Jim Xiao paid a stable expense agent of $ 10,000 to help him buy a house in Evans, Georgia, last year. Here, Xiao and her children play football in their new house.
Jim Xiao
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Jim Xiao
For a long time, the purchase and sale of a house in the United States have generally gone like this: the seller would pay a commission which would be divided by the agents of the buyer and the seller, often totaling 5% to 6% of the sale price.
The predictability of this structure cost a cost: large costs for agents at each transaction. To the high price of housing prices, agent fees can be added to tens of thousands of dollars on a single sale.
For people like Jim Xiao, it was too much. “It seemed that the fees of the real estate agent had always been essentially a fixed amount expected. When you tried to negotiate, you were simply said, no, that is our rate,” he said.
But the rules of the game changed, after the powerful national association of real estate agents settled a prosecution in August, accepting new policies on how the agents are compensated. The trial was brought by a group of sellers of Missouri houses who argued that the association’s rules forced them to pay excessive costs.
Xiao says that he first had the frustrations of the old rules in 2023 when he helped his parents buy two houses in Augusta, Georgia, without agent of the buyer. The houses were a new construction, and Xiao tried to negotiate a credit equal to 2.5% which generally went to the buyer’s agent, because he did not use it. But in vain – the inscribing agent pocketed the Complete commission of 5%.
Xiao is a lawyer, and he thinks that the commission system gives the buyer’s agent the bad incentive: the higher the price, the more money they earn. “It seems completely completely back,” says Xiao. “Your agent should represent you and try to help you get the best possible offer.”
So when it came time to sell your condo and buy a new home for your family last year, Xiao decided to do things differently. He found an agent who would accept a 1.5% commission to sell his condo, and a $ 10,000 dish to help him buy a new home.
The new rules could shake up the grip of real estate agents on the structure of the commission
Accords like that of Xiao could become more common because the new rules inaugurate some major changes on a national scale.
Among them: agents must inform buyers and sellers that their costs are negotiable.
Buyers must sign an agreement with their agent establishing how their agent will be paid – including the possibility that if the seller will not pay the buyer’s agent, the buyer will.
And finally, agent compensation offers can no longer appear on online databases called multiple registration services, or MLS, which are used to list the houses.
These new rules have created an opening for brokerage houses that charge luggage costs.
A development of housing in Middlesex, Pennsylvania, was presented in March 2024.
Gene J. Puskar / AP / AP
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Gene J. Puskar / AP / AP
“Buyers of houses and sellers almost have the impression of being trapped in the use of agents, rather than hiring agents at reasonable prices,” explains Rob Luecke, CEO of Shopprop Realty, a flat brokerage house that operates in nine states.
Luecke says that his goal is to eliminate the commissions – or at least make them much lower “and put the current in the house buyer and the sellers where he really has to be.”
For high -end houses, potential savings are breathtaking. Shopprop represented a buyer who bought a house of $ 10.2 million in the country’s most expensive postal code in Atherton, California.
The buyer’s agent can generally pocket a 2.5%, or $ 255,000 commission on this sale. But instead, the buyer himself recovered most of this money, in the form of a discount for $ 247,000 – and paid stable costs of $ 7,995 to Shopprop.
“This customer was so happy,” said Luecke, whom he gave Shopprop a bonus of $ 1,000 on the agreement.
Package agents compared to agents based on the commission
LUECKE claims that shopprop activities have increased by around 26% per year, on average.
Since Shopprop is much less on each individual sale than a traditional brokerage house, their company is oriented towards volume. This means some limits: its “Full Service” package for home sellers includes only two open days. A more frequented “concierge” service provides a dedicated agent who can coordinate tasks, including repairs, staging and cleaning. SHOPPROP also offers services, such as registration on MLS, at all costs at all.
But traditional real estate agents based on the commission say that their higher costs are worth it, because they provide a level of service and a localized expertise that flat -back brokers do not offer. They must also share part of their costs with their brokerage company, reducing their individual profits.
Leanne Liang is a Redfin agent in the East Bay region outside San Francisco, where there are a lot of “micro-sealed” accommodation even in a municipality, she says: “If you move half a long distance, it is a completely different market. I therefore think that buyers can really benefit from experienced agents.”
She suggests that potential buyers and sellers should interview agents in traditional and flat brokerage houses, and see what feels comfortable.
Selling a house on the difficult market today, it says: “It is not only a question of putting a house on the MLS and waiting for the offers to enter. In a difficult market, I think that we, as an agents, really work for our pay checks.”
So far, broker costs have not changed much
Despite the new rules, the commissions have not changed too much since the regulations entered into force nine months ago. New Redfin data on the basis of thousands of transactions show that the buyer’s agents’ commissions reached an average of 2.4% in the first quarter of the year – which is slightly higher compared to the time when the new rules have taken effect, but a little compared to the previous year. (The data is based on sales of Redfin agents lists, as well as offers referred to partner agents, or in which a buyer has used Bay Equity home loans, which belongs to Redfin.)
Among the houses at higher prices, however, the commissions of the buyer’s agents have dropped. Houses at a price between $ 500,000 and $ 999,999 9999 999 increased to the average commissions of 2.42% in the first quarter from 2023 to 2.29% in the same part of this year. And for houses greater than $ 1 million, the decline is even greater: 2.36% in the first quarter from 2023 to 2.17% in the same period of 2025.
Xiao says he understands the concern that if you hire a low -cost agent, they can be barely minimum. “But throughout the process, she was great,” he said about the real estate agent with whom he worked, who operates his own brokerage house. “She has done everything, if not more, compared to what other real estate agents had done in the past.”
And by paying for his agent a fixed rate allowed him to $ 14,000 when he bought his house – money he could pay at closing costs.
Xiao says you don’t need to be a lawyer as he had to get a better deal: “I think you really have to really informed all consumers and having the confidence to say:” Hey, there are other options. “”
