’s agent) and the buyer’s brokerage (or the buyer’s agent). 

Thus, both agents will get $7.5K equally after the transaction is completed.  

In case you are wondering what exactly does the real estate fees and commission covers, here’s a salient list of some of the key actionable: 

  • Researching about potential buyers in an area
  • Establishing a fair market value of the property
  • Hosting open houses and property showings
  • Promoting the property for sale through advertisements

Many homeowners wonder if paying the realtor fees in PA is worth it or not. 

Choosing the services of a realtor is not mandatory, but as you can see it definitely helps to have an expert by your side. 

What is the average real estate commission?

National average real estate commission

Industry estimates and market research indicate that the current national average commission rate is around $5.49%, which is divided equally between the seller’s agent and the buyer’s agent. 

This means if the average selling price of a home in the US is estimated to be $150K, a realtor can earn a commission of around $8K on every transaction they help close. 

Yes, selling a home is possible without the involvement of a realtor, however, most homeowners prefer to pay the commission in exchange for professional services and expertise. 

Realtors are experienced professionals who provide an array of valuable services to their clients. 

This helps sellers find buyers quickly and get the best value for their property without having to manage everything on their own. 

Depending on the state, neighborhood, property type, and the realtor’s experience level, the national commission for a realtor varies between 4.5% to 6.7%. 

Average real estate commission in Pennsylvania

Let’s look into the nitty gritty of how much commission does a realtor make in PA and compare it with the national average. 

Based on a recent realtor's survey and industry research, the state's commission rate is expected to be anywhere between 5 to 6 percent on the selling price of the property. 

For example - if you consider the average selling price of a PA home to be at $265K, then the realtors’ commission comes down to around $15K. 

The Pennsylvania Real Estate Commission

Role and responsibilities of the Pennsylvania Real Estate Commission

If you are an aspiring real estate salesperson, broker, or realtor residing in Pennsylvania, then it is important to learn about the Pennsylvania Real Estate Commission. 

The Pennsylvania Real Estate Commission (PREC) is the state’s leading real estate authority and governing body for real estate professionals, activities, and transactions. 

It comprises the following members: 

  • 6 real estate brokers
  • 3 members of the public
  • 1 member for consumer protection
  • 1 real estate commissioner

The Pennsylvania Real Estate Commission is primarily responsible for establishing the laws, and regulations and formulating the guidelines for real estate professionals operating in the state. 

It is also responsible for issuing and renewing the licenses for the following: 

  • Real Estate Agents
  • Real Estate Brokers
  • Real Estate Realtors
  • Real Estate Inspectors
  • Real Estate Appraisers
  • Real Estate Education Providers

The Pennsylvania Real Estate Commission establishes and administers the pre-licensing, post-licensing, and continuing education requirements for PA residents. 

PREC has an additional responsibility to protect the rights and interests of consumers in a real estate transaction. 

It also aims to promote ethical, fair, and transparent practices in the real estate industry. 

The Pennsylvania Real Estate Commission is in charge of receiving, investigating, and resolving consumer complaints in matters of real estate transactions. 

It is Pennsylvania's highest jurisdiction for real estate disputes, court cases, and consumer complaints. 

However, the commission is not authorized to provide any legal counsel or advice to the consumers.  

Licensing requirements for real estate agents in Pennsylvania

The Pennsylvania Real Estate Commission (PREC) establishes and formulates the licensing requirements for aspiring real estate professionals in the PA. 

According to the PREC, to obtain a real estate license in PA, one must meet the standards of good reputation, honesty, integrity, trustworthiness, and competence. 

Let us take a closer look at the eligibility requirements for obtaining a PA real estate license.

Firstly, you must meet the basic eligibility criteria as established by the PREC, according to which every applicant must be:

  • 18 years of age or older
  • Be a US citizen or a lawfully admitted alien
  • Have a high school graduation or equivalent education

Secondly, there are additional eligibility requirements that must be fulfilled by every applicant. 

The most important of them all is completing the mandatory pre-licensing education from a state-approved college or course provider. 

According to the Pennsylvania Real Estate Commission (PREC), you must complete 75 hours of pre-licensing coursework as part of your real estate education. 

The coursework includes 45 hours of real estate training along with 30 hours of real estate license fundamentals. 

After you have completed the pre-licensing education, you will be eligible to take the PA state licensing exam. 

To obtain a state approved license, every applicant must take and clear the licensing exam by scoring at least 75% or higher on the final test.  

The exam consists of a total of 120 questions which are a mix of national and state-specific sections. 

To complete the exam, you will be given 150 minutes for the national section and 60 minutes for the state section. 

Regulation and oversight of real estate transactions in Pennsylvania

The Pennsylvania Real Estate Commission (PREC) is the state’s official authority which oversees and regulates the functioning of the industry. 

PREC is in charge of establishing and enforcing the rules, regulations, and guidelines for real estate education, licensing, and practice. 

It is responsible for issuing, updating, and renewing the licensure of all active real estate professionals.