What are Realtor Commissions & are they Negotiable?

Posted by Round Table Realty on Thursday, January 6th, 2022 at 1:07pm.

What are Realtor Commissions & are they Negotiable?


Real estate commissions are a percentage of the final sales price that is paid to the Realtor representing the transaction for either the buyer or the seller.  Sometimes the commission on the sale of a home is 6%, which means 3% goes to the seller’s Realtor and 3% goes to the buyer’s Realtor. The Realtor splits that commission with his/her brokerage, and that amount varies by the brokerage. Sometimes, Realtors are asked to negotiate their commissions with their clients. While a Realtor can negotiate their commissions, it begs the question… 

How does your Realtor earn commission?

  1. You probably wouldn’t go to court without a lawyer. Realtors know the contracts and the home buying processes inside and out. They can literally save you thousands of dollars, not to mention hours of time.

  2. Realtors are more than just home search engines. Of course, you can search the internet for your dream home, but Realtors know about future developments that could raise or lower the value of a home, HOA and CDD fees, and even know about homes before they ever hit the market.

  3. They know how to negotiate on your behalf. A single agent (like Round Table Realty agents) is a Realtor who works as a fiduciary, only serving you their clients. That means negotiations are one of the most important and specific parts of what they do. What if you get a cash offer? What if you’re in a bidding war? What kind of contingencies can you offer to convince someone you're the buyer for them? Realtors are worth their weight in gold at the negotiating table.

  4. Realtors know more than real estate. They know inspectors, lenders, homeowners insurance agents, contractors, electricians, plumbers, roofers, attorneys… The list goes on! Not only are you getting an expert to walk you through a huge transaction, you’re getting a partner who can guide you towards reputable people in related fields. 

Realtors work 365 days a year, and only get paid on the days they close on a home. That means if you begin working with a Realtor and decide not to purchase or sell a home, they’ve essentially worked for free. If it takes you 4 months of searching with your Realtor to find the perfect home, they’ve worked 4 months without a paycheck. If your home is for sale and the buyer backs out before the closing date, your Realtor must start at the very beginning without ever getting paid for how hard they worked on the first transaction! And these examples happen regularly. 

Are commissions negotiable?

Yes. There is no law that states how much a Realtor’s commission must be. There are certain reasonable situations in which a Realtor and Brokerage might agree to reduce a commission:

  1. If a Realtor is helping a client to both sell their current home and purchase their next home 

  2. If a Realtor’s client buys or sells several times a year, as in an investor 

  3. If a Realtor t is providing fewer services than they typically do for an agreed-upon reason

  4. If the home is selling for a high price, for example over $800,000 

 Work with a Realtor who can represent you as a Single Agent and identify your needs upfront. Your Realtor can and should work to get you the best deal and save you the most money. That’s how they earn their living. 



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