When exploring the housing market in Rhode Island, having a good grasp of how real estate commissions function is crucial. Recent changes implemented nationwide in 2024 have enhanced transparency, aiding both buyers and sellers in understanding the associated costs better. These updates are aimed at simplifying transactions, enabling all parties involved to make more informed financial decisions.
Whether you’re new to the real estate scene in Rhode Island or have experience with property sales, this guide will provide insights into commission structures in today’s market, ensuring you are well-informed.
Current state of the Rhode Island housing market
Before delving into the specifics of real estate commissions, it is essential to understand the current housing market in Rhode Island:
| Median Home Sale Price | $512,300 |
| Housing Supply | 3,024 (+11.7% YoY) |
| Homes Sold Above List Price | 52.8% (-5.8 pts YoY) |
Understanding real estate commissions in Rhode Island
What are real estate commissions?
Real estate commissions are the fees paid to agents for their role in facilitating the purchase or sale of a home. These fees, typically calculated as a percentage of the sale price, are settled during the closing process.
Who pays the commission?
Traditionally, the seller covers the commission fees for both their agent and the buyer’s agent, paid from the proceeds of the sale. However, starting August 17, 2024, Rhode Island buyers must sign an agreement outlining their agent’s commission before commencing property tours.
While buyers can negotiate for sellers to contribute to their agent’s fee as part of the offer, this is not guaranteed—the final arrangement depends on negotiation.
Average real estate commission rates in Rhode Island
Rhode Island does not have fixed commission rates. These rates are influenced by factors such as the property’s location, current market conditions, and the services provided by the agent. Both buyers and sellers have the flexibility to negotiate terms that suit their requirements.
Here’s a breakdown of example commission costs in some of Rhode Island’s major cities:
| City | Median Home Sale Price | 1.5% Real Estate Commission | 3% Real Estate Commission | 5% Real Estate Commission |
| Providence | $483,840 | $7,257 | $14,515 | $24,192 |
| Cranston | $444,950 | $6,674 | $13,349 | $22,248 |
| Warwick | $415,000 | $6,225 | $12,450 | $20,750 |
At Redfin, our aim is to provide exceptional value to our clients. That’s why we offer sellers a listing fee starting at just 1%*. For buyers, our commission rates vary by region but are always competitive, making your offer more appealing.
Can you negotiate real estate commissions in Rhode Island?
Yes, commissions in Rhode Island are entirely negotiable. There are no set rates regulated, allowing both parties to agree on a commission structure that suits them. Various factors, such as the agent’s experience, property location, and market trends, influence the final rate. Furthermore, if one agent represents both the buyer and seller (dual agency), this could lead to further commission reductions.
Tips for a successful negotiation
- Consult with multiple agents: Speak with several agents to compare their services and commission rates.
- Incentive structures: Consider offering performance-based bonuses for quicker sales or higher-than-expected sale prices.
- Highlight property strengths: If your home is in a high-demand area, you may have more leverage to negotiate lower commissions.
Rhode Island real estate commission FAQs
What are the changes to real estate commission? Buyers now need to agree on their agent’s fee in writing before starting property tours. Additionally, in some markets, the buyer’s agent’s compensation may no longer be visible on MLS listings. Learn more about the real estate commission changes here.
How do the changes impact buyers in Rhode Island? Buyers must sign off on their agent’s commission before they begin touring homes, though they can still request that the seller contribute toward this fee during negotiations.
How do the changes impact sellers in Rhode Island? Sellers continue to work with their listing agent to negotiate how much, if any, commission will be offered to the buyer’s agent. This can be influenced by the offer they receive and other factors.
How do you find a real estate agent in Rhode Island? If you’re looking to buy or sell a home in Rhode Island, Redfin is ready to help. Reach out to a local Redfin agent today to get started.
How can you avoid fees? If you’re looking to save on commission fees, you might consider selling your property yourself through the for-sale-by-owner (FSBO) approach. However, this means handling everything yourself—from marketing and showings to paperwork and negotiations.
*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.