How to Negotiate Commission in 2025
Real estate commissions made big headlines in 2024, i.e. a class action lawsuit and subsequent settlement permanently removed offers of buyer agent compensation from the MLS. If you’ve missed this, just refer back to previous blog posts as we’ve explored these topics extensively. Here are today’s questions: How can both home buyers and sellers benefit from these changes and negotiate commission costs in 2025 and beyond?
1.
Be aware that negotiating commission due to
your real estate agent is, and always has been, both a possibility and a right.
There have been no changes to real estate law. However, we encounter too
many people who either didn’t know this or have been told otherwise. Whether
you are buying or selling a home, you have the right to negotiate commission
with the agent you hire.
From discussions with clients and customers, it seems that many agents simply
refuse to negotiate commission in any way. Some brokerage business models rule
out negotiating on commission entirely, and when it comes to negotiating fees
to offer for buyer agents, it seems even fewer options are proposed. There is a
reason the public is most familiar with a “traditional 6%” model. One way or
another, the real estate industry has historically pushed a one-size-fits-all
approach.
Don’t just take “no” for an answer. Realtors
are pros as negotiating. Make them prove it to you!
2.
Offers of compensation are no longer allowed
on the MLS. So how are Buyer Agents getting paid? The Lawrence real estate
contract has an added paragraph where the buyer and the buyer’s Realtor may ask
the seller to pay a commission. The seller is then able to negotiate on this
term directly with the buyer and their agent. Know that you can work with your
agent to negotiate this on a case by case basis.
3.
Know the difference between a broker and an
agent. By definition, a broker has more power to negotiate than an agent,
because they are in control of setting their business model and negotiating
approach. At R+K Real Estate, Ryan is the broker. As part of the R+K’s business
model, we keep our overhead costs as low as possible to maximize our ability to
negotiate on commission. Read the Real Estate Relationships Brochure for more
information on agency.
4.
Interview several agents/brokers before
choosing one to buy or sell your home, and make sure you are confident with
their experience, negotiating approach, and business model. First and
foremost, you want a broker who understands these changes and has already been
anticipating their implementation. Transparency is key. If a real estate agent
refuses to negotiate their commission with their seller and when offering
compensation to a buyer agent, consider whose interest they have at heart.
5. Be aware of discount brokers and know what service they’re really offering. Again, transparency is key. Some home sellers may be searching the internet for a discount broker or a flat fee broker in Lawrence, KS in order to save some cash. Knowing the difference between a full service broker and a discount broker is crucial: too often a discount broker means discounted commissions AND discounted service, which we strongly caution against.
Knowledge is power. With this, sellers and buyers in 2025 should more fully understand how to use commission negotiation to their advantage. We built our business model in defiance of 6% commissions, with transparency at the heart. Since creating our company in 2019, we’ve aggressively sought to bring options to buyers and sellers in this market. For us, it’s been the right thing to do from day one.
R+K Real Estate is a full service, independent real estate broker, actively leveraging technology and change in the industry to the financial benefit of our clients. The spring market is around the corner, contact us today and let’s talk about how we can help you meet your real estate goals this year!
Ryan & Katie Desch
Broker, Owners, REALTORS®
