How to Confidently Defend Your Real Estate Commission
Clients asking you to cut your commissions isn’t new, but what do you say when they use your commission as a negotiation tactic in their offer?
In real estate, commission objections are par for the course. But what happens when both agents are asked to cut their commission at the 11th hour, even after signing agreements stating your fee?
You thought you had your commission locked in, but your seller now thinks it’s a negotiation strategy. How do you handle the twist with professionalism, confidence, and without feeling like you just rolled over? Let’s break down a real scenario and walk through the best approach to handle it.
Related reading: The Future of Real Estate Commissions: Why They Might Actually Increase
The Scenario:
One of our POWER AGENTS® recently received an offer from another broker on a listing she had been marketing for a while. The seller said they would accept the offer if both agents agreed to reduce their commissions from 3% to 2.5% each. At the last minute, she was caught off guard and wanted to know how to handle this situation more effectively in the future.
Step 1: Identify the Real Issue
The best way to get to the heart of the issue is to ask a lot of questions about why they are making this request. In our POWER AGENT’S® case, the home was listed at $389,000, and the offer came in at $350,000—the maximum amount the buyer was qualified for. The seller wasn’t necessarily unhappy with the agent’s work; they were simply looking for ways to make the deal happen and get a little more for their home. That’s an important distinction that we should make to understand how to address this issue.
Once this is established, the next step is to reframe the discussion around what the seller actually needs:
“So, if I understand correctly, what you’re really looking for is to net an additional $3,500. Is that right?”
Putting it in concrete numbers helps move the conversation toward problem-solving rather than focusing solely on commissions.
Step 2: Exhaust All Other Options First
Rather than immediately agreeing to cut commissions, the first move should be to see if the buyer can increase their offer. Even though they were pre-qualified for $350,000, there might be other solutions available:
- Talk to the Buyer’s Agent – Without discussing commission, tell them that the seller needs an additional $3,500 to accept the deal. The buyer might have additional funds, gift money from family, or flexibility elsewhere.
- Consult the Loan Officer – The buyer may qualify for a slightly higher loan amount.
- Look at Closing Costs – Perhaps the buyer can contribute more toward closing costs to free up cash for the purchase.
- Creative Financing – Explore whether there are other financing solutions that could bridge the gap.
Your approach here is crucial: make every effort to secure the additional $3,500 from the buyer before ever considering commission cuts.
Related reading: Your Irreplaceable Value: How Real Estate Agents Earn Their Commissions
Step 3: If It Comes Down to Commission
Let’s say the buyer’s agent returns and can only secure an additional $2,500. Now, the seller is just $1,000 short. Here’s what to do next:
“Mr. and Mrs. Hunna Hunna, right now, your house is essentially sold at $352,500. If you decline this offer over $1,000, you’re effectively buying your own house back at that amount. Are you prepared to do that?”
This analogy shifts the seller’s perspective. Instead of feeling like they’re “losing” $1,000, they start to see it as the cost of keeping the house.
You can also say something like this:
“Let me ask you something—if someone asked you to take a pay cut after you already agreed on a salary, how would that make you feel? Would you be just as motivated to give 110%? Probably not, right? Because cutting someone’s pay isn’t just about money—it’s about respect for their time, effort, and expertise. Now, here’s what concerns me: If an agent is willing to take a cut, where else might they be cutting corners in their service to you? What are they not telling you? See, Mr. Hunna Hunna, you hired me to market your home, and we brought in the entire real estate community to help sell it. We’ve done the job—you’re at the finish line. And now, instead of being rewarded for getting you here, we’re being asked to take a hit. Does that seem fair? No. But listen, you’re my client, and my job is to help you. So, here’s what I’m going to do—I’ll go back to the buyer and see if they can come up with another $3,500. Now, I don’t know if that’ll work because they’re approved for $350K, and they’d have to check with their lender. But let’s put it on the table and see what happens. Sound good?”
Step 5: Stand Firm on Value
If the seller still pushes for a commission reduction, Darryl suggests reinforcing the value of your services:
“I don’t cut my commission because I’m not part of the negotiation between you and the buyer. You’re paying me for my expertise, my marketing, and my ability to bring offers to the table—like this one. If you want to sell your home for $352,500, that’s entirely your choice. But my commission is for the work I’ve already done to get you here.”
This keeps the conversation professional and helps the seller respect the agent’s value.
Related reading: Real Life Real Estate – Why Real Estate Agents Shouldn’t Reduce Their Commission
Useful Analogies For Communicating with Clients
Here at POWER Headquarters, we love analogies. We used Digital Darryl™ to come up with two fantastic analogies to use when explaining to your seller why your commission should not be cut.
“Alright, you’re asking me to cut my commission to make the deal work. But let me put this in perspective for you. Imagine you’re on an airplane, and the pilot comes over the intercom and says, ‘Folks, we’re running low on fuel, but don’t worry—I’ve decided to save the airline some money by cutting back on the fuel we’re using to get you there.’ What would you do? You’d panic, right? Because fuel is what gets you to your destination safely. Well, my commission? That’s the fuel of this transaction. It’s what keeps everything running smoothly so we can land this deal the right way. Cutting it? That’s like telling the pilot to take a gamble with your flight. Not a risk I’d want to take, would you?”
Alternatively, you could use this one:
“Picture a championship boxer in the final round of a fight. They’ve trained for months, they’ve put in the work, and now they’re in the ring, fighting to win. And suddenly, their coach says, ‘Hey, let’s save some energy—don’t throw as many punches.’ What happens? They lose the fight. Same thing here. We’re in the final rounds of this deal. You don’t want me pulling back, and you definitely don’t want the buyer’s agent pulling back. The commission is the energy that gets us across the finish line. Cutting it now? That’s like telling me to put my hands down in the last round of the fight. And I don’t know about you, but I like to win.”
Related reading: Realtor.com – How To Negotiate a Real Estate Agent Commission
The Big Takeaway
The key lesson here is that your commission is not a bargaining chip—it’s a reflection of the value you bring to the transaction. The moment you agree to cut your commission without a fight, you undermine your worth in the client’s eyes and set a precedent for future negotiations.
At the end of the day, real estate is about relationships and confidence. If you approach commission objections strategically and stand behind the value you provide, you’ll not only protect your income—you’ll also reinforce your credibility as a skilled negotiator. And when a seller truly understands the expertise you bring to the table, they’ll be far less likely to ask you to take a pay cut just to make a deal work.
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