The Hidden Commission Windfall: When Your Agent Collects Double

You hire a listing agent to sell your house. The standard pitch: "We charge 6% total: 3% for us, 3% for the buyer's agent." Seems straightforward enough.

But right there in your listing agreement, often in plain sight but never clearly explained, is language that says if a buyer comes direct (without their own agent), your listing agent still gets 5% or sometimes the full 6%. Same house. Same work. Nearly double the money.

The justification? "We have to do extra paperwork handling both sides of the transaction." But your listing agent was already hired to sell your house: marketing it, negotiating offers, handling the transaction. If a buyer walks in without an agent, they're not suddenly doing twice the work, yet they're collecting nearly twice the commission.

Traditional brokerages don't just allow this, they require it. Many mandate minimum 5% commissions even when a buyer comes direct. Here's the thing: most agents don't even know to explain this to you because nobody taught them. I didn't learn about it until a buyer tried to purchase direct and I had to ask what happens to the commission. It's not a conspiracy, it's just how the system perpetuates itself through lack of transparency.

The last traditional brokerage I worked at had a 5% minimum policy. Most agents wouldn't budge below that number, often blaming company rules. Plus, they make more money by following them. But here's what they don't tell you: these "requirements" are rarely enforced. When I dropped below 5% for fair compensation, I heard about it once. A brief conversation with a managing broker, nothing more.

The truth? These minimums exist to maximize brokerage revenue, not to serve your best interests.

Since the Burnett v. National Association of Realtors settlement, buyer's agents can no longer advertise compensation offers in the MLS. In theory, this means buyers should negotiate their own agent's commission. In practice, most buyers still expect sellers to pay, and most listing agents structure deals this way because it's the only system they know. Plus, it allows them to avoid the uncomfortable conversation of telling buyers the true cost of their services and negotiating their own commission when working as a buyer's agent.

When a buyer does come direct, you end up paying a two-agent commission to one agent doing marginally more work. It's a windfall the industry has quietly enjoyed for decades.

Before you sign any listing agreement, negotiate the commission structure for direct buyers. If your agent is getting 3% to list and market your home, they should get 3% when a buyer comes direct, not 5%, and certainly not 6%.

(Side note: I don't actually recommend agreeing to a traditional 3% either, but for the sake of a simple example since most people know the traditional model, I'll keep it at that for today.)

The solution isn't complicated, but it requires you to ask the right questions upfront and get specific terms in writing. There's a strategy to structure these agreements fairly, but most sellers never know to ask.

Want my exact approach to negotiating fair commission structures that protect your equity? Email me at [email protected] or schedule a free strategy call. I'll show you exactly what to ask for and how to get it in writing.

Housing is a necessity in life. You deserve transparency about where your money goes.

The title companies and lenders you're paying are more loyal to the agents who refer them than to you. I'll expose how these "consumer service" providers prioritize their B2B relationships with real estate companies over your best interests, and what to do about it.

I'm Mathew Speer, creator of PropertyPage.io, the first consumer centered, fully transparent real estate listing platform. After 20 years investing and 14 years as an agent, I authored The Consumer's Guide to Buying and Selling Real Estate and write this newsletter to expose industry dysfunction and arm consumers with insider knowledge.