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Understanding Realtor Commissions in 2025

In the months after my daughter was born, we realized pretty quickly that the cozy two-bedroom we'd loved before her arrival was no longer going to cut it. What once felt quaint and “just enough” started to feel tight—tight on space, tight on quiet, and increasingly tight on patience. So, I started house hunting.

I was sleep-deprived, juggling work and fatherhood, and in no shape to wade through listings and coordinate showings. I decided to work with a realtor. It felt like the safe, traditional move. But when we finally closed and I saw the commission—tens of thousands of dollars—I couldn’t shake the feeling that something was off. I had been working with a kind, well-meaning agent, but the value just didn’t match the cost.

It was even harder to swallow knowing that, just a few years earlier, I had bought a home directly from a builder—no realtor involved—and negotiated nearly $50,000 off the list price. That experience was far more transparent, efficient, and financially beneficial. The contrast between the two transactions couldn’t have been starker.

The Traditional Commission Model

For decades, the real estate industry has operated under a largely unchallenged model: the seller typically pays a 5–6% commission on the sale price of the home—split between the buyer’s and seller’s agents. This structure is often baked into the process without much discussion. For most buyers, it’s invisible. They’re told it’s “covered by the seller,” even though it’s effectively built into the home’s price.

And in many cases, buyers feel like they don’t have the right—or the expertise—to question it. This leads to wildly inconsistent experiences. Some agents go above and beyond, guiding their clients through every twist and turn. Others seem to just show up, unlock a door, and collect a commission that could equal half a year’s salary for most working Americans.

A New Era: Commissions Are Now Negotiable

In 2024, a landmark shift occurred: The National Association of Realtors (NAR) reached a settlement that requires realtor commissions to be negotiated—not assumed or fixed. This means buyers are now empowered to have open conversations about what services they’re receiving and what they’re paying for.

This is no small thing. It marks a fundamental change in how homes are bought and sold. Buyers and sellers can now have more agency (pun intended) in determining the terms of the agreement, the scope of work, and, critically, the cost. It’s a move toward transparency—and one that allows for customization and accountability in a process that’s been historically opaque.

How Buyers Can Prepare

If you’re beginning your home search in 2025, here are a few things to consider before signing a buyer’s agent agreement:

  1. Do your homework. Understand how commissions work in your market. Ask friends, read articles, and talk to multiple agents.

  2. Interview multiple agents. Ask them about their services, negotiation strategies, and how they justify their commission. If someone bristles at the idea of negotiation, consider it a red flag.

  3. Request a breakdown of services. Not all agents offer the same level of support. Clarify what’s included—market analysis, home search, negotiations, contract support—and what’s not.

  4. Negotiate commission structure. You can propose a flat fee, a reduced percentage, or even performance-based compensation tied to successful negotiation outcomes.

  5. Consider alternative models. Tech-enabled brokerages and buyer rebate programs are increasingly common. These can reduce your costs and still offer valuable support.

 

 

The home you buy will be one of the most significant decisions—financially and emotionally—you make. As the industry shifts toward transparency and buyer empowerment, don’t shy away from asking the hard questions. You deserve a partner who’s invested in your outcome, not just your transaction.

And if you're anything like I was in those early months of parenthood—overwhelmed, exhausted, and trying to do what’s best for your family—just know this: you’re allowed to expect value for what you pay. Especially when it’s tens of thousands of dollars.