Real Estate Compensation Choices for Bay Area Sellers

By Laxmi Penupothula, REALTOR® · Intero Real Estate Services · CA DRE #02047105

If you are preparing to sell, you can discuss compensation openly with your listing agent. Ask what services are included, what you would pay and when payment is due. Real estate commissions are negotiable. They were negotiable before the 2024 practice changes as well, and no rate is standard or required.

Separate the different agreements

Your listing agreement addresses your arrangement with your brokerage. A buyer negotiates their own representation and compensation with their buyer’s agent. That buyer may ask you to pay some or all of the agreed amount. You can accept or decline. Review the request as part of the offer; do not assume every seller must provide the same amount.

The California DRE consumer alert explains the buyer’s agreement and the option to request seller payment. Get the amount and payment instructions documented clearly rather than relying on a verbal understanding. A buyer’s agent also cannot receive more than the buyer’s written agreement allows for those services.

What changed about the MLS

Under the NAR practice changes, offers of buyer-broker compensation cannot be made through the MLS. With seller approval, a listing broker can still communicate an offer off the MLS. General seller concessions are different, and an MLS concession cannot be conditioned on payment to a buyer’s broker. Confirm the local MLS rules before entering any incentive language. See the NAR explanation.

Compare the amount you would keep

For each offer, ask for a written estimate showing the proposed sale price, any buyer-broker payment you agree to make, other credits and your remaining sale costs. Review contingencies and timing alongside the numbers.

A request for seller payment does not by itself make an offer good or bad. The question is how its full terms compare with your alternatives and moving plans. Ask whether the proposed amount and payment method match the signed agreements.

Questions for your listing consultation

• Which services are included in the listing proposal?
• What compensation am I agreeing to and when is it due?
• How will requests for buyer-broker payment be presented to me?
• How will each offer’s costs appear on my net sheet?
• Which questions should my attorney, lender or escrow officer answer?

Seller credits and buyer-broker compensation can be treated differently by a lender, so keep them identified separately and ask the buyer’s lender how each will be handled. Calling a payment a “credit” does not by itself make it permissible under a loan program. For how credits compare with price reductions, see seller concessions vs price cuts.

Fee reductions and rebates are different

A reduced brokerage fee lowers what is agreed to be paid for services. A commission rebate returns part of an agent’s compensation to a client, for example toward eligible closing costs. They are separate arrangements, and either must be documented in writing.

In a listing consultation, my role is to explain my services and help you compare your selling options. I am open to negotiated fees, flat-fee arrangements and, for buyers, commission rebates toward eligible closing costs. Availability depends on the transaction, brokerage approval, lender requirements and written terms. Buyers who want to discuss representation fees or closing-cost credits can contact me here. For the buyer side, see our California buyer-agent compensation article.

Compare your selling options

Compare your selling options before you decide. Share your property address and timeline so we can discuss pricing, preparation and offer terms for your home.

Laxmi Penupothula, REALTOR® · Intero Real Estate Services · CA DRE #02047105 · 510-493-1955

Sources

• California DRE Consumer Alert: Changes to Buyer Representation and Compensation
• NAR: Compensation, Commission and Concessions

General educational information, not legal, tax or lending advice. Terms, eligibility and outcomes depend on the property and transaction. Confirm transaction-specific questions with your broker, lender, escrow officer or attorney.