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NAR Reports

How consumers are negotiating real estate commissions and fees in 2016

(REAL ESTATE NEWS) Do consumers firmly grasp that real estate commissions are negotiable? Are flat fee services widespread or limited in scope? Find out in this year’s report.


This summer, the National Association of Realtors (NAR) surveyed 5,465 home buyers and sellers for the 2016 National Association of Realtors® Profile of Home Buyers and Sellers. The study shows that in the past five years, affordability has tightened, and the time spent home shopping has fallen.

We all know that commission rates are negotiable, but do consumers? How are agents being compensated in 2016? Let’s dig a bit deeper.

How agents were paid in 2016

The majority (77 percent) were paid by the seller, and 72 percent were paid as a percent of the sales price. But with so many brokerage models at play today, other compensation methods were used.

Some (12 percent) were paid by the buyer and seller, some by the buyer only (6.0 percent), and some by flat fee (2.0 percent).

Although some respondents had no idea how their agent was paid and several cited “other” ways, less than one percent were paid a “per task” fee.

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Negotiating commissions

Many consumers know that commissions are negotiable. Some bring it up, others learn that from their agent, while others ask to negotiate and an agent is able to defend why they are worth the percentage they are charging. Here’s a breakdown:

  • 48 percent of the time, the agent initiated discussion of compensation.
  • 22 percent of the time, the client brought up the topic and the agent was able and willing to negotiate their commission or fee.
  • 14 percent of the time, the client did not know commissions and fees could be negotiated.
  • 11 percent of the time, the client did know commissions and fees could be negotiated but did not bring up the topic.
  • 6.0 percent of the time, the client brought up the topic and the agent was unwilling or unable to negotiate their commission or fee.

The takeaway

The idea of a brokerage model being set in stone is aged, and consumers are getting accustomed to the diversity of offerings and have a firm understanding that commissions are negotiable. While trends locally are still the most relevant to any broker or agent’s career, knowing the national trends can help pinpoint adjustments that should be made locally, or affirm decisions already being made.

The practice of real estate is changing given these rapidly altered circumstances surrounding home buyers and sellers, and it is important to be informed!

Click here for hundreds of other stats from this report.


Lani is the COO and News Director at The American Genius, has co-authored a book, co-founded BASHH, Austin Digital Jobs, Remote Digital Jobs, and is a seasoned business writer and editorialist with a penchant for the irreverent.


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