How to Negotiate Commission With Your Real Estate Agent

Every penny counts when buying or selling a home, and saving on those real estate commissions can add real dollars—dollars that could go toward new furniture, a dreamy vacation, or simply padding your savings. 

How do you go about saving on those fees? Remembering an essential fact: those real estate broker fees are not etched in stone, which means you can negotiate them. 

But let’s face it—bringing up money can feel awkward. The thought of asking your agent for a better deal might have you wondering, "Will they take me seriously? Will they walk away?" 

Don’t worry, you’re not alone. Negotiating commission is a fine art, but it doesn’t have to be intimidating. With the right mix of preparation and strategy, you can confidently tackle the conversation and come out ahead.

Below, the team from Prevu Real Estate will help you navigate the delicate dance of negotiating real estate commissions and show you how to prepare for them.

Negotiating commission with your real estate agent

• Understanding how real estate commissions work
• Who pays real estate commission?
• Know your market before you negotiate
• Understanding agent motivation
• Build your case for negotiating
• Timing the negotiation
• How to negotiate commission as a buyer
• How to negotiate commission as a seller
• Explore alternatives to traditional real estate

Understanding how real estate commissions work

Real estate agent commissions often feel like that mysterious surcharge on your restaurant bill—the one you know exists but rarely think to question. Here’s the deal: real estate agents earn their keep by taking a commission from the sale of a home, typically calculated as a percentage of the home sale price. 

Understanding what these commissions cover is essential for buyers and sellers alike. Agents don’t just pocket their percentage and call it a day. That fee compensates them for their time, expertise, marketing costs, and negotiating prowess—all crucial elements in a successful real estate transaction. A lot is happening behind the scenes, from staging advice to crafting compelling listings or even pounding the pavement to secure a deal.

But here’s the thing: commissions are not one-size-fits-all. They’re negotiable. And that opens the door to exploring ways to save money on your bottom line while reaping the benefits of working with an experienced agent. With a bit of know-how and the right approach, you can tailor an agreement that works for both your wallet and your agent’s efforts.

Who pays real estate commission?

The topic of who pays real estate commissions has become a hot-button issue, especially following recent legal settlements involving the National Association of Realtors (NAR). Traditionally, sellers have often chosen to offer payment for both their listing agent’s commission and the buyer’s agent commission as an incentive to attract buyers. However, it is important to note that this is not a requirement and is always negotiable.

In scenarios where a seller does not offer to pay a buyer’s agent commission, the responsibility may fall to the buyer. Buyers who wish to work with a buyer’s agent should be aware that they might need to budget for their agent’s commission in such cases. This shift in dynamics emphasizes the importance of clear communication and understanding the terms of your agreement with your agent.

As this conversation evolves, many buyers and sellers are rethinking traditional commission structures. Buyers, in particular, should discuss commission arrangements with their agent upfront to avoid surprises and ensure alignment on costs. 

Ultimately, negotiating commission is a key aspect of managing the financial details of any real estate transaction.

Know your market before negotiating 

Before you negotiate, you’ll want to arm yourself with knowledge; real estate is no exception. 

The local market is your ultimate guide to understanding how much leverage you have when negotiating commissions. 

In a competitive seller’s market where homes practically sell themselves, agents may be more inclined to budge on their fees. On the flip side, in a slower market where inventory sits a bit longer, agents might be less open to striking a deal.

Do some digging. Check out recent sales in your area, noting how quickly homes are being snapped up and at what prices. 

As a home seller, if properties in your neighborhood are selling at lightning speed, you have a prime opportunity to flex your negotiating muscles. But if the market feels sluggish and agents will have their hands full getting your property sold, you might have less room to haggle on fees. The same homework applies to buyers.

If a buyer is facing a seller’s market sitting on limited inventory that every buyer in town has eyes on, expect your buyer’s agent to do some heavy lifting to secure the deal or find off-market listings, which means there is less opportunity to negotiate their commission if you are paying out of pocket. But if you’re sailing through the jovial waters of a buyer’s market and plenty of homes to choose from, your buyer’s agent might be more flexible with their fee if they know they have the upper hand in negotiations to request that a seller pay their fee.

Don’t forget to compare commission rates in your area, as well. While pre-conceived notions about commission rates have traditionally hovered around 5-6%, some regions or agents may already charge less or be more negotiable. Knowledge is power, and understanding the lay of the land will help you enter the negotiation with confidence—and realistic expectations.

Understanding agent motivation

Real estate agents are not one-size-fits-all professionals—they’re humans navigating market forces, client demands, and their own financial goals as they seek a listing opportunity or a buyer client. Understanding what drives their willingness to negotiate can make all the difference when you approach the subject of commission. So, what exactly motivates an agent to budge on their fees?

First, let’s discuss market dynamics. In slower housing markets, agents may be less prone to negotiation, knowing that closing any deal could take longer and require more effort. Similarly, when competition among agents is fierce, flexibility on commission rates can become a crucial tactic to win your business.

The value of the property in question is another critical factor. High-value homes generate larger commissions simply by virtue of their price tags, giving sellers some leverage to request reduced rates. After all, a slightly smaller percentage slice of a million-dollar pie is still a pretty big piece. For buyers, being organized and demonstrating a readiness to act—complete with pre-approval and a clear timeline—can make you an ideal client, incentivizing agents to consider flexible commission structures.

And let’s not forget the long game. Many agents are willing to negotiate fees if they see the potential for a lasting relationship. Maybe the promise of future referrals, repeat business, or a glowing testimonial motivates them to cut you a deal. Position yourself as someone in it for the long haul, and you might find an agent willing to view a reduced commission as an investment in the future.

Building your case for negotiating

Negotiating real estate commissions isn’t about haggling; it’s about presenting a compelling case that makes your agent see value in flexibility. 

Start by doing your homework. Real estate commission rates aren’t carved in stone—they fluctuate based on the market, property type, and region. Research what’s typical for your area to set the stage for reasonable expectations. If you know that most agents in your city charge around 5-6%, you can better frame your request for a slightly lower rate as grounded and fair. The more aligned your ask is with local norms, the more likely your agent will see it as a rational conversation rather than an uphill battle.

Your position as a buyer or seller also gives you leverage—if you know how to play it. Sellers can make their case by emphasizing a well-prepped, market-ready home in a sought-after neighborhood. A polished, move-in-ready property reduces the effort needed to close the deal, making a reduced commission easier to justify. Buyers, on the other hand, can highlight their readiness. A pre-approved buyer with a clear budget and a willingness to move quickly presents less risk and more certainty to an agent, making a negotiated rate more appealing.

Don’t underestimate the power of future opportunities to sweeten the deal. Agents often view a reduced commission as an investment in long-term relationships. Maybe you plan to sell another property or have friends and family eager for recommendations. By presenting yourself as a potential repeat client—or a referral goldmine—you align your goals with theirs.

Timing the negotiation

Timing is everything, especially when negotiating real estate commissions. The best moment to broach the subject is early—ideally, during initial meetings with an agent. This is when you’re both assessing whether the partnership is a good fit, and it’s the perfect opportunity to set expectations on both sides.

However, bringing up commission negotiations after a deal is already in progress is a surefire way to ruffle feathers. By that point, the agent has likely invested significant time and resources into your transaction, and asking them to reconsider their fee might not be well-received (and likely impossible as you will probably have signed a buyer representation agreement). Save yourself the awkwardness by addressing it upfront.

If you’re unsure how to start the conversation, keep it casual but clear. A simple "I’d like to discuss commission rates and whether there’s flexibility" is enough to get the ball rolling. The earlier you open the dialogue, the more time you’ll have to reach a mutually beneficial agreement.

How to negotiate commission as a buyer

Begin the conversation by acknowledging the agent’s value. Highlight their expertise and explain that your budget is tight and you’re exploring every avenue to make your purchase more affordable. A respectful approach—such as asking, "Is there flexibility on your commission rate?"—sets the tone for a constructive discussion. Agents are more likely to consider adjustments if they see you’re serious about the process and appreciate their efforts.

Preparation is another ace up your sleeve when negotiating as a buyer. Arriving pre-approved for financing and armed with a clear understanding of what you’re looking for makes you an attractive client. Agents are more likely to work with you on flexible commission terms if they see you’re decisive, well-informed, and ready to act quickly. Time is money, and agents appreciate buyers who reduce the guesswork and streamline the search process.

Consider sweetening the deal by offering to handle some of the legwork yourself. If you’re willing to search for properties online, attend open houses solo, or narrow down your choices before requesting a showing, you save your agent time and effort. This "low-maintenance client" approach can make a reduced commission feel more justifiable, increasing the likelihood of a successful negotiation.

In lieu of any arrangement with your buyer's agent, buyers should always try to negotiate for the seller to pay their buyer's agent commission as part of their offer, when possible.

How to negotiate commission as a seller

For sellers, negotiating commission starts with understanding what you bring to the table. Is your property in a high-demand area or priced competitively? Do you have professional photos and staging ready to go? These factors reduce the workload for your agent and can strengthen your case for a reduced commission.

Timing your conversation is crucial. Bring up commission discussions before signing a listing agreement, as this is when agents are most eager to win your business. Frame your request as a partnership opportunity. For example, say, "I’m confident my home will sell quickly given its features and location. Would you consider reducing your rate to reflect the lower time and effort involved?"

Another effective strategy is to offer exclusivity. Let the listing agent know you won’t shop around or entertain multiple brokers if they’re willing to adjust their rate. Agents value committed clients and may be more open to negotiating if they see you as a guaranteed deal. 

Just be sure to stay respectful and realistic—asking for a drastic cut may sour the relationship, so aim for a fair balance that works for both parties.

Explore alternatives to traditional real estate

If traditional commission structures don’t align with your budget, don’t worry—real estate has options. Discount brokerages, for example, offer reduced fees in exchange for streamlined services. These firms often rely on technology and efficiency to keep costs low, making them a popular choice for budget-conscious buyers and sellers.

Flat-fee real estate services are another route worth exploring. With this model, you pay a set fee for specific services, such as listing your home on the MLS or handling paperwork. While you’ll likely need to take on more responsibilities yourself, the cost savings can be substantial, especially in high-value markets.

For the ultimate DIYers, For Sale By Owner (FSBO) can be an appealing option. While it requires significant effort—from marketing your property to negotiating directly with buyers—FSBO allows you to bypass commission fees entirely. Just be sure to weigh the time and expertise required against the potential savings.