AI could push real estate commissions lower, Alloy Advisors says

June 12, 2026 - 01:53

A new analysis from Alloy Advisors suggests that artificial intelligence is poised to put significant downward pressure on real estate commission rates, potentially saving home sellers thousands of dollars. The advisory firm estimates that on a typical $400,000 resale property, total transaction costs reach roughly $39,660. Of that amount, about $23,000 goes directly to real estate agent commissions.

According to the report, AI tools are increasingly capable of handling tasks that traditionally required a human agent, such as property valuation, market analysis, listing photography, and even virtual showings. As these technologies become more mainstream, the value proposition of a full-service agent at a 5% to 6% commission may weaken. Alloy Advisors argues that buyers and sellers will become more comfortable using AI to manage parts of the transaction, which will force agents to compete on price.

The firm does not predict the complete elimination of human agents. Instead, it expects a shift toward tiered service models or flat-fee structures. Sellers who only need basic listing services might pay a fraction of current rates, while those wanting full representation could still pay a premium, but likely less than today's standard. The report notes that the real estate industry has long resisted commission compression, but AI's efficiency gains may make that resistance unsustainable. If the trend holds, the $23,000 commission on a median-priced home could shrink noticeably over the next few years.