Rethinking real estate commissions

When Mike Chambers decided to sell his home in Boulder, CO, every real estate agent he spoke to wouldn’t budget below a 5% commission. That amounted to $137,500 on his $2.75 million house. “I didn’t feel like the service I was getting was reflected in the price I was being asked to pay,” he tells The Playbook. “So I decided to sell it myself.”

The problem? Colorado law does not allow sellers to post on the Multiple Listing Service (MLS)—the main hub where buyers shop—without an agent. So Chambers found a workaround: posting publicly on the Instagram account @realtorshateme.

The account went viral, and his home was under contract in 15 days. Chambers then took what he learned to launch Ridley: an AI-powered platform that helps sellers with MLS distribution, pricing, and more for a flat fee starting at $1,499. For $3,999, sellers get access to agents who partner with Ridley to support sellers and answer questions, earning $1,500 to $3,000 of that fee (in certain states like Colorado, these agents also help with MLS access).

Where are commissions headed?

Ridley has sold more than 200 homes since launching last July, saving sellers an average of $43,639. It’s currently available in 12 states, but it’s not the only alternative. Hundreds of flat-fee MLS services promise to list your home for $200–$2,000 with à la carte add-ons. But not all of these options deliver buyers as easily as sellers hope. Full-service agents still tend to net faster sales and fewer surprises; DIY works best for sellers with the time and stomach for it. And while the savings can be real, so are the trade-offs.

“If you list straight to Zillow or via flat-fee MLS products, buyer inquiries may get routed through platforms that monetize those leads by selling them to agents,” warns Amanda Orson of the AI real estate investing site Galleon. That means buyers who click on your listing may not even reach you, and/or you’ll get calls from agents trying to convince you to hire them instead.

Another option: Find an agent you like and negotiate—particularly if you’re an investor who can offer repeat business. “I have an agent who lists for me for 1% to 1.5% compared to the usual rate of 2.4% to 3%,” says Chad Gray of Cardinal Home Buyers in Raleigh, NC. “It is advantageous for both of us.”

Sellers looking to save can also negotiate who covers the buyer’s fees. “I’ll tell agents up front that their buyer is responsible for paying their agent’s commission,” says Ryan David of We Buy Houses In Pennsylvania. “The only potential issue is that an agent or buyer may not agree. But I’ve never had an interested party refuse to move forward in some fashion.”

Bottom line? “Commissions are 100% negotiable, even if an agent tells you otherwise,” Chambers says. And a lower fee doesn’t have to mean less support—many top agents want to stay competitive.

“Data shows that discount brokers do more volume and make more money,” points out Ryan Dossey of SoldFast. “Realtors may hate them, but they’re so busy they don’t care.”

And for the record, Chambers doesn’t hate real estate agents. “My problem with the real estate industry isn’t with individual agents; it’s just with the system,” Chambers explained on his Insta. “I think if Realtors don’t start changing the system, someone else will. We’ve seen this happen with Uber versus taxis and Airbnb versus hotels. When an industry refuses to evolve, an outsider steps in and rewrites the rules.”