MW I'm selling my $1 million home. Will my agent really charge less than a 6% commission?
By Quentin Fottrell
'I haven't bought or sold property since the National Association of Realtors ruling that decoupled buyer's and seller's agent commissions'
"I have not bought or sold property since the legal ruling on real-estate agent fees not being split with the buyer's agent." (Photo subjects are models.)
Dear Quentin,
I'm selling my house on Maui - valued at roughly $1 million, mostly on the strength of the location. I haven't bought or sold property since the National Association of Realtors ruling that decoupled buyer's and seller's agent commissions. What are sellers typically paying now? Am I likely to pay less than 6%?
House Seller
Related: 'It's a perilous choice': I've been offered a part-time job. Do I file for Social Security at 67 or 70?
You can email The Moneyist with any financial and ethical questions at qfottrell@marketwatch.com. The Moneyist regrets he cannot reply to questions individually.
The new law was designed to reduce the total commission to between 2.5% and 4%, but in reality you can still expect to pay 5% or more.
Dear Seller,
You are living in a financial paradox.
Little has changed for buyers and sellers, despite rules introduced in 2024 designed to finally upend the traditional 6% real-estate commission model. They were introduced as part of an antitrust settlement with the National Association of Realtors (NAR) designed to make commissions more flexible, transparent and negotiable - in theory, anyway. That fixed fee has evolved into a system designed to give both buyers and sellers greater control over how much they are required to pay agents.
Most sellers, however, will be lucky to pay less than 6%, although some full-service transactions are negotiated closer to 4% to 5%, depending on the brokerage and property. A $1 million home should give you leverage. Research suggests, however, that you can still expect to pay around 5.5% commission to your agent if you're selling a house in Hawaii, despite the supposedly sweeping changes made to federal law that provide for more flexibility for negotiation on that sticky 6% commission.
The 6% commission was traditionally split between the listing agent and the buyer's agent. That no longer happens automatically: Multiple Listing Services rules have changed so that compensation for buyers' agents is no longer required to be offered through listings. Members of the NAR must enter into formal written agreements with buyers before showing homes. This puts more agency into the hands of sellers, who have the choice to only compensate their own listing agent and not the buyer's agent.
The change in practices
The new rule was designed to reduce the total commission to between 2.5% and 4% - however, there is no mandated or target range. Commissions remain fully negotiable and market-driven, but in reality you can still expect to pay 5% or more. Your ability to negotiate will depend on where you live and the kind of house you are selling (that is, the size of commission on offer even at a reduced percentage rate). The effects of the new law have not been as dramatic as homesellers like you had hoped.
However, home buyers and sellers say real estate agents are still keeping commissions high. Critics allege that some agents and brokerages exploit loopholes - including steering buyers away from homes offering lower commissions to agents. At the same time, the market remains challenging for buyers. As the NAR itself states: "You will be asked to sign a written buyer agreement after you've chosen the professional you want to work with" - often before touring properties.
A Federal Reserve paper published last year found substantial and arbitrary variation in agent commissions across metropolitan areas. At the same time, the authors said that technological innovations such as Zillow (Z) and Redfin did not dramatically reduce commissions, despite making property information more accessible to consumers. The paper also found that state laws, like those banning commission rebates, did not significantly change rates. This suggests that new rules alone are not enough to change long-in-the-tooth practices in real estate.
Critics allege that some agents and brokerages exploit loopholes - including steering buyers away from homes offering lower commissions to agents.
Instead, commission rates are beholden to industry norms - expectations that agents, buyers and sellers follow. Sellers themselves may not choose to lower commission rates because they worry their home may receive less attention from buyers' agents. If a listing offers a lower commission, agents too may be less motivated to show that property to clients, which could reduce the number of potential buyers and hurt the final sale price, despite the growing number of discount and flat-fee brokerage models.
Another complicating factor: Maui is a buyer's market, so sellers have less room to negotiate with agents and buyers. With mortgage rates still hovering above 6% and geopolitical tensions creating uncertainty among consumers, prices have fallen and inventory has risen. Properties are spending an average of 130 days or more on the market before closing, indicative of a softer market. In this environment, you would arguably have less - not more - leverage to negotiate your agent's commission.
In his April 2026 report, Evan Harlow, a Maui real-estate agent, wrote that the market was poised to benefit from expected rate cuts and momentum, but since the beginning of the war in Iran, "demand has dropped noticeably, and many buyers are taking a wait-and-see approach. Whether this has a short-term or longer-term impact on the real estate market is yet to be determined. The market continues to favor buyers, and there are certainly buyers out there taking advantage of the situation."
Fear of lower fees
This financial paradox - practices remaining largely untouched by the new rules - stems partly from a cycle of fear and anxiety around maximising eyeballs and price, and from habits that are hard to change. Agents may also worry that lower fees send the wrong signal: that a property is unloved, lacks demand or harbors hidden flaws - the kind of perceptions that can help scupper a sale. A more practical concern: reduced commissions can make it harder to bring other agents to the table.
Anecdotal evidence from inside the industry suggests you will have to pay near 6%. One real-estate broker who is a member of the Moneyist Facebook (META) Group is less optimistic about any significant reduction in commission rates. "That lawsuit essentially did nothing but add more paperwork. Essentially if you want to sell your house and be protected as much as possible, you'll pay 5%-6%, usually split between your agent and the buyer's agent," she wrote.
Some sellers ultimately agree to the "old" commission rates, hoping it will help them secure a higher price for their home - though critics argue this reflects pressure from a powerful real-estate ecosystem resistant to change. "Most buyers don't have the capital to pay for their own agent on top of their down payment, closing costs, inspection, and appraisal fees," the real estate broker added. "The seller is usually the one receiving the money, while the buyer is the one spending it."
That dynamic provides more momentum for a 6% fee.
Don't miss: 'The numbers don't lie': If I had invested my Social Security in the S&P 500 I'd have $4 million. Is the system broken?
More columns from Quentin Fottrell:
'We're all worried the honey pot will run dry': Does the U.S. government borrow from my Social Security to fund federal programs?
'There is an imbalance of power': My husband has cancer. Why must we wait two hours for a 10-minute CT scan?
'I hope to retire early': I'm 56 and have 80% in a traditional IRA and 20% in a Roth. Am I in trouble?
'I'm very late to the game': I'm 48, earn $65,000, have $48,000 in debt and no retirement. Am I doomed?
Check out The Moneyist's private Facebook group, where members help answer life's thorniest money issues. Post your questions, or weigh in on the latest Moneyist columns.
By emailing your questions to The Moneyist or posting your dilemmas on The Moneyist Facebook group, you agree to have them published anonymously on MarketWatch.
By submitting your story to Dow Jones & Co., the publisher of MarketWatch, you understand and agree that we may use your story, or versions of it, in all media and platforms, including via third parties.
-Quentin Fottrell
This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
May 21, 2026 19:00 ET (23:00 GMT)
Copyright (c) 2026 Dow Jones & Company, Inc.
Comments