A recent home seller in Texas thought the new commission rules would save her money. Instead, her agent left three cookies on the kitchen counter during every showing.
Turns out, that was code for a 3% commission rate.
Before diving into how some agents are skirting new regulations, it’s essential to understand how real estate commission actually works. The real estate agent commission is typically a percentage of the home’s final sale price, traditionally ranging from 5% to 6% of the total transaction value. This real estate commission is usually split between two parties: the listing agent (who represents the seller) and the buyer’s agent (who represents the buyer).
Here’s how the traditional commission structure works: When a seller lists their home, they agree to pay a total commission, let’s say 6%, which gets divided. The listing agent and their broker typically receive 3%, while the buyer’s agent and their broker receive the other 3%. This means on a $400,000 home sale, the total agent commissions would be $24,000, with $12,000 going to each side.
However, the buyer traditionally didn’t pay their agent directly. Instead, the seller covered both sides of the commission at closing. This arrangement has been standard practice for decades, but the recent settlement aimed to change how these agent fees are structured and disclosed.
The landmark 2023 settlement fundamentally altered how real estate agent commission works in America. The rules changed to increase transparency and give both buyer and seller more control over what they pay. Under the new guidelines, agents must be more explicit about their compensation, and buyers may need to negotiate and potentially pay their own agent directly rather than having the seller automatically cover both sides.
The settlement required that agent gets paid structures be clearly disclosed upfront, with written agreements established before property tours even begin. This transparency was designed to help consumers understand exactly what they’re paying for and to encourage competitive pricing among agents. The average real estate agent commission was expected to drop as a result, potentially saving American homebuyers and sellers billions of dollars annually.
The changes also meant that a new agent entering the industry would need to be more competitive with their pricing, and established agents could no longer rely on the traditional 3% commission fees being automatically accepted. This new real estate market environment requires agents to demonstrate their value and justify their real estate agent fees based on actual services provided. The new real estate commission landscape favors transparency over tradition, and both new real estate agents and experienced professionals must adapt to these evolving consumer expectations. Understanding the new real estate commission rules is essential for anyone entering the market as either buyer, seller, or agent.
Despite these reforms, a recent New York Times report reveals how some clever real estate agents are dodging the landmark settlement aimed at lowering commissions. While the changes were supposed to bring transparency and savings, many clever real estate professionals have developed creative ways to maintain their higher fees and ensure they’re still paid at traditional rates. These clever real estate tactics undermine consumer protections, and understanding these clever real estate workarounds helps you avoid agents who prioritize their commissions over your interests.
These workarounds include:
The resistance means many buyers and sellers aren’t seeing the expected savings from the settlement. Some buyers report that when they try to negotiate lower rates, agents become less responsive or suddenly “unavailable” to show properties. Sellers who list at lower commission rates sometimes find fewer agents willing to show their homes to potential buyers.
To understand why these workarounds matter, let’s break down exactly how real estate commission works in a typical transaction. When a seller decides to list their property, they interview agents and agree to a listing commission rate. The listing agent markets the property, hosts showings, negotiates offers, and guides the seller through closing.
On the buyer’s side, the buyer’s agent helps identify properties, schedules tours, submits offers, negotiates terms, and manages the purchase process. Historically, both agents expected to receive roughly equal compensation, usually around 2.5% to 3% each. Understanding how real estate agents get paid is crucial to evaluating whether commission rates are fair.
Here’s where it gets complicated: Real estate agents get paid only when a transaction closes, no sale means no commission, which is why agents are highly motivated to close deals. This is a key aspect of how real estate agents get paid that differs from salaried professions. The broker who employs the agent also takes a cut, often 20% to 50% of the agent’s commission, depending on the agent’s experience and brokerage agreement. So when you understand how real estate agents get paid, you realize they’re splitting their earnings with their brokerage, which affects their net compensation and negotiating flexibility.
For example, on a $500,000 home with a 6% total commission:
Understanding this structure helps explain why some agents resist the new transparency requirements. Lower commission rates directly impact their income, especially for newer agents who may already be splitting a larger percentage with their broker.
For buyers, these tactics create confusion and can cost thousands of dollars. Under the new rules, buyers should have the power to negotiate their agent’s commission and potentially shop around for better rates. However, when agents use coded signals or pressure tactics, buyers lose this negotiating power.
Many buyers have reported similar experiences where agents quoted one rate initially, then tried to add “processing fees” or other charges at closing. Some buyers discovered that their agent had communicated a higher commission rate to the listing agent through subtle signals during showings, effectively committing the buyer to pay more than agreed.
Smart buyers are now asking explicit questions upfront:
These questions force transparency and help buyers avoid agents who rely on workarounds to inflate their fees.
For sellers, the new landscape is equally challenging. While you’re no longer automatically expected to pay both sides of the transaction, some listing agents still build in assumptions about buyer’s agent commissions without discussing alternatives with sellers.
A savvy seller should ask their listing agent:
Some sellers are discovering that offering a lower buyer’s agent commission (say 2% instead of 3%) can work in competitive markets where buyers are motivated, but might reduce showings in slower markets. A transparent listing agent will negotiate this strategy with you based on current market conditions, not just push for the highest possible commission.
Be cautious if your agent:
Avoids direct questions about commission rates: They should give you a clear, straightforward answer immediately. Any hesitation or vague language suggests they’re not operating transparently under the new rules.
Mentions unnecessary services: Some agents pad their fees with services you don’t need, like “professional staging consultation” or “digital marketing premium packages” that are really just standard industry practices.
Uses confusing industry terms: Good agents explain things in plain English. If your agent constantly references obscure terminology without explaining what it means for your wallet, they may be deliberately creating confusion.
Pressures you to sign quickly: Take time to understand all costs and services. An agent who says “we need to lock this in today” or “this rate is only available if you sign now” is using sales tactics, not professional guidance.
Gets defensive when you ask about fees: A professional agent welcomes questions about their compensation structure. Defensiveness or irritation signals that they’re not comfortable with transparency.
Refuses to provide written commission agreements: Under the new rules, written agreements are required. Any agent who tries to proceed without proper documentation is violating the settlement terms.
The best real estate agents will negotiate fairly and advocate for your financial interests. They understand that your savings matter more than their commission padding. These professionals demonstrate their value through expertise, market knowledge, and client service, not through coded signals or hidden fees.
When interviewing potential agents, look for these green flags:
Our agent finder service connects you with pre-screened professionals who prioritize transparency. These agents have proven track records of putting clients first, not commission tricks. Each agent in our network has agreed to clear fee disclosures and ethical practices that align with the spirit of the new commission regulations.
A critical distinction many consumers miss is the difference between an agent and a real estate broker. Every agent must work under a licensed broker who oversees their transactions and ensures regulatory compliance. The broker takes a portion of each agent’s commission, which is why agents are motivated to close deals at higher commission rates.
However, brokerage models vary significantly. Traditional brokerages typically provide office space, administrative support, and marketing resources in exchange for a larger split of the agent’s earnings. The buyer agent or listing agent working for these firms might split 50% to 70% of their commission with the broker, which affects how flexible they can be on rates.
Alternative brokerages like Redfin have disrupted this model by offering lower commission rates or flat fees, often 1% to 1.5% for listing services compared to the traditional agent rate of 2.5% to 3%. Some discount brokerages offer rates or flat fees like $3,000 for basic listing services, which can save sellers significant money on higher-priced homes compared to working with a traditional agent. Redfin accomplishes this through technology integration and salaried agents rather than the commission-only compensation model used by most traditional agent brokerages. A buyer or seller working with Redfin or other agents offering competitive rates or flat fees might save thousands compared to a traditional agent, though some argue the service level differs from traditional full-service agents. The choice between a traditional agent and a discount brokerage depends on your specific needs and comfort level with technology-driven services.
The agent could argue that their higher commission justifies premium service, but consumers should evaluate whether those services truly match the price difference. An agent represents either the buyer’s or seller’s interests, and their brokerage affiliation shouldn’t prevent them from negotiating fair rates.
The Multiple Listing Service (MLS) has historically been central to how commission information is shared among agents. When selling a home, the listing agent enters the property into the MLS database along with details about the offered buyer’s agent commission. This system allowed buyer agents to quickly see which listings offered favorable compensation, potentially influencing which homes they showed clients.
The new transparency rules fundamentally changed how MLS systems display commission information. Rather than prominently featuring commission offers, MLS platforms now provide this information in less emphasized ways, and in some markets, the commission with the listing cannot be advertised at all until a buyer’s agent and buyer have established a written agreement.
This shift was designed to prevent buyer’s agents from steering clients toward homes offering higher commissions. In theory, agents should now show homes based purely on client needs and preferences, not potential payment. However, the cookie codes and subtle signals described earlier suggest some agents have found workarounds to continue commission-based steering despite MLS changes.
An informed seller and buyer should ask their agents directly about MLS listing strategies and commission disclosure rather than assuming the platform handles everything transparently.
One commission-related issue that predates the 2023 settlement is dual agency, when the same real estate agent’s represents both buyer and seller in a transaction. While legal in many states, dual agency creates inherent conflicts of interest regarding commission negotiations.
In a dual agency situation, the agent or brokerage receives the full commission from both sides, potentially 5% to 6% of the purchase price. This financial incentive can compromise the agent’s ability to negotiate fairly for either party. How can an agent represents a buyer seeking the lowest price while simultaneously representing a seller seeking the highest price?
The terms of an agent’s commission become even more problematic in dual agency scenarios. The agent might discourage a buyer from negotiating a lower purchase price because it directly reduces their own compensation. Similarly, they might discourage a seller from making concessions that would benefit the buyer but reduce the final sale price and commission.
Many consumer advocates argue that dual agency should be prohibited entirely, while others say it can work with proper disclosure and consent. Regardless, a buyer or seller should be extremely cautious about dual agency arrangements and consider working with separate agents who can negotiate independently for their respective interests.
If you’re selling a home and your agent brings a buyer client to the table, ask explicitly: “Are you planning to represent both parties? How does that affect your commission? Can you truly negotiate the best terms for me while also representing the buyer?”
An often-overlooked aspect of real estate agent’s commission is how it interacts with mortgage financing. While the commission itself isn’t typically financed through the buyer’s mortgage, understanding this connection helps consumers make better decisions.
For buyers, the commission paid to your buyer agent ultimately comes from the proceeds of the sale, money that could otherwise reduce the price you pay for the home. When a seller agrees to cover a 3% buyer’s agent commission, that cost is effectively built into the listing price. If you negotiate that commission down to 2%, you might be able to negotiate a lower purchase price as well, which means borrowing less through your mortgage.
Consider this example: On a $500,000 home purchase with a 3% buyer agent commission ($15,000), if you negotiate that down to 2% ($10,000) and the seller passes half those savings to you through a $2,500 price reduction, you’re now purchasing at $497,500. Over a 30-year mortgage, that $2,500 principal reduction saves you approximately $4,700 in interest (assuming a 6.5% rate), nearly doubling your initial savings.
For sellers selling a home, understanding how paying commission affects your net proceeds helps you price competitively. If you’re netting $350,000 after a 6% commission on a $400,000 sale, consider whether offering a 5% total commission might attract more buyers or allow you to price at $395,000 while netting the same amount. Your listing agent should help you model these scenarios.
Some agent could discourage these conversations because lower commissions mean less compensation for them. But a professional real estate agent’s should be transparent about how fees work and help you optimize your financial outcome, not just their commission check.
The average commission varies significantly based on geography, property type, and market conditions. According to 2025 industry data, commissions usually total between 4% and 6% depending on location and property type:
When commissions usually total 5% to 6%, that amount is split between listing and buying sides, with each agent typically receiving 2.5% to 3%before broker splits. Understanding that commissions usually total these amounts helps you evaluate whether a quoted rate is competitive or inflated.
The average real estate agent’s commission per side (listing or buyer agent) typically ranges from 2% to 2.75%, down from the traditional 2.5% to 3% before the settlement. However, these averages mask significant variation. Some agents still command 3% or higher, while discount brokers like Redfin offer 1% to 1.5%.
Understanding your local market’s average commission provides leverage when negotiating. If agents in your area typically charge 2.5% per side but an agent quotes 3%, you have data to support a counteroffer. Conversely, an agent charging 2% might be offering a true discount or might be providing fewer services, ask specific questions to understand the difference.
With the settlement’s impact still unfolding, the average real estate agent commission is becoming more variable across different markets. In high-competition areas, some agents are accepting 2% to 2.5% commission rates, while in slower markets, traditional 3% rates remain common.
According to recent industry data, the total commission (both sides combined) has dropped from the traditional 5% to 6% down to an average of 4.5% to 5.5% in many markets. However, this varies significantly based on:
Buyers and sellers should research typical real estate agent fees in their specific market rather than assuming national averages apply. What’s considered competitive in Manhattan differs significantly from what’s standard in smaller Midwestern cities.
Some sellers, frustrated by high commission rates, consider a sale by owner (FSBO) approach to avoid paying agents entirely. In a FSBO transaction, the seller handles all aspects of marketing, showings, negotiations, and paperwork without professional representation. While this eliminates the seller’s agent commission, it comes with significant challenges.
First, FSBO properties often sell for less than agent-listed homes, with studies showing a 5% to 10% lower home price on average. This price difference can exceed what you would have paid in commissions. Second, without MLS access, FSBO listings reach fewer potential buyers, extending time on market and increasing holding costs.
Third, when a buyer with a buyer’s agent wants to tour homes including your FSBO property, you’ll still need to negotiate that agent’s commission. Many FSBO sellers end up paying a buyer’s agent 2.5% to 3% anyway, eliminating much of the anticipated savings. An experienced agent may negotiate better terms than you can achieve on your own, and an agent would handle the complex paperwork that often trips up FSBO sellers.
If you’re considering FSBO to save money, compare the true net proceeds after accounting for potentially lower sale prices, longer marketing time, and buyer’s agent commissions you’ll likely still pay. For many sellers looking to sell your home, working with a competent listing agent at a negotiated commission rate of 2% to 2.5% delivers better financial outcomes than going it alone.
Understanding how an agent earns their commission helps explain why some resist the new transparency rules. Real estate is a high-risk, low-probability profession where agents invest significant time and money with no guarantee of payment.
A typical buyer’s agent might work with a client for three to six months, spending 40 to 60 hours to tour homes, research properties, prepare offers, and negotiate terms, all before earning a dollar. If the buyer decides not to purchase, changes agents, or can’t secure financing, that agent’s time investment yields zero compensation. Industry data shows agents close only 30% to 40% of the clients they work with, meaning substantial unpaid work is built into the profession.
Similarly, a listing agent’s must invest in professional photography, staging consultation, marketing materials, and open house time before the home sells. If a seller’s property doesn’t sell or the seller cancels the listing, the agent typically receives nothing despite these expenses.
This risk structure explains why agents have historically protected commission rates aggressively. However, it doesn’t justify the coded workarounds that undermine consumer transparency. An agent may argue they need higher commissions to offset unsuccessful deals, but the proper response is to clearly communicate their value and negotiate openly with clients, not to use cookie codes and subtle signals.
When you buy a home, you’re entitled to understand exactly what your agent earns and why that compensation is justified by their service level. The terms of an agent’s commission have always been negotiable, even before the 2023 settlement, many consumers simply didn’t realize this. An agent won’t always volunteer that their rate is flexible, but asking directly can lead to meaningful savings.
The key is distinguishing between agents who earn their commission through expertise, market knowledge, and negotiation skill versus those who rely on information asymmetry and hidden fee structures. The former deserve fair compensation; the latter should be avoided.
Understanding how commission fees affect your bottom line helps you make informed decisions. For a buyer, even a 0.5% difference in the buyer’s agent commission on a $400,000 home means $2,000, money that could go toward closing costs, furniture, or emergency repairs. The buyer’s agent commission directly impacts your purchasing power.
For the seller’s benefit, negotiating the listing agent’s commission from 3% to 2.5% on that same $400,000 home saves $2,000. The seller’s net proceeds improve significantly when commission rates are negotiated. If you also reduce the buyer’s agent commission from 3% to 2.5%, the seller’s total savings reach $4,000, a meaningful amount that stays in your pocket. Each agent’s commission percentage matters, so understanding the real estate agent’s commission structure is critical.
These aren’t trivial amounts. For many families, these savings represent significant financial flexibility during an already expensive transaction. This is precisely why the settlement aimed to introduce more competition and transparency into commission structures. Every dollar saved on commissions is a dollar you can invest elsewhere in expenses related to real estate, from home inspections and appraisals to moving costs and immediate repairs.
Understanding the full scope of costs related to real estate transactions helps you prioritize where to negotiate. While commission is often the largest negotiable fee, don’t overlook other expenses related to real estate purchases like title insurance, escrow fees, and closing costs. An agent who helps you understand all costs related to real estate transactions demonstrates genuine client advocacy, not just commission protection.
To illustrate how these principles work in practice, consider these real scenarios from recent transactions:
Example 1: The First-Time Buyer Sarah was purchasing her first home at $350,000. Her buyer agent initially quoted a 3% commission ($10,500). After learning about the new transparency rules, Sarah asked whether that rate was negotiable. The agent agreed to 2.5% ($8,750), saving Sarah $1,750, money she used toward her emergency home repair fund.
Example 2: The Savvy Seller Michael listed his $600,000 home and interviewed three agents. Agent A wanted 3% ($18,000), Agent B wanted 2.5% ($15,000), and Agent C wanted 2% ($12,000) but with limited services. Michael chose Agent B, who provided full-service marketing at a competitive rate. He also negotiated to offer buyers agents 2.5% rather than the traditional 3%, saving an additional $3,000 while still attracting buyer interest.
Example 3: The Investor Jennifer purchases multiple properties annually. She established a standing agreement with her buyer agent for a flat $5,000 per transaction regardless of purchase price. On her recent $750,000 acquisition, this saved her over $13,000 compared to a traditional 2.5% commission. Her volume business justifies this arrangement, and her agent appreciates the predictable income stream.
These examples demonstrate that commission negotiation isn’t about being cheap, it’s about establishing fair compensation for services rendered. Each buyer and seller achieved savings while maintaining professional relationships with their agents.
Many consumers feel uncomfortable discussing money with their agents. Here’s a framework for productive commission conversations:
Start with Questions:
Express Your Perspective:
Propose Alternatives:
Evaluate Responses: An agent’s response to these questions tells you a lot about their approach. A professional will engage thoughtfully with your questions. An agent who becomes defensive, dismissive, or uses pressure tactics isn’t prioritizing your interests.
The commission landscape will continue evolving beyond the 2023 settlement. Several trends are emerging:
Increased Transparency: More buyers and sellers are researching commission rates before engaging agents, forcing greater disclosure and competition.
Unbundled Services: Some brokerages now offer à la carte pricing where you pay separately for listing, marketing, negotiation, and closing services based on what you actually need.
Technology Disruption: Platforms like Redfin, Zillow, and emerging AI-powered services are creating downward pressure on commission rates by automating aspects of the transaction process.
Regional Variation: Commission rates are becoming more geographically diverse, with high-cost coastal markets seeing lower percentages while smaller markets maintain higher rates.
Performance-Based Models: Some agents are experimenting with lower base commissions supplemented by bonuses if they exceed certain sale price targets or timeline goals.
These innovations benefit consumers by creating more options and competitive pressure. However, they also require consumers to be more educated and engaged in understanding what they’re paying for.
Before entering into any agreement with a real estate agent, ask these specific questions to ensure complete transparency:
About Commission Structure:
About Services Included:
About Compensation Transparency:
About Flexibility:
An agent who answers these questions directly and comfortably demonstrates transparency. An agent who hedges, avoids specifics, or becomes defensive should raise concerns about their commitment to ethical practices.
Beyond the cookie codes and movie references described earlier, watch for these additional warning signs:
The Vague Fee Structure: “We’ll discuss commission once we find the right property” or “My rate depends on various factors” without specifying what those factors are.
The Bundle Trap: “My commission includes premium services” that you didn’t ask for and don’t need, like daily social media posts for a property that will likely sell in days.
The Comparison Dodge: When you ask how their rate compares to other agents, they respond with “You get what you pay for” rather than acknowledging competitive rates.
The Loyalty Test: “If you’re serious about working with me, you won’t question my commission” treats reasonable negotiation as a character flaw.
The Market Excuse: “In this market, 3% is standard and non-negotiable” ignores the reality that commissions have always been negotiable regardless of market conditions.
The Timeline Pressure: “I have another client interested in working with me at my full rate, so I need your decision today” uses artificial scarcity to prevent you from shopping around.
The Partial Disclosure: Revealing the commission percentage but not discussing the broker split, team splits, or how much the agent actually nets, information that could inform negotiations.
If you encounter any of these red flags, seriously consider working with a different agent. These tactics indicate an agent more focused on maximizing their compensation than serving your interests.
Real estate commissions have always been negotiable, despite decades of industry practices that made them seem fixed. The 2023 settlement simply codified this reality and required greater transparency. Agents who resist through workarounds like cookie codes aren’t protecting their livelihoods, they’re protecting an outdated system that overcharges consumers.
As a buyer or seller, you have both the right and the responsibility to understand exactly what you’re paying for. Don’t let complicated jargon, subtle signals, or pressure tactics prevent you from negotiating fair compensation. The agents who thrive in this new environment will be those who embrace transparency and compete on value, not those who engineer clever workarounds to maintain artificially high fees.
Your real estate transaction likely represents one of the largest financial decisions of your life. Every percentage point of commission matters. By staying informed, asking direct questions, and refusing to accept vague answers, you protect yourself from commission games and ensure your agent truly advocates for your interests.
Use this checklist when interviewing and hiring real estate agents to ensure commission transparency:
Before First Meeting:
During Agent Interviews:
Before Signing Agreements:
During the Transaction:
After Closing:
This systematic approach protects you from commission games and ensures you receive the service and transparency you’re paying for.
If you encounter agents using workarounds like cookie codes or other deceptive commission practices, you have recourse. Every state has a real estate regulatory board that investigates consumer complaints about agent conduct.
Filing a complaint serves multiple purposes:
Most state boards provide online complaint forms and investigate allegations of deceptive practices, failure to disclose compensation, steering based on commission, and violations of the settlement terms. Don’t hesitate to use this resource if an agent’s commission practices seem unethical or deceptive.
The cookie codes and commission workarounds described in this article shouldn’t discourage you from working with real estate agents, they should empower you to choose wisely. Most agents are ethical professionals who will embrace transparency and negotiate fairly. The workarounds represent a minority resisting inevitable industry evolution.
By understanding commission structures, asking direct questions, negotiating confidently, and refusing to tolerate deceptive practices, you take control of one of the largest expenses in your real estate transaction. The money you save through informed commission negotiation can make a meaningful difference in your financial situation, whether that’s a larger down payment, better mortgage terms, or simply more cash in your pocket after closing.
The 2023 settlement aimed to level the playing field between consumers and agents. While some agents resist through creative workarounds, educated consumers can ensure these reforms deliver their intended benefits. Your next real estate transaction can be both successful and financially optimized if you partner with an agent who values transparency over tradition.
When you pay a commission, understanding where that money goes helps explain why negotiation matters. Let’s break down a typical $18,000 commission (3% on a $600,000 home):
Initial Split:
Broker Split (assuming 30%):
Additional Deductions:
Agent’s Actual Net:
This breakdown shows that agents aren’t pocketing the full percentage you pay, but that doesn’t mean you shouldn’t negotiate. An agent working on volume can afford lower percentages, and brokerages competing for business often reduce their splits to attract top producers who can negotiate competitive rates with clients.
Different property types warrant different commission discussions:
Single-Family Homes ($200K-$500K): Traditional 2.5-3% per side is common, but in hot markets, 2-2.5% is increasingly standard. These properties typically sell quickly with standard marketing, so lower commissions are easier to justify.
Luxury Properties ($1M+): While percentages might be lower (1.5-2.5% per side), the dollar amounts remain substantial. Luxury properties require specialized marketing and longer timelines, so agents can justify their expertise even at lower percentage rates.
Condos and Townhomes: These often involve less marketing complexity and may warrant 2-2.5% commissions. The building amenities sell themselves, reducing the agent’s promotional burden.
Investment Properties: Investors purchasing multiple properties can negotiate volume discounts, flat fees or reduced percentages based on annual transaction volume.
Fixer-Uppers: These challenging-to-market properties sometimes command higher commissions (3-3.5%) due to the smaller buyer pool and additional showing requirements.
New Construction: Developers often pay both sides of the commission, typically 2.5-3% per side. Buyers’ agents earn this regardless, so there’s less negotiating leverage, though you can ask your agent to rebate part of their commission to you.
Understanding these property-specific norms helps you negotiate appropriately for your situation.
Many consumers avoid commission negotiations because they worry about insulting the agent or receiving poor service. This psychological barrier costs thousands of dollars unnecessarily.
Reframe the Conversation: Commission negotiation isn’t personal, it’s business. Agents negotiate purchase prices, inspection repairs, and closing dates all day long. Your commission discussion is just another negotiation, and good agents will respect your business acumen.
Start with Research: When you’ve researched local commission rates and can reference specific comparisons, you’re not being cheap, you’re being informed. “I’ve interviewed three agents, and two offered 2.5% while you’re at 3%. Can you help me understand the value difference?”
Focus on Win-Win: Rather than demanding a lower rate, explore how you can help the agent justify a reduction. “I’ve already staged my home and have professional photos. Given that reduced marketing burden, can we discuss a lower commission?”
Remember Your Leverage: You can walk away and choose another agent. They cannot force you to accept their rate. This fundamental power dynamic should give you confidence to negotiate.
Consider the Relationship Duration: You’ll work with this agent for months. If they’re hostile or defensive during commission negotiations, imagine how they’ll handle actual transaction challenges. Their negotiation approach reveals their character.
Not every situation warrants pushing for the lowest possible commission. Sometimes paying more is the smarter financial decision:
Complex Properties: Unique homes with niche appeal require specialized marketing and agent expertise worth compensating appropriately.
Challenging Markets: In slow markets or during economic uncertainty, attracting quality buyer agents might require offering competitive commissions.
Premium Service Needs: If you need extensive hand-holding, weekend availability, or special accommodations, agents providing that premium service deserve fair compensation.
Proven Track Records: An agent with a documented history of selling homes 5-10% above list price might be worth a higher commission if that translates to tens of thousands more in your pocket.
Specialized Expertise: Luxury, commercial, or specialized property agents bring knowledge that justifies premium rates.
The key is making conscious, informed decisions rather than passively accepting quoted rates because you didn’t know negotiation was possible.
The coded workarounds described in this article represent agents clinging to traditional real estate commission structures that no longer serve consumers well. In traditional real estate transactions, commission rates were standardized at 5% to 6%, with buyers and sellers having little room to negotiate or even question these fees.
The modern real estate landscape demands more flexibility. Today’s informed consumers recognize that commission structures should reflect actual service value, market conditions, and individual circumstances, not outdated traditional real estate industry norms. When agents resist this evolution through cookie codes and subtle signals, they’re fighting against inevitable market forces that favor transparency and competition.
Breaking free from traditional real estate commission expectations benefits everyone: buyers save money, sellers maximize net proceeds, and ethical agents differentiate themselves through value rather than information asymmetry. The agents who thrive in this new environment will be those who embrace change rather than engineer workarounds to preserve the old system.
When agents use workarounds to maintain higher fees, it erodes trust in the entire profession. Buyers and sellers deserve to know exactly what they’re paying for and why. The real estate agent commission structure should be straightforward, not hidden behind cookies, movie references, or industry jargon.
The 2023 settlement was designed to give consumers more control over commission negotiations. But some agents are working against these consumer protections, undermining the intended benefits for American homebuyers and sellers.
This resistance also hurts ethical agents who embrace transparency. When consumers hear stories about commission workarounds and hidden fees, they become suspicious of all agents, even the honest professionals who operate with complete integrity.
Before your buyer’s agent can show you properties, the new rules require you to sign a contract establishing the agent’s commission terms. This agreement should clearly specify:
Review this buyer’s agent agreement carefully before signing. The real estate agent’s compensation structure should be transparent, with no hidden clauses. If any real estate agent’s tries to rush you through this paperwork, that’s a red flag. A professional real estate agent’s commission agreement will withstand scrutiny because it’s fair and clearly written.
Some buyers worry that negotiating their buyer’s agent commission will result in poor service. However, a quality agent won’t change their service level based on whether they earn 2.5% or 3%. Their reputation depends on client satisfaction regardless of commission rate. The terms of an agent’s commission should reflect market conditions and the agent’s experience level, not arbitrary industry defaults.
Similarly, when selling a home, the listing agreement you sign a contract for should detail your listing agent’s commission and any buyer’s agent commission you’ve agreed to offer. The seller’s agreement typically includes:
Many seller’s don’t realize they can negotiate different terms for different price ranges. For instance, you might agree to a 2.5% listing commission if the home’s final sale price exceeds $450,000, but 2.75% if it sells below that threshold. This structure aligns the seller’s and agent’s interests around achieving a higher sale price.
Before you sign a contract with any listing agent, interview at least three candidates and compare their proposed commission structures. An experienced real estate agent’s will explain how their commission reflects their marketing plan and expertise. They should be comfortable discussing the real estate agent’s commission as a negotiable business term, not an untouchable industry standard.
Don’t let commission games affect your real estate transaction. Whether you’re buying your first home or selling your current property, work with an agent who values honesty over hidden fees.
Before signing any agreements, ensure you understand:
Get connected with trusted professionals who will negotiate transparently and fight for your best interests. Your financial future is too important for cookie codes and movie references.
Remember: A good agent’s value comes from their expertise and service, not their ability to hide fees behind creative signals. The right agent will welcome your questions, provide clear answers, and put your financial interests ahead of their commission optimization strategies.
Source: The New York Times, April 29, 2025
Richard Kastl has been a real estate investor since 2018 and is an entrepreneur with expertise as a web developer, digital marketer, copywriter, conversion optimizer, AI enthusiast, and overall talent stacker. He combines his technical skills with real estate knowledge to provide valuable insights and help people make informed decisions in their property journey.
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