Negotiating Real Estate Agent and Broker Fees

When it comes to fees, you’ll want to know how much to negotiate and what the starting point is. The starting fee for an agent is 7.5%, but a large portion of that goes to the brokerage. This leaves less negotiating room than you might think, and some brokerages don’t even allow agents to take less than 15%.


The first step in negotiating real estate agent and broker fees is to understand how the real estate industry works. While commissions and fees vary from market to market, they’re almost always negotiable. Realtors are generally paid a commission based on the sale price of the home they’re representing. The more expensive the home, the higher the commission will be. Regardless of the size of the commission, it’s always a good idea to shop around before selecting a real estate agent or broker.

If you’ve worked with an agent before, ask them about their commission rate. If the agent is an industry veteran, he or she should be willing to negotiate for a lower commission. While the agent’s commission may seem steep, remember that the buyer’s agent also earns a commission based on the price of the property.

Split commissions

Traditional split commissions are appropriate for full-service brokerages with fewer than 10 agents. Agents who earn higher commissions get more of it, and brokers have an incentive to retain these top agents. A traditional split system also avoids the difficulty of agent billing. Alternatively, some brokerages offer a graduated commission split system, which allows agents to earn more commissions as they hit milestones.

Typically, a split commission between real estate agent and broker fees is 50/50, 60/40, or 70/30. The percentage will vary depending on the workload of each agent. Some brokerages offer a 100/0% commission split to agents, while others charge more per transaction or per month.

Office space

A recent ruling from the Department of State clarifies the legality of broker and agent fees. This clarification prohibits brokers from asking prospective tenants to pay their broker’s commission. Traditionally, the fee has been passed on to the landlord and tenant, but in the new DOS guidance, this won’t be possible. Brokers will still have to pay a fee to help their clients find homes.

Real estate brokers charge their agents a commission, usually in the form of a 50/50 split. These agents also receive office space, materials to market their listings, and leads from other agents. The broker’s fees vary, depending on the number of hours the agent spends working and training.

Administrative costs

Real estate agents and brokers charge buyers and sellers administrative costs (Admin Fees) at the closing of a transaction. These fees can range from $150 to $700 and are charged in addition to commissions. These fees help the broker cover the administrative costs of running the agency, which include advertising, office expenses, and equipment. The brokerage can also choose to waive or deduct these fees from its commission, resulting in a higher pretax profit.

The amount of administrative costs varies greatly from brokerage to brokerage. These costs depend on the number of employees, the size of the brokerage, and benefits provided. For example, some brokerages will cover the costs of office space and supplies, while others will provide marketing support to help the agents.


Real estate agents charge their clients a fee to represent them in real estate transactions. This fee is usually equal to a minimum of a month’s rent, but can be more. In high-demand cities such as Boston and Chicago, these fees are usually covered by the landlord. In other cases, the seller or renter pays the broker’s fee. In any case, these fees are a cost that should be factored into the price of a home or apartment.

The Department of State has a checklist for real estate agents that includes several common pitfalls that agents should avoid when advertising their real estate services. These rules are meant to help real estate agents stay within the law, avoid discipline, and protect the public from false and misleading advertising. Though the checklist isn’t comprehensive, it covers most common problems.

Del Aria Team
T25SA, 3975 Fair Ridge Dr, Fairfax, VA 22033
(703) 499-0111