Can You Negotiate Real Estate Commissions? Yes, and Here’s How

When buying or selling a home, understanding real estate commissions is essential. These fees, typically a percentage of the final sale price, compensate agents for their services in guiding you through the process. However, contrary to popular belief, real estate commissions aren’t set in stone and can be negotiated

With recent changes due to the NAR settlement, you may be confused about how agents are paid and whether you can negotiate real estate fees. In this article, we’ll break down how commissions work, how Redfin handles them, and provide tips on negotiating to save you money.

What is real estate commission, and how much is it?  

A real estate commission is a payment the homebuyer or seller makes to their agent(s) for their services in helping them purchase or sell a home. The commission is often a percentage of the final home sale price and is exchanged during the final transaction at closing.

A common misconception is that there’s a set fee or percentage for real estate commissions across the industry. In reality, commissions are negotiated between the agent and the homebuyer or seller, and can vary.

Can you negotiate real estate agent fees?

Absolutely! Real estate commissions have always been negotiable, and that remains true even after the recent real estate commission changes. Commissions aren’t regulated by law, and can vary by area, giving both buyers and sellers the opportunity to negotiate these fees.

5 Tips for negotiating real estate commissions 

Negotiating realtor fees can seem like a daunting task, especially if you’re a first-time homebuyer or seller. However, negotiating real estate fees has always been allowed and there aren’t any laws against doing so. Let’s take a look at some of the strategies that can help you lower commission fees. 

1. Do your research

Understand the typical commission rates in your area so you have a starting point for negotiations. Rates can vary depending on the market, the property type, and the agent’s experience.

2. Leverage competition

Interview multiple agents and use competing offers as leverage to negotiate lower fees. Agents may be more willing to reduce their commission to win your business.

3. Highlight your situation 

If you’re selling a high-value property or buying in a hot market, mention this to the agent. A quicker sale or higher price point may motivate them to lower their fee.

4. Ask about discounts for repeat business

If you plan to sell or buy another property with the same agent, ask if they’d offer a discount for your loyalty.

5. Be upfront about your budget

Some agents may be willing to adjust their fees if they know you’re working within tight financial constraints, especially if it helps close the deal.

How does Redfin stand out when it comes to commissions?

At Redfin, we’re committed to offering consumers the best value, which is why we charge sellers a listing fee as low as 1%.*

For buyers, our fees vary depending on the market but remain competitive, as we understand that these costs can influence whether your offer is accepted or not. We also provide extra savings through our Sign & Save program. If you decide to hire your Redfin agent before your second home tour, we’ll reduce our fee by 0.25%.

A final note on negotiating real estate commissions 

Negotiating real estate commissions can seem intimidating, but it’s a perfectly acceptable and often beneficial part of the home buying or selling process. By doing your research, comparing agents, and understanding your leverage, you can potentially lower fees and save money. Remember, real estate commissions are flexible, and with recent changes in the industry, transparency and negotiation have become even more important. Whether you’re a buyer or seller, don’t hesitate to discuss fees with your agent and advocate for the best deal possible.

*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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