Commissions: For Sellers

Understanding Real Estate Commissions: A Guide for Home Sellers

Selling a home is a significant financial decision, and many sellers are unaware that real estate commissions are negotiable by law. Recent industry rule changes have altered how commissions are handled. This report outlines what sellers need to know about negotiating commissions with their listing agent, understanding the buyer side, and making informed decisions to protect their interests and maximize value.

1. Legal Basis for Commission Negotiation

Real estate commissions are not fixed, not set by law, and not standardized. Sellers have the right to negotiate compensation with their listing agent only.

Key Points:

Under the new rules, sellers negotiate only the listing agent's commission upfront.
The buyer side commission may or may not be negotiated as part of the offer submitted.
Sellers have autonomy to decide whether to pay the buyer agent commission, but this decision can impact the size of the potential buyer pool.

2. The Myth of 6 Percent

It is not true that sellers must pay a six percent total commission (three percent to the listing agent, three percent to the buyer's agent).

Six percent is a historical convention, not a legal requirement.
Sellers should focus on negotiating the listing agent's commission, which covers marketing and selling the home.
The buyer agent commission will often be addressed separately in the offer and is the seller's choice to accept or adjust.

3. Negotiation Options for Sellers

Sellers can structure their listing agent commission in various ways:

Reduced percentage rates
Flat-fee arrangements
Performance-based commissions

Buyer Agent Commission Considerations

When offers come in, buyers may negotiate the buyer agent commission with the seller. Sellers must understand:

You are not required to pay the buyer agent commission.
Declining to pay it may reduce the number of buyers willing to submit offers.
Different buyers have different needs and expectations.
The decision to pay or not remains fully in the seller's control.

The key takeaway: negotiate only the listing agent's commission at the start. The buyer agent portion is a separate decision when offers arrive.

4. Seller Warning

Beware of claims that commission rates are fixed. Any agent suggesting that rates cannot be negotiated is not being transparent.

Only negotiate the listing agent's commission upfront.
Buyer agent commission may arise during offers, and the choice is yours.
Understanding these rules protects your financial interests and avoids surprises.

5. The Role of hömhub Partner Pro Agents

hömhub is committed to educating and empowering sellers.

Commissions are negotiable, and sellers have control over the listing agent portion.
Partner Pro Agents understand the new rules and guide sellers through decision-making regarding the buyer side commission.
Agents help sellers balance exposure, net proceeds, and strategic decisions while respecting negotiated terms.

6. Recommendations for Sellers

Negotiate the listing agent's commission upfront before signing any agreement.
Understand buyer agent negotiations will occur at the offer stage.
Weigh buyer pool impact if considering not paying the buyer agent commission.
Ensure transparency with your agent regarding fees, terms, and potential buyer-side negotiations.
Leverage your knowledge to structure agreements that align with your goals.

Conclusion

Sellers negotiate price, terms, repairs, and the listing agent commission. The buyer agent commission is separate and is addressed when offers are submitted. Each decision affects your transaction, buyer pool, and net proceeds.

hömhub Partner Pro Agents are ready to guide sellers through this process, ensuring transparency, autonomy, and maximum value.

Knowledge is leverage. Use it!