In real estate, agents make money through commissions. This means they get a percentage of the home’s sale price. Usually, this commission is split between the listing agent (who represents the seller) and the buyer’s agent (who helps the buyer). However, listing agents often believe they should get a bigger share. Why? Let’s take a closer look at their reasoning.
Listing Agents Spend More Money Upfront
One of the main reasons listing agents expect a bigger cut is because they spend a lot of money to market a home. They pay for professional photos, online ads, flyers, staging, and sometimes mail campaigns. This all comes out of their pocket before they even sell the house.
On the other hand, a buyer’s agent spends more time helping clients find homes and making offers. While this is important work, it usually doesn’t require the same level of upfront spending as listing a home.
The Risk Factor
Listing agents take a big risk. If the home doesn’t sell, they don’t get paid—no matter how much they spent on marketing. They might work for months without seeing a dollar. If the seller takes the home off the market or switches agents, all their work is wasted.
Buyer’s agents also take risks, but they typically work with buyers who are serious about purchasing. While they might spend time showing homes and writing offers, they don’t usually invest their own money like listing agents do.
More Control Over the Deal
Listing agents play a big role in setting up the deal. They help sellers decide on a price, handle offers, and make sure the home looks appealing to buyers. Since they control much of the process, they believe their job is more complex than a buyer’s agent’s.
Buyer’s agents, meanwhile, help clients find a home and negotiate a good price. While this is important, they don’t have as much control over the transaction as the listing agent.
Market Conditions Matter
When homes are selling fast, listing agents feel they deserve a higher commission because they can get better offers for their sellers.
But when homes take longer to sell, buyer’s agents argue that their job becomes just as important. The commission split doesn’t always change to reflect these shifts in the market.
Branding and Reputation
Listing agents often spend years building their reputation and marketing their services. Some hire assistants, run advertisements, and create strong personal brands to attract sellers. All of this costs money and effort.
Buyer’s agents don’t usually have to build a brand in the same way. Many rely on referrals or work with clients who find them through their brokerage.
Traditional Commission Splits
In most cases, listing agents and buyer’s agents split the commission equally. However, in some markets, listing agents negotiate to take 60% or more, leaving the buyer’s agent with a smaller share.
Some listing agents argue that technology has made it easier for buyers to find homes, so buyer’s agents should get paid less. However, this view is controversial, as buyer’s agents still play a key role in helping clients navigate the process.
Legal and Ethical Questions
Recently, some lawsuits have challenged the way commissions are split. Some argue that buyer’s agents are underpaid for their work, while others say listing agents take on more responsibility and deserve a bigger cut.
As the real estate industry changes, commissions may become more flexible. For now, listing agents still push for higher pay based on the risks they take and the money they spend upfront.
The debate over commissions is ongoing. Listing agents argue that they should earn more because of their expenses, risks, and role in the sale. Buyer’s agents believe they work just as hard and deserve an equal share.
However, not all listing agents demand more money. Jacqueline Newhouse, for example, believes in a fair split. If she earns a 2.5% commission, she generally thinks the buyer’s agent should make the same amount—assuming the seller is open to offering buyer agent compensation.
When interviewing the real estate agent you plan on using to sell your house, please ask them what is included and how they plan to work for you and showcase your property in the best light. Pictures with smartphones shouldn’t be acceptable. I start working for my clients even before the home goes on the market—make sure who you hire is willing to do the same.
At the end of the day, commissions should reflect the effort, skill, and value that each agent brings to the table. As the real estate industry evolves, transparency and fairness will become even more important.