South Dakota Real Estate Commissions: What You Can Expect in 2024
Real estate commissions are a crucial aspect of managing costs when buying or selling a home in South Dakota. New rules implemented in 2024 have altered how commissions are disclosed, making it easier for both buyers and sellers to understand fees and negotiate more effectively. These changes aim to bring greater clarity and transparency to real estate transactions.
Whether you’re considering buying your first home, or have sold homes before, this guide will provide key information about real estate commissions in South Dakota.
Current state of the South Dakota housing market
Before getting into commission details, let’s take a quick glance at South Dakota’s current housing market:
| Median Home Sale Price | $321,600 |
| Housing Supply | 4,093 (+12.3% YoY) |
| Homes Sold Above List Price | 16.6% (-8.2 pts YoY) |
Understanding real estate commissions in South Dakota
What are real estate commissions?
Real estate commissions are the fees paid to agents when a home sale is completed. Typically, these fees are calculated as a percentage of the final sale price and are due at closing, serving as payment for the agents’ services throughout the process.
Who pays the commission?
Traditionally, sellers have paid for both their own agent’s fee and the buyer’s agent’s fee. However, following the changes implemented on August 17, 2024, buyers are now required to sign a document specifying their agent’s fee before beginning home tours.
Although buyers can still request that the seller cover their agent’s fee, these changes mean the amount the seller might pay the buyer’s agent, if any, can vary and is entirely negotiable.
Average real estate commission rates in South Dakota
Commission rates can vary depending on the market, location, and property specifics. While there are expectations on commission rates in South Dakota, these fees are always negotiable. Below is a sample of how commissions could look in some of South Dakota’s major cities:
| City | Median Home Sale Price | 1.5% Real Estate Commission | 3% Real Estate Commission | 5% Real Estate Commission |
| Sioux Falls | $320,000 | $4,800 | $9,600 | $16,000 |
| Rapid City | $345,000 | $5,175 | $10,350 | $17,250 |
| Aberdeen | $212,750 | $3,191 | $6,383 | $10,638 |
At Redfin, sellers can benefit from a listing fee as low as 1%*, while buyers enjoy competitive rates depending on their location, which helps their offers stand out and improves their chances in competitive markets.
Can you negotiate real estate commissions in South Dakota?
Absolutely! Commission fees are not set in stone. Both buyers and sellers have the opportunity to negotiate the fee structure, allowing for flexibility based on the situation.
When discussing commissions, consider the range of services provided by the agent, such as their marketing strategy and local knowledge, which could justify different commission rates.
Properties that are highly desirable or expected to sell quickly often provide more room for negotiation. Additionally, if a single agent represents both the buyer and the seller in a dual agency, it might be possible to reduce the overall commission costs further.
Tips for a successful negotiation
- Interview multiple agents to compare their services and rates.
- Offer performance-based incentives, such as a higher commission for achieving a faster sale or exceeding the expected sale price.
- Leverage the appeal of your property, especially if it’s in a sought-after area, to encourage agents to reduce their fees.
South Dakota real estate commission FAQs
What are the changes to real estate commission? Two major changes were introduced: first, buyers must now agree to their agent’s fee in writing before viewing any homes. Second, in many markets, buyer agent commissions are no longer visible on MLS listings. Learn more about the real estate commission changes here.
How do the changes impact buyers in South Dakota? Buyers are required to sign an agreement outlining their agent’s commission before they begin touring homes. However, it’s still possible to negotiate with sellers to cover this fee during the offer process.
How do the changes impact sellers in South Dakota? Sellers continue to collaborate with their listing agent to determine if and how much they will contribute toward the buyer’s agent’s fee. Sellers should be ready to negotiate these terms with prospective buyers.
How do you find a real estate agent in South Dakota? When you’re ready to buy or sell in South Dakota, connect with a Redfin agent for expert guidance through every step of the process.
How can you avoid fees? One way to avoid real estate commission fees is by opting for a For Sale By Owner (FSBO) approach. However, this requires you to handle all aspects of the sale, including marketing, showings, and managing the legal documents—tasks that can be difficult without professional assistance.
*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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