Imagine this: You’re sitting across from a new client, explaining your services, and then comes the dreaded question, “So… how do you get paid?”
For years, this was a conversation that most agents didn’t have to worry about. The MLS structure made commission discussions almost invisible to buyers, and sellers often agreed to industry norms without much debate. But today, the game has changed.
During a panel discussion at the #RealtyHack Summit, industry leaders gathered to share insights, and Grace Folias, Owner and Team Lead of Modern Approach Real Estate, with successful teams in both New York and Florida, made a striking observation:
“The biggest difference is that in both of those markets, we were always supposed to get buyer agreements signed, and most agents weren’t actually doing that.”
Wade Giles, an Austin-based agent of The Giles Group, noted that in Texas, a buyer representation agreement had long been the norm. This stark contrast highlighted a reality that many realtors across the country are now scrambling to adapt to, commission structures are shifting, and agents who don’t adjust will be left behind.
For decades, commission structures remained relatively predictable. Sellers agreed to a set percentage, which was split between the listing and buyer’s agents. Now, MLS systems no longer serve as binding agreements for commissions, forcing agents to negotiate their compensation directly, often in real time.
So, what does this mean for you as a real estate professional? It means that your ability to communicate your value, negotiate effectively, and set clear expectations with buyers and sellers will determine your success.
Understanding the Shift in Commission Structures
The real estate industry is experiencing a fundamental shift in how commissions are handled. With MLS no longer guaranteeing compensation, agents must now have direct and transparent conversations about fees—something that many in the industry have long avoided.
This shift has led to:
- A greater emphasis on buyer representation agreements to ensure agents are compensated for their time and expertise.
- More negotiation between agents, buyers, and sellers on commission terms, often on a case-by-case basis.
- The need for stronger communication skills to educate clients on why commissions matter and what they pay for.
Agents who embrace these changes will remain competitive, while those who resist will likely struggle in an environment where transparency and negotiation skills are key.
Why Buyer Representation Agreements Are No Longer Optional
If there’s one thing that has become clear in today’s real estate market, it’s that buyer representation agreements are now essential.
In some states, these agreements have been standard for years. However, for many agents—especially outside of Texas, this is a major cultural shift.
Many realtors hesitate to introduce buyer agreements because they worry it will scare clients away. Some fear that buyers will feel pressured or locked into a contract, potentially driving them to another agent.
But as Grace Folias pointed out in the discussion, realtors have never had an issue securing listing agreements.
“We had no problem getting that signed on a listing appointment. So why are we having this pressure and nervousness around getting a buyer agreement signed? It’s the same thing—you’re locking yourself into a term, a price, your commission, and working exclusively with them for a period of time.”
Here’s why buyer representation agreements are critical in today’s real estate market:
- They set clear expectations upfront – Buyers understand the agent’s role and what services they’re receiving.
- They guarantee agent compensation – No more uncertainty about whether an agent will get paid.
- They strengthen the agent-client relationship – Buyers see agents as trusted advisors, not just door-openers.
Without a signed agreement, agents risk spending hours—or even weeks—working with buyers who may ultimately purchase through another agent or directly from a seller. In an industry where time is money, this is no longer a risk worth taking.
Navigating Seller Conversations in the New Commission Model
While buyer agreements are one side of the equation, listing agents also face new challenges when discussing commissions with sellers.
Many sellers now assume they can reduce or eliminate the buyer’s agent commission entirely. This is particularly true in markets where inventory is high and competition is fierce.
During the panel discussion, Wade Giles explained how he approaches these conversations:
“I tell my sellers, ‘It’s recommended that you be prepared to offer something, but we don’t have to set that in stone right now.’ I make sure they understand the reality—if they don’t offer competitive compensation, they may receive fewer offers or face longer days on market.”
How to Educate Sellers on Commission Strategy
1️⃣ Show them the data – Provide market comparisons that highlight how commission offerings impact time on market and final sale price.
2️⃣ Explain the competitive advantage – Homes that offer competitive buyer commissions tend to attract more interest and stronger offers.
3️⃣ Position commissions as an investment – Sellers should see commissions as a tool for maximizing their final proceeds, not just an expense.
Ultimately, market conditions dictate seller flexibility. While some sellers may initially refuse to offer a competitive commission, reality often forces them to adjust when their property sits unsold for months.
Why Agents Must Master the Art of Negotiation
With commissions now a matter of direct negotiation, agents must become stronger negotiators than ever before. Gone are the days when a standard commission was assumed—today’s agents must actively justify their fees.
During the discussion, Grace Folias shared a real-world example of how negotiation plays a crucial role:
“I just got an offer accepted this morning. The seller initially wanted to pay less commission, but my buyer agency agreement stated my fee. I submitted a strong offer with the commission included, and the seller accepted it.”
How to Strengthen Your Commission Negotiation Skills
✅ Be transparent – Address commission discussions early, ensuring there are no surprises.
✅ Communicate your value – Clearly explain the expertise, market knowledge, and resources you bring to the table.
✅ Negotiate strategically – When faced with resistance, structure offers in a way that makes sense for both buyers and sellers.
The ability to negotiate is now a critical skill for every successful agent. The most successful agents won’t just accept whatever is offered, they’ll advocate for their worth.
The Future of Real Estate Commissions: How Realtors Can Adapt and Thrive
The real estate industry is evolving, and agents who fail to adapt will be left behind.
To succeed in this new era of commission structures, realtors must:
🚀 Use buyer representation agreements to protect their time and ensure fair compensation.
🚀 Educate sellers on commission strategies to help them understand the benefits of offering a competitive rate.
🚀 Master the art of negotiation to secure fair fees while still closing deals efficiently.
🚀 Clearly communicate their value to buyers and sellers to reinforce the importance of their expertise.
This shift is an opportunity for top-performing agents to differentiate themselves. Those who embrace transparent communication, negotiation, and structured agreements will thrive—while those who resist may find themselves struggling in an increasingly competitive landscape.
Want More Insights? Listen to the Full Podcast Episode
The full discussion between Grace Folias and Wade Giles dives even deeper into the real estate commission evolution. They share practical tips, negotiation strategies, and real-world insights that every agent should know.
🎧 Listen to the full episode now to gain the knowledge you need to succeed in this changing market.
Connect With Grace Folias
- Modern Approach Real Estate Website
- Modern Approach Realtors YouTube Channel
- Modern Approach Team at Real Brokerage Instagram
- Modern Approach Realtors Facebook Page
Connect with Wade Giles
Sign up for my newsletter and get updated for the next #RealtyHack!
To listen to more of our podcast episodes, visit The #RealtyHack Podcast Page. The #RealtyHack Podcast is also available to listen to on Spotify, Google Podcasts, Apple Music, and your other favorite podcast directories.