From Rebates to Flat Fees: How Savvy Buyers Are Cutting Real Estate Costs

For decades, buying or selling a home meant paying a standard 6% commission split between the listing agent and the buyer’s agent. That model is starting to crack.

A landmark settlement in August 2024 reshaped the rules, opening the door for buyers and sellers to negotiate how — and how much — they pay in commissions.

Some homebuyers are now pocketing thousands by skipping traditional agents or using rebate and flat-fee services. 

Just the same, sellers are finding ways to keep more of their sale proceeds without sacrificing exposure or professional support.

The Shift in Real Estate Commissions

The 2024 National Association of Realtors (NAR) settlement aimed to increase transparency and end the long-standing practice of sellers being required to pay the buyer’s agent.

Key changes include:

• Sellers are no longer obligated to pay the buyer’s agent
• Buyers and sellers can negotiate their own agent fees
• Broker fees are not set by law and are fully negotiable

Sellers can still cover the buyer’s agent commission if they choose, but they are not required to do so. This shift has led to a surge in commission discussions between clients and agents.

Why Some Buyers Are Going Agent-Free

Some buyers who previously used traditional real estate agents have now turned to alternative models that allow them to keep a portion of the commission for themselves.

One approach involves hiring a company that handles contracts and negotiations while giving the buyer up to 50% of the commission back. In these cases:

• The seller still pays agent commissions
• The buyer splits their agent’s portion at closing
• The buyer benefits from experienced negotiation without paying a traditional commission

This model appeals to those who want professional representation but also want to share in the commission savings.

Commissions Are Still Common (But More Negotiable)

Despite the new rules, commissions remain steady overall. 

In fact, data from major brokerages shows that commissions paid to buyer’s agents are slightly higher than before the rule change. A slowing housing market has prompted some sellers to offer higher commissions to attract buyers.

However, buyers and sellers are becoming more aware of their options:

• More sellers are countering with lower commission rates
• Some buyers are staying firm on paying less
• Alternative models are gaining traction

Flat Fees as a Competitive Advantage

In high-price markets, even small commission changes can mean big savings.

One strategy gaining popularity is hiring an agent who works for a flat fee instead of the standard percentage. 

For example, instead of paying a 3% commission on a multi-million-dollar home, the buyer pays a set amount — such as $15,000 — regardless of the purchase price.

Benefits of this approach include:

• Lower costs for the buyer
• A more appealing offer for the seller, since they keep more of the sale price
• The ability to save tens of thousands compared to traditional commission rates

This can make an offer more competitive, especially when sellers are motivated to maximize their net proceeds.

Buyer’s Rebates: A Legal Option in Most States

Forty-two states and Washington, D.C., allow buyer’s agents to offer cash rebates. This means agents can give part of their commission back to the buyer at closing.

A typical scenario looks like this:

• The buyer hires an agent who agrees to work for a flat fee
• The agent returns a portion of their commission to the buyer after the sale
• The buyer enjoys both professional representation and a substantial rebate

This option works well for experienced buyers who value service but also want to share in the commission savings.

When Sellers Save on Both Sides

The savings are not limited to buyers. Sellers who take a more hands-on approach can also keep more from the transaction.

Some sellers are using flat-fee listing services that place their property on multiple listing services for a set price, sometimes as low as $1,000. These services often include MLS exposure but leave marketing and showings to the seller.

A do-it-yourself approach can involve:

• Taking your own listing photos and videos
• Marketing the property directly to buyers
• Accepting offers from buyers without agents

In cases where neither party hires a traditional agent, the 6% commission is eliminated entirely, leading to significant savings.

How to Reduce Real Estate Costs

If you are considering buying or selling, there are several strategies to cut costs while still getting the expertise you need.

1. Negotiate the Commission

The new rules allow flexibility. You can:

• Ask your agent to reduce their percentage
• Offer a flat fee instead of a percentage
• Request a rebate on closing

2. Explore Flat-Fee Brokerages

These brokerages charge a set amount rather than a percentage of the sale price. They often:

• Handle paperwork and negotiations
• List your property on MLS
• Offer optional add-on services

3. Consider Going Agent-Free

If you are comfortable handling the process, you can:

• Use online listing platforms
• Hire a real estate attorney for contracts
• Manage showings and negotiations yourself

4. Use a Hybrid Model

Work with a service that offers limited support for a reduced fee. Examples include:

• Contract review only
• Negotiation assistance without marketing
• MLS listing without full representation

The New Reality in Real Estate

The traditional 6% commission is no longer the automatic starting point in real estate transactions. While many buyers and sellers still choose full-service agents, the awareness of negotiable fees is prompting more to explore other models.

The potential savings are significant:

• Buyer’s rebates can return thousands at closing
• Flat-fee agents can cost a fraction of standard commissions
• DIY and hybrid approaches can eliminate commissions entirely

The changes require more involvement from buyers and sellers, but they also open new possibilities for keeping more money in your pocket.

For sellers who want to skip the realtor process entirely, companies like House Buyers of America offer a quick and convenient option. These services purchase homes directly, removing the need for showings, listings, and traditional commissions while allowing sellers to close on their timeline.