How Can You Negotiate Realtor Fees in 2025?

It’s common to negotiate realtor fees when selling or buying a home. However, a survey found that only 31% of homebuyers and sellers try to lower their agents’ commissions, but 61% of them successfully reduced their fees.

Negotiating can become easier due to new regulations proposed by the National Association of Realtors. The new practice encourages buyers and sellers to negotiate and pay their real estate agents separately, resulting in flexible payment options.

If you’re a doctor or medical professional about to buy or sell your home, explore these tips and insights from the real estate industry to negotiate your agent’s fee.

How Do Agent Fees Work?

A real estate agent receives a commission after helping their client buy or sell a home. The payment can be a flat fee, but most agents receive a percentage of the home’s sale price.

Under the National Association of Realtors’ Proposed Settlement Agreement, association members, real estate professionals, and consumers can no longer offer compensation on Multiple Listing Services (MLS). They must also enter into a written buyer agreement before touring properties.

These changes give a buyer’s agent more payment options, such as a flat fee, hourly rate, or percentage of the final home price. On the other hand, a buyer gains flexibility when negotiating fees with their agent.

Meanwhile, a seller can’t advertise that they’ll pay for a buyer’s agent commission but may do so during negotiations. A seller may only pay their agent or give a lower fee to the buyer’s agent.

Note that under the new practice, a buyer and seller pay for their agents, unlike the earlier practice, where sellers pay for both agents’ commissions. However, a seller may still offer to pay the buyer’s agent commission during negotiations to make their property more appealing to buyers.

Also, commission structures and regulations vary per state and jurisdiction. Check your local laws regarding the buying or selling process.

How Much Does a Real Estate Agent Charge?

Commission rates for a real estate agent ranged between 5% and 6% of the home sale price. However, a survey by Clever Real Estate found that the average commission rate for a buyer’s agent is 2.58%.

Note that fees depend on your location, the property type, home value, and current market conditions.

Key Tips to Negotiate Realtor Fees with a Real Estate Agent

Follow these steps to prepare and negotiate with an agent and potentially lower real estate commissions.

Research Local Commission Rates

Don’t start negotiating with a real estate agent without knowing your area’s average commission rate. Real estate commissions vary depending on your neighborhood, city, or state.

Knowing your area’s average rate and what sellers pay for homes like yours will show you how much commission you should set or ask to reduce. This knowledge will help you make informed conversations with agents and negotiate better.

Try to search for statistics online on the average agent commission rate in your area, or ask people you know how much commission they paid their agent.

Check the Housing Market and Sale Season

The timing and market conditions matter when buying or selling your property. If you want to work with an agent now, check the state of the local real estate market.

Agents can be more flexible regarding the seller’s market since a lower rate may mean a quick turnover. The faster they can sell, the more commissions agents get, even if rates are lowered.

However, agents may not negotiate lower rates during peak selling seasons, like spring and early summer.

Consider negotiating a lower rate during slow markets since agents tend to reduce commissions to attract clients. Slow periods include the holidays, winter season, and markets with low inventory.

Leverage Your Home Value

If you’re selling a home, you have more negotiating power if you have a high-value property. Agents tend to agree with a lower commission rate with high-priced homes, especially in luxury markets, since a smaller percentage can still provide a high payout.

For example, a $1 million home with a 2.5% commission rate yields a higher payout than a $300,000 home with the same percentage.

In contrast, agents may not be as willing to negotiate rates for low-value homes. If unsure of your property’s value, consider conducting a home appraisal.

Increase Your Home’s Desirability

Given the previous point, improving your property’s condition and appeal increases your home value and chances of negotiating a lower commission with your real estate agent.

Desirable homes are in well-maintained condition and good location, have in-demand amenities, and a reasonable price since these factors are easily marketable

If you want to boost your home’s appeal, consider improving the following:

• Landscaping
• Painting or staining
• Plumbing
• Kitchen repairs or updates
• Electric system
• Roof repairs

These improvements will cost you extra, but it’s worth it if it increases your home’s sale price and appeal. Overall, having a move-in-ready home encourages many agents to lower rates since the chances of selling the property are higher.

Go to Multiple Agents or Brokerages

Whether buying or selling a home, shop around and compare agents since each agent and brokerage differ in prices and services. Check which ones offer rates and services more suitable to your finances or which agents are flexible in adjusting their fees.

You can also try discount brokerage or agent matching platforms since they offer lower commissions. However, note that the quality of service may vary.

Sometimes, letting other agents know you’re looking into other realtors can encourage them to lower their fees due to competition.

Besides cost-savings, meeting multiple agents lets you find the right one who understands your needs best and has the expertise to help. Consider interviewing 4 to 6 agents before choosing one who suits your needs.

Offer Realistic Rates

Whether you’re speaking with new or seasoned agents, very few will agree with deducting over 1% of their real estate commissions. When asking for lower rates, make the percentage deduction reasonable, such as between 0.25% to 1%.

If you check your area’s average agent rates, you will know how much you can reduce without lowballing the agent. Ultimately, try to see things from the agent’s perspective to make a realistic offer.

Consider Working with an Experienced Real Estate Agent

Contrary to popular belief, new or inexperienced agents don’t always offer reduced rates since they have high brokerage fees and strict oversight. Instead, consider asking an experienced real estate agent for a lower fee, especially if selling a high-value property.

Although your goal is to decrease the rate, don’t forget about the quality of service. An agent with a good track record offers insightful market knowledge, better negotiation, and smoother transactions, resulting in better buying or selling outcomes.

Collaborate with the Agent

If a real estate agent refuses a fee reduction, ask if they offer additional services to add value to your property and increase the home sale price. These extra services may include professional staging or more marketing.

You can also propose a tiered commission structure where the commission percentage your agent receives depends on their performance.

Lastly, you can try working with the same agent if you’re selling your home and buying a new one. The agent may likely agree to a reduced commission since handling both transactions gives them a better earning opportunity.

Be Clear, Honest, and Respectful

Finally, when breaching the topic, politely ask if there’s room for a discount and clearly communicate what you can afford. If you can set a number first, it can shape the course of negotiation.

Ask about it as soon as you get in contact or while interviewing to clarify rates for both sides. You can outline your budget and explain your reason for a lower commission rate. You may also ask the agent why they charge a specific fee or percentage.

Ultimately, the goal is to understand each other’s needs and respectfully arrive at a reasonable compromise.

How Much Can You Save When Negotiating Realtor Commissions?

When negotiating real estate commissions, your agent may only allow you to deduct a small percentage, like 0.25% to 0.50%. This rate seems small, but it already offers significant savings.

For example, a $500,000 home sale with a 0.25% reduction means a $1,250 savings, while a 0.50% reduction saves you $2,500. The deduction can be lower or higher, depending on your negotiation skills.

Frequently Asked Questions

Is It Worth Working with a Buyer or Seller’s Agent?

Yes, it’s worth hiring a real estate agent. Although you can save money by avoiding a middleman, you can save time and effort during the buying or selling process. An agent can help you handle paperwork, provide local market expertise, and negotiate effectively on your behalf.

Does a Real Estate Agent Earn a Salary?

No. An agent usually earns by commission. The agent then uses this fee for their business license, insurance, advertising, and marketing. Since they get paid after transferring a title, they might receive their commission many months after working with a buyer or seller.

Does a Lower Fee Mean a Lesser Quality of Service?

A lower fee generally shouldn’t impact the agent’s level of service. However, it’s a possibility, as agents now compete with each other for commissions. To avoid a low level of service, familiarize yourself with the real estate practices in your area, be open with the agent, and set clear expectations.

Maximize Your Real Estate Transaction with the Right Financial Guidance

Buying or selling a home is more complicated than it seems. Besides the guidance of a real estate agent, consider working with a financial advisor to set the right fees according to your finances and maximize your transactions.

Physicians Thrive specializes in financial guidance and assistance for doctors and medical professionals who want to save, protect, or grow their income. This includes real estate services tailored for physicians.

If you need help with your next steps, contact Physicians Thrive today, and our team of advisors will walk you through the process!