Cutting your commission is a dangerous game.
Over the course of my career, I’ve lost count of how many times an agent has come to me frustrated—upset that a listing agent reduced their commission, and now their client is ready to submit an LOI. They feel cheated. And understandably so. When commissions are cut, or are below standard rates, it creates confusion, tension, and often, resentment. But why does it happen?
Let’s take a closer look.
The Allure of Winning a Listing — At a Price
In our company, we don’t allow agents to cut their commissions. Here’s why: once you start down that path, it's incredibly difficult to turn back. The industry is small—word spreads fast. If you're known as the agent who negotiates fees, you’ll quickly find yourself trapped at the bottom of the pricing ladder, unable to climb back up to market rates.
You may win a few listings at first, but over time, you’ll be seen as a discount agent. Some agents may avoid showing your listings, thereby hurting the actual client, and causing more work, with less transactions for the company that is cutting the offered commissions. We’ve watched this happen repeatedly with discount brokerages and agents. They rarely become long-term players in the market. In fact, most fade out after a few years or have to change their business model to stay competitive.
Commission Cuts During Market Cycles
In tight markets with low inventory, we’ve experienced pressure to reduce commissions—especially from sellers or landlords trying to cut costs wherever possible. In rare cases, we’ve made slight adjustments, but we’ve always protected the buyer/tenant representative’s full commission that they expect to receive.
That’s key: relationships matter. Our philosophy is simple—play the long game. If you want to maintain good standing in the industry and continue doing deals with other professionals, you must think beyond a single transaction. The most successful agents consider what’s best for everyone involved, not just themselves or their client.
That mentality builds trust. It keeps you in business. And it encourages others to work with you again.
To Show or Not to Show? The Discount Dilemma
There’s a real, and sometimes uncomfortable, question that arises in our industry:
“Should I show a property with a discounted commission?”
Ethically and professionally, the answer is yes—you are obligated to show your client all properties that meet their needs, regardless of the commission offered.
But let’s be real: many agents simply won’t.
Why? Because they feel disrespected. If a listing agent is willing to discount their value, it casts doubt on the professionalism of the entire deal. The thought becomes: Why should I invest time and effort working with someone who devalues their own services?
Over time, those listings get ignored. The agents behind them become isolated. And that’s not good for anyone—especially the client.
It can also appear to be a redflag to the potential tenant, if the landlord isn’t willing to pay a market rate commission, what other “shortcuts” are they taking when it comes to managing the building?
A Workaround for Buyer/Tenant Reps
There is a way for buyer/tenant agents to protect themselves in discounted deals. Agents can enter into exclusive representation agreements that clearly state the buyer or tenant will make up the difference in commission. Some states already require that an agent working with a buyer must have a buyer representation agreement spelling out how the commission structures will work.
It’s transparent, it’s fair, and—most importantly—it keeps the relationship between agents and clients honest and upfront. If you go this route, make sure your client fully understands and agrees to this clause. Communication is key.
Looking Ahead: What the NAR Lawsuit Could Mean
With the recent NAR lawsuit shaking the industry, we may see sweeping changes to how commissions are handled—particularly around transparency. This could have a major impact on both residential and commercial real estate, but likely a larger impact on residential real estate transactions.
One thing is certain: now more than ever, agents must lead with integrity, clarity, and professionalism. Cutting commissions might seem like a shortcut to win a deal, but in the long run, it can damage your brand, your relationships, and your, and your clients’, business.
The mindset should always be about building a business that will be sustainable well into the future.
