Real estate commissions are one of the largest transaction costs when buying or selling a home. Understanding how they work — and your options to reduce them — can save you thousands.
How Traditional Commission Works
Traditionally, the seller pays a total commission of 5-6% of the sale price, split between the listing agent and buyer's agent. On a $1 million home, that's $50,000-$60,000 — often the largest single cost of selling.
The 2024 NAR Settlement Changed Things
The 2024 NAR settlement changed commission rules. Buyer's agent compensation is no longer automatically offered through the MLS. Buyers may need to negotiate and potentially pay their agent directly. This makes buyer rebates from companies like ShopProp even more valuable.
How to Pay Less as a Seller
Options: 1) Use a flat fee brokerage like ShopProp (from $1,995 MLS-Only or $4,995 full service vs 2.5-3%). 2) Negotiate with your agent. 3) Consider MLS-only listing if you're comfortable handling showings. 4) Don't overpay on the buyer's agent commission offer.
How to Pay Less as a Buyer
Options: 1) Use a rebate brokerage like ShopProp (capped fees of $1,995-$7,995). 2) Negotiate a rebate with your agent. 3) In the new post-settlement world, shop around — agents may compete on price more than before.
As Featured In
"ShopProp saved one buyer $247,000 on a $10.5M Atherton home."
— NPR Morning Edition, May 21, 2025
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Frequently Asked Questions
Who pays real estate commission?
Traditionally, sellers pay commission that's split between listing and buyer's agents. After the 2024 NAR settlement, buyers may increasingly pay their agents directly, making rebates more important.
What is the average real estate commission?
Traditional commissions run 5-6% total (split between agents). Flat fee alternatives like ShopProp charge sellers from $1,995 (MLS-Only) or $4,995 (full service) and buyers $1,995-$7,995 regardless of home price.
Can I negotiate real estate commission?
Yes. Commission rates are always negotiable. You can also choose a flat fee brokerage like ShopProp that offers lower rates upfront.
How do buyer rebates affect commission?
With a buyer rebate, your agent shares part of their commission with you. ShopProp's capped fee model means buyers keep the commission above $1,995-$7,995 — often $10,000-$50,000+ on expensive homes.
Ready to Save on Your Real Estate Transaction?
ShopProp offers the biggest buyer rebates and lowest seller fees with managing broker oversight on every transaction. Contact us for a free consultation.