Should you try to negotiate realtor fees? | Negotiating tips and tricks | Find average commissions in your state | More ways to save | How commissions work | Factors that affect your rate
Are realtor fees negotiable?
Realtor fees are technically always negotiable, regardless of what an agent or broker might tell you. But your ability to negotiate a lower rate — and how much lower — depends on a variety of factors, including your property, demand in your area, the agent’s relationship with their brokerage, and the current market.
The housing market is much cooler in 2023 than it was at the height of the pandemic housing boom. With fewer people buying and selling, some agents may be more willing to lower their fees in order to earn your business.
However, negotiating realtor fees can be tough! Keep reading for tips on asking your realtor to reduce their commission. But be aware that even if you do manage to talk your agent down, it may not be the big price reduction you were hoping for.
The good news is there are better ways to save on realtor fees. Clever Real Estate actually negotiates lower commission rates with realtors on your behalf — for free. You'll get matched with experienced realtors from top brands like Keller Williams or RE/MAX, but pay just 1.5% in listing fees (about half the usual rate) when you sell.
Clever's size gives it a lot more negotiating power than an individual home seller. Clever sends agents a steady stream of new business at no up-front cost. And the agents are willing to accept a lower 1.5% commission in exchange for that value. Find top local agents and get a 1.5% listing fee now!
Should you negotiate realtor fees?
Absolutely! Selling a house is expensive, and realtor fees are one of the largest costs. Even a minor fee reduction could save you thousands.
There’s no set fee that all real estate agents charge — that would be price-fixing — but the current average commission rate nationwide is approximately 5.45%.
For a $346,800 home sale — the current median home value in the U.S.— that would translate to roughly $18,900 in realtor fees.[1]
Sticking with the above example, if you negotiated 1.5% off your commission, you'd save over $5,200!
How to negotiate real estate commission
Negotiating can be tough, so we've compiled 10 tips that will make the process feel less stressful. Before we get into specifics, remember that you should approach negotiating realtor commission with a prospective agent in a respectful and considerate manner.
You’re relying on your agent to guide you through a complex, high-stakes, and stressful process. Don’t get things started off on a sour note!
🤝 Always aim for a mutually beneficial outcome. The purpose of negotiating isn't to "win." It’s to find the most mutually beneficial terms for both parties involved. Instead of asking only for concessions, consider how you'll add value to the partnership as well. |
Jump to a negotiating tip
- Evaluate your negotiating leverage
- Find your area's average commission rate
- Shop around for the best value
- Make your house easier to sell
- Create value for the agent
- Offer a full buyer’s agent fee
- Work with an up-and-comer
- Sell and buy with the same agent
- Let your agent represent you and the buyer
- Be prepared to walk away
1. Determine how much negotiating leverage you have
Get a good idea of how much leverage you have based on the various factors that determine how easy your home will be to sell.
In particular, pay close attention to:
- Market conditions (realtors may be hungrier for clients in slower markets)
- Your agent's experience (newer agents may be more willing to negotiate)
- How much demand there is for homes like yours in your area
- How much your agent stands to earn based on your target rate and price
Compared to the past few years, the 2023 housing market has cooled significantly. With interest rates higher than they've been in many years, buyers are reluctant to take out new home loans, while sellers are reluctant to let go of their low rates.
With fewer buyers and sellers out there, realtors are competing for a much smaller pool of potential clients. As a result, they may be more willing to negotiate commissions.
2. Know the average commission rate in your area
The average nationwide total commission rate is 5.45%, with the typical listing fee rate being 2.7% — but this number varies from market to market.
For example, the average commission rate in Missouri (6.07%) is higher than in New Jersey (5.17%).
Knowing what’s typical in your area will give you a good baseline for your negotiations, ensuring both parties keep requests reasonable.
» MORE: Find the average commission rate in your area
3. Shop around for the best possible value
There are many real estate agents and brokerages to choose from, and every one is different.
Some are inflexible on price, whereas others are open to tailoring fee and service structures to suit your specific needs.
Others — specifically discount brokers and agent matching services — offer built-in commission savings, no negotiations required (though there may be service-quality trade-offs).
Do your homework to find the right agent or service for you. We recommend interviewing at least two to three options to find the best fit — in terms of price point and customer service.
4. Offer to invest in things that make your house easier to sell
Agree to make recommended pre-listing repairs and improvements, such as repainting, landscaping, and cleaning the carpets.
If you’re willing to put up some cash to make your agent’s job easier, they may be willing to lower their rate in return.
If you want to take it a step further, you can pay for a pre-listing inspection. This will help surface any issues that could prolong or derail negotiations.
5. Consider how you can create value for the agent
Selling a house is complicated. Agents not only have to invest a considerable amount of their personal time — but also typically cover a number of up-front costs, such as professional photos and marketing expenses.
When negotiating rates, look for ways that you can help reduce those up-front costs or bring some kind of value for the agent to sweeten the deal.
Maybe you don’t care about open houses or 3D tours, or you have a friend who’s a professional photographer who can take care of the images for the listing.
Keep in mind that the agent is looking to sell your home fast and for the best possible price. If you try to net savings by forgoing important services that may make it harder for them to succeed, they might have second thoughts about working with you at all.
6. Offer a full buyer’s agent fee
Offering a competitive buyer’s agent fee is key when it comes to getting homes sold fast and for the best possible price.
📢 Don't skimp on buyer's agent commission! Approximately 90% of buyers work with an agent. When you don’t offer a competitive buyer’s agent commission, buyer's agents will deprioritize showing your home — if not steer their clients away from it entirely (even though that’s technically illegal, it still happens). |
Unless you or your agent have a buyer lined up coming into the sale, offering a low buyer’s agent commission will significantly reduce your prospective buyer pool and make it harder to sell your home.
It'll also reduce your agent's likelihood to lower their rate, since they would be assuming more risk by taking on a listing that may take longer to sell — or fail to sell altogether.
7. Consider working with an up-and-comer
Newer agents may be more open to working for lower rates, since they’re often more concerned — at least in the short term — in growing their reputation by bolstering their sales numbers, positive reviews, and word-of-mouth referrals.
However, newer agents’ rates are often dictated by their brokerage, so they may not have much ability to lower them.
Additionally, there are some trade-offs that come with working with a newer agent instead of a top-producer with tons of experience, local market expertise, and a robust professional network.
8. Offer to sell and buy with that same agent
As a one-time customer, you represent a single paycheck opportunity for an agent, which gives you limited negotiating power.
But when you agree to sell and buy with an agent, you’re now doubling that paycheck opportunity. The agent is earning more money without having to invest additional resources into picking up that second transaction.
As a result, the agent may be willing to lower their rate to secure both deals. They’d earn a lower commission on the home sale but more money overall, since they’d collect a fee on both transactions.
9. Let your agent represent you and the buyer
When a single agent represents both parties in a real estate transaction — known as dual agency — it’s common for them to lower the total commission rate since they’re collecting both sides of the fee.
Dual agency typically occurs when you find your own buyer or when an unrepresented buyer approaches the agent or their brokerage about your listing directly.
Dual agency lowers the overall cost of the transaction and thus can benefit all parties. However, it also poses some significant risks and conflicts of interest for both the buyer and seller. For this reason, dual agency is illegal in eight U.S. states.
» LEARN: Everything you need to know about dual agency
10. Be prepared to walk away
The goal of any negotiation is to reach a mutually agreeable outcome that benefits all parties involved — but you also should be willing to walk away if the other party is unwilling or unable to give you what you need for the deal to make sense.
That said, before you draw a line in the sand and declare something is a deal breaker, make sure you’re actually ready to walk the walk. If you’re bluffing and the other party calls it, chances are they’ll feel like they can push even harder — and your chances of getting an outcome you feel good about significantly lower.
More ways to save on realtor fees
Depending on your market and property, you may not be able to negotiate a lower rate with agents. Or you may just prefer to avoid negotiations, but you still want a lower rate. If so, these alternatives can save you money without any awkward negotiations.
Work with an agent matching service
Consider finding your realtor through an agent matching service that pre-negotiates discounted rates, like Clever Real Estate.
The best agent matching services are free to use and work only with top-rated, full-service agents.
For example, Clever matches you with top-rated local agents from major brands and top regional brokerages. The agents have agreed to offer Clever customers full service for a fraction of their typical rates. Don't just take our word for it — read Clever Real Estate reviews from real customers.
Hire a discount real estate broker
Discount real estate brokers have in-house agent teams that offer many of the same services as traditional agents at a significantly lower price.
Most brokers make up for their discounted rates by handling a higher volume of business per agent, which means there are often service-quality trade-offs.
» MORE: The ultimate guide to discount real estate brokers
Sell for sale by owner (FSBO)
Listing your home FSBO means you’re handling the entire sale yourself, without the help of a real estate agent.
The potential upside is big savings. You won't have to pay 2.5–3% of your home’s sale price to a listing agent. And if you find an unrepresented buyer, you can also avoid paying the typical 2.5–3% buyer’s agent fee.
However, there are a number of big downsides to FSBO sales as well. Selling a house is a complex process. Unless you have a ton of real estate experience and time to kill, your chances of getting the best possible price and terms — or selling your home at all — are relatively slim.
» MORE: How to sell your house for sale by owner
Hire a flat fee MLS company
One of the biggest challenges for FSBO sellers is attracting qualified local buyers. Flat fee MLS services can help increase your FSBO listing’s exposure without breaking the bank.
A flat fee MLS company lists your home on your local MLS — the primary platform agents use to find properties for their clients — for a low, up-front fee. Normally you need a realtor to get on the MLS, but with a flat fee company, you can access the MLS without a realtor.
You get increased visibility, but the benefits typically end there. You’ll still have to manage the entire sale yourself, and you’re on the hook for the fee whether your home ends up selling or not.
» MORE: What to know about flat fee MLS listing services
Don’t be afraid to initiate a pricing conversation!
Most agents are used to having conversations about compensation and will be open to negotiating rates.
In fact, a Zillow study found that approximately 31% of home sellers attempt to negotiate terms with their listing agents — and about 57% are successful.[2]
The marketplace is becoming increasingly competitive, as more agents compete for fewer listings.
Additionally, discount services like Clever and Redfin, with built-in low rates, are continuing to gain market share and reshape consumer expectations about what a realtor’s services should cost. Clever, for example, offers a 1.5% listing fee.
As a result, many agents and brokers are becoming increasingly flexible on pricing and service structures — particularly when looking to attract sellers with desirable properties in high-demand markets.
Even a 0.5% reduction in your realtor's commission can translate into thousands of dollars of savings, so it's worthwhile to try to negotiate. Try our calculator to see how much you could save by paying a lower realtor commission.
Always shop around for the best price!
There are a ton of options — different brokerages, agents, discount services, and more — to choose from.
With a little legwork, you can to find a great agent who’s willing to negotiate the specific terms you’re looking for.
We recommend shopping around and interviewing at least three agents to find the best fit and overall value.
» MORE: Find top local agents, compare your options, and choose the best fit
Potential challenges to negotiating a lower commission
Realtor fees are always negotiable. But in practice, not all agents can lower their rate.
Many brokerages dictate commission structures, particularly for newer agents. So an agent may not be able to lower their rate, even if they want to.
✍️ Editor's note If you’re looking to negotiate fees, a more established agent may have more sway and control over their fee. However, it may be hard to convince them to budge on price. Top agents with lots of experience know their worth — and are typically in high demand. This makes them less likely to be flexible on price than a hungry up-and-comer looking to establish themselves. |
You never know unless you ask. Even experienced agents may be willing to offer significant reductions under the right circumstances.
Don’t be shy about initiating the conversation! Worst case they say no — best case you come away from the sale with thousands more in your pocket.
Remember: Your agent has a bottom line to look out for
When entering into price negotiations with an agent, keep in mind that the deal has to make sense for them financially.
Being a real estate agent isn’t cheap, and lowering their rate too much could result in them actually losing money on your sale.
Newer agents in particular have to share a large portion of their commission with their brokerage, so they likely have slimmer margins to play with than seasoned vets or independent agents who run their own brokerages.
⚖️ Discounted fees affect your agent more than they affect you! A one-point reduction on a 6% total commission fee will net you about 16% in savings, all said and done. But that 1% reduction to the total fee means your listing agent will actually lose out on about 33% of their potential revenue, assuming a 50% split with their brokerage. |
How do real estate commissions actually work?
Knowing what agents typically earn on a sale can give you more context going into negotiations.
In a conventional real estate transaction, the total commission rate — around 6% — is typically split down the middle between two agents:
- The listing agent, who helps the seller market their home
- The buyer’s agent, who brings one of their clients to purchase the home
The seller usually pays both agents’ fees — or more accurately, the fees are baked into the home’s price and come out of the seller’s proceeds.
This allows buyers to cover the cost of their agent with their mortgage instead of paying the full price out of pocket.
Fee | Rate | Cost* |
|---|---|---|
Listing agent’s fee | 3% | $12,000 |
Buyer’s agent fee | 3% | $12,000 |
Total | 6% | $24,000 |
*Based on a $400,000 home | ||
Savings typically come from the listing agent’s fee — not the buyer’s agent fee
When you negotiate a lower commission rate, the buyer’s agent fee typically stays the same. It’s generally your listing agent who agrees to take a smaller slice of the pie.
On a $400,000 home, a 1% reduction might break down like this:
Fee | Rate | Cost |
|---|---|---|
Listing agent’s fee | 2% | $8,000 |
Buyer’s agent fee | 3% | $12,000 |
Total | 5% | $20,000 |
Offering a competitive buyer’s agent commission is important to incentivize agents to show your home. It maximizes the chances you’ll sell fast and for the best possible price.
In the above example, both agents clear approximately $12,000 when they earn a 3% commission — on the surface, not too shabby. However, each agent has to split a portion of their respective fee with their broker.
Commission splits depend on the brokerage and agent’s status within it. But newer agents might have to split as much as 50% of their take.
So out of a $24,000 total commission, the listing agent might personally net only about $6,000.
Some agents simply won’t have much room to come down on price, even if they wanted to, if they hope to turn a profit on the sale.
Agents usually cover a number of out-of-pocket expenses during the sale — professional photography, 3D tour, staging, and other marketing costs.
Agents also invest a ton of personal time into both finding new customers and getting the home sold.
To top it all off, most agents are independent contractors. They’re typically responsible for self-employment taxes and recurring fees for MLS access, their real estate license, association memberships, office space, and more.
It’s not unusual for an agent to put half their net commission toward taxes and overhead. The final amount of money that actually goes into their pocket could be an eighth, or less, of the total commission.
By understanding what an agent's financial situation looks like, you can be realistic when you're negotiating realtor fees.
Factors that can affect commission rates
Several factors can affect your quoted rate — and how much leverage you may have to negotiate a lower one.
The higher your home’s price, the easier it will be to negotiate a lower rate. Luxury homes typically pay lower rates regardless, no negotiating required. A small slice of a $1,000,000 pie is still a lot bigger than a full slice of a $250,000 pie — but both may take the same amount of time and effort to sell.
If you’re in a hot market where properties are selling within a couple days, regardless of their condition, agents may be more open to a lower rate. After all, time is money — the faster your home will sell, the less time and effort the agent will have to invest.
If you have a highly desirable home, an agent may be more motivated to lower their rate to secure your listing. Conversely, if your home seems like it’ll be hard to sell — it’s in disrepair or in a bad location, it has an eccentric layout, etc. — the agent is assuming more risk and may be less willing to budge on price.
In the off-season or in low-inventory real estate markets, new listings are hard to come by. Agents might be willing to lower their rates to secure new business because they need work and are in lower demand.
Newer agents may be willing to drop their rates — assuming their broker allows it — to boost their sales numbers and reputations.
Conversely, experienced agents will likely have more flexibility. But they may be less inclined to negotiate because they know their worth and are in high demand.
FAQ
The average real estate commission is between 5–6%, with half going to the seller's agent and half to the buyer's agent. However, real estate commission fees vary by state. Find average commission rates in your state here!
Yes, realtor commission fees are negotiable. However, your ability to negotiate realtor commission depends on a lot of factors, including where you live and how easy your home will be to sell.
Related articles
Federal Reserve Bank of St. Louis. "Median Sales Price of Houses Sold for the United States." Updated Q4 2020.
Zillow Group. "Consumer Housing Trends Report 2018."