10 Questions Sellers Should Ask Their Agent About Commission Rates

The real estate world has seen significant changes resulting from the recent National Association of Realtors settlement agreement, which altered longstanding expectations about how real estate agents are paid commissions.

The settlement, which went into effect August 17, 2024, means that sellers are no longer required to pay buyer’s agent commissions. Instead, homebuyers and their agents have to negotiate with sellers and their seller’s agents and agree on a commission rate, or buyers must pay out of pocket. Additionally, seller’s agents can no longer mention sharing commission compensation with buyers’ agents in MLS listings.

Even though these changes started in August, the upheaval isn’t over. The Department of Justice filed a Statement of Interest on November 24, indicating that the settlement might need further clarification. Still, if you’re in the midst of selling a home, you likely want to know how this settlement affects you. Here are some questions to ask your real estate agent to get clarity.

How does the NAR settlement affect commission rates?

Even if you’ve familiarized yourself with the NAR settlement, it’s still a good idea to ask your realtor how the rulings will impact your home sale. In the past, sellers would pay commissions to their listing agent and the buyer’s agent. Now, buyers will have to negotiate their own commissions, which can increase competition.

Are there any new costs for home sellers due to the settlement?

Real estate agents usually represent buyers and sellers, so this new ruling could impact realtors’ income overall. As such, ask your agent if you will incur any new costs due to this settlement. For example, ask if you’ll have to pay for more out-of-pocket expenses, like staging, or give more concessions to buyers.

How can I ensure you and the buyer’s agent comply with the settlement?

It’s required by law that real estate agents follow these new rules. You can ask this question in a kind way, but ultimately, your goal is to ensure that your MLS listing complies with the latest requirements.

Read more: What is a pocket listing in real estate

Can you provide details of your sales commissions and the buyer’s agent’s commissions on your last five sales?

If you want to have a better understanding of what types of commissions your agent recently negotiated, ask if they would be willing to share data from their last five sales. This information can help you understand whether or not your agent negotiated effectively with buyer’s agents since the settlement went into effect.

Do you have testimonials or someone I can speak to who recently worked with you?

A real estate agent’s business is based on their reputation. Often, people get recommendations from friends and family members, but sometimes, you have to research agents yourself. If you’re new to an area or trying to decide between a few agents, ask them if they can provide references or testimonials of past customers. The key is to ask for recent clients so you can speak to people who have sold homes with them since the NAR settlement took effect.

Is there room for a discount on the seller’s commission rate?

Ask your real estate agent if they’re willing to negotiate on their own commission rates. Depending on the sale price of your home, negotiating a 0.5% or a 1% reduction on your own real estate agent’s commission could save you significant money.

What is included in your commission rate, such as marketing costs, staging, etc.?

It’s always a good idea to ask your real estate agent how they earn their commission and what is included. For example, some real estate agents include staging as part of their offer, while others don’t. Ask your agent whether or not they will pay for marketing or if they use free marketing tactics, like social media. This can give you a sense of how much work and expense an agent will put into selling your home effectively.

What happens if the buyer doesn’t have an agent?

It’s rare, but in light of the new settlement, some buyers might not want to hire an agent if it means they’ll have to pay commissions on their own. Ask your agent how they would handle this scenario and what they would recommend.

What common mistakes do sellers make when negotiating commissions?

This settlement went into effect in August 2024, so agents have had a few months to get used to negotiating offers. Ask your agent what mistakes sellers make when negotiating commissions with buyer’s agents. See if they have advice for you to navigate this new landscape or make your home more attractive to buyers.

How has the NAR settlement impacted the local real estate market?

Some real estate markets are more competitive than others. The purpose of the NAR settlement is to improve competition. Ask your real estate agent whether or not your home is in a desirable market. If it is, ask how you can leverage the increased demand in your favor to earn a larger profit. If it isn’t, ask your agent if they know of creative ways to entice buyers.

Extra tips for sellers

Here are a few additional tips for sellers to help you maximize your sale.

Don’t wait until the last minute

Ask your realtor about commission rates early in this process. This gives you time to compare agents and thoroughly research your options well before an agent lists your home on the market.

Be polite when you ask

It can be challenging to discuss money and commission rates. However, as long as you approach your realtor with respect, these conversations can go smoothly. Remember that real estate agents are adjusting to new laws, too, and asking them questions is an excellent way for both of you to learn.

Ask your community about rates

Reach out to friends, colleagues, or neighbors who have recently sold a home. Ask them what commissions they paid to the buyer’s agent and how the process went in light of the new laws.

Evaluate multiple agents

Before you commit to an agent to sell your house, interview several of them. Ask how they’ve implemented changes after the NAR law went into effect. Choose an agent that is experienced, transparent about fees, and willing to negotiate their commission rates.

Written by Billy Guteng. December 2, 2024

Billy is a content writer for Kukun. He was born in France, and has lived in multiple cities around the world ever since. He loves art, design and architecture as well as construction and real estate.