Up for Negotiation: Commission Fees 

More than half of recent sellers say they negotiated with their agent to lower the commission, according to new survey data from Zillow.

Key Points:

• Zillow’s annual report on sellers included a new section on negotiation this year — a key point of contention in the commissions cases.
• Of the sellers who did not negotiate, most said it was because they thought the requested commission was fair.
• The survey also found that people are spending less time in a home before selling, and fewer sellers are buying a home at the same time.

The ability to negotiate agent fees — a cornerstone of the buyer agent commissions cases — has been a hot topic over the past year.

While the National Association of Realtors has insisted that agent fees were always negotiable, plaintiffs in the commissions cases argued that many home sellers didn’t know they could negotiate, and a NAR report published in April confirmed that’s sometimes the case. Even among sellers who asked about fees, fewer than 20% succeeded in negotiating them, NAR found. 

But that may be changing. Zillow’s recent seller trends report suggests that plenty of negotiating is happening now.

Many Sellers Negotiated Lower Fees; Others Didn’t See a Need

More than half of sellers surveyed (51%) said they negotiated to lower commission fees, according to the report. The survey included responses from more than 6,200 sellers who had sold their primary residence in the past year. 

Of the sellers who did not negotiate, nearly two-thirds (64%) said it was because they thought the commission was fair — but more than a quarter (26%) said they didn’t know they could negotiate, and 14% said they weren’t comfortable negotiating fees.

Looking at the data as a whole, most sellers seem to understand the value their agent provides and believe compensation for their services is appropriate, said Amanda Pendleton, Zillow’s Home Trends Expert and senior communications manager.

“Nearly all sellers have already worked with an agent when they bought their property, so they understand all the work that goes into the real estate transaction,” Pendleton said in an email.

But after a year of exposure to commissions-related headlines, consumer awareness of agent pay has likely increased — which could lead to more frequent negotiation.

“If more buyers and sellers feel empowered to negotiate commissions, it just means agents should know the importance of showing their value early on and lay out all the services they provide,” Pendleton said.

What Types of Sellers Negotiate?

The report found that sellers who chose to negotiate were also twice as likely as non-negotiators to reach out to multiple agents.

A slight majority — 55% — of sellers who negotiated commission fees contacted more than one agent, while only 26% of those who didn’t negotiate shopped around.

Negotiators skewed younger — perhaps surprising, since they might have less experience selling a home — with a median age of 40, versus 48 for non-negotiators and 47 for sellers as a whole. 

They also tended to have higher incomes and sold their homes for more. Fewer negotiators were also buying a home, but of those who were, they were more likely to use the same agent for both the sale and purchase compared to non-negotiators.

Home Tenure on the Decline, and Fewer Are Also Buying

Zillow found that people aren’t staying in their homes as long. On average, sellers in 2024 lived in their homes for 12 years before selling. That’s down from 17 years in 2020 and 14 years in 2021.

Also on the decline: The percentage of sellers who are buying a home too. Compared to 2022, when the share of sellers buying a home reached a survey high of 71%, just 54% of sellers in the latest report were also buyers. 

So where did they live after selling? The most common reason sellers didn’t also buy was that they already owned another home (42%). But some chose a long-term rental (17%) or inherited a home (15%). Of those who were also buying, most (54%) sold first and bought later, but 31% were able to purchase their next home before selling. The remainder (14%) bought and sold around the same time. Those who were able to pull off that feat tended to be older — 50 and up — the survey found.

Source: Real Estate News

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