How Do 2% Commissions Work? | How Much Can I Save? | How to Get a 2% Commission | Top 2% Real Estate Commission Companies
When you sell your home, you’ll typically pay a 6% commission based on your final sale price. That total fee is split between your listing agent and the buyer’s agent.
Competition in the real estate industry is driving this commission rate down, though. Today, you can find listing agents who accept 2% real estate commission rates instead of the conventional 3% rates. And several discount real estate brands offer built-in 2% listing rates, no negotiations required.
Some companies, like Clever Real Estate, go even further with a 1% listing (or a flat $3,000 fee for homes under $350,000). Find out how you can save with Clever today!
Key Takeaways
- 2% commission savings usually come from your listing agent’s fee; you’ll still likely pay the typical 3% buyer’s agent fee
- You may be able to negotiate a 2% rate with your listing agent yourself, but this can be difficult
- Your best bet is to work with a discount real estate company that offers built-in 2% commission rates (or lower!)
How Does a 2% Real Estate Commission Work?
Getting a 2% listing fee can lower your total real estate commission from 6% to 5%. On a home sale, this can lead to thousands of dollars in savings! Here’s how it works.
In a conventional transaction, the seller typically covers the fees for both the buyer’s and seller’s agent.
For 3%, your listing agent helps with everything from home staging, to pricing strategy, to running open houses and showings, to negotiating and closing the eventual deal.
The buyer’s agent earns their 3% by bringing a qualified buyer to your home and guiding them through the process.
This rate varies by your area, but for ease, this usually comes out to 6% of the final sale price.
| Fee | Rate |
|---|---|
| Listing Agent | 3% |
| Buyer's Agent | 3% |
| Total Commission | 6% |
When your listing agent agrees to a reduced 2% commission rate, you’ll effectively pay a 5% fee. This can lead to real savings! On a $500,000 home sale, you’d save about $2,500 compared to a conventional sale.
| Fee | Rate |
|---|---|
| Listing Agent | 2% |
| Buyer's Agent | 3% |
| Total Commission | 5% |
2% commissions usually come from the listing agent or broker
Most discount agents or brokerages offer a 2% commission for the listing agent only.
These companies can offer a lower rate by reducing overhead, streamlining services, or taking on more customers. These reduced rates can help you save thousands of dollars on realtor fees, but often come with risks or service quality trade-offs.
For example, you may not have in-person support during your sale or may be shuffled between a team of agents and support staff. Always closely research online reviews for any 2% commission companies you’re interested in working with and make sure you know what services to expect from the start.
And remember, you’ll still pay the standard 3% buyer’s agent commission. In effect you’ll pay a total commission of 5%.
Why does the buyer’s agent fee usually stay the same?
In the vast majority of sales, your listing agent will encourage you to offer a full buyer’s agent commission — typically 2.5-3% depending on your area.
Why? Offering a competitive buyers’ agent fee essentially incentivizes local agents to show your home to their buyers.
Not doing so could lead agents to steer their clients away from your property. With less competition between fewer buyers, you’ll likely experience a slow sales process and net a lower sales price.
This could cut into — or even fully negate — any savings you might have had by lowering your commission fee!
>> Learn more about common realtor fees and commissions
Is it possible to pay a 2% total commission?
A 2% rate for listing agents can be very successful, but a total 2% commission is trickier. Very few realtors and brokerages offer a flat 2% commission, because the only real ways to do so are by:
- Eliminating the 2.5-3% buyer’s agent commission entirely
- Having the same agent represent both the buyer and seller (known as dual agency)
Both of these approaches come with risks. As noted, by not offering a buyer’s agent commission, you’re cutting your pool of potential buyers way down and risking a lower final sale price.
With a dual agency approach, an agent who stands to earn two commissions may be willing to offer a lower 2% commission for the total sale.
However, dual agency inherently creates a conflict of interest for the agent. And, without a dedicated agent on either side of the table, either the seller or buyer (or both!) may not get the best deal. Due to these issues, dual agency is actually illegal in a handful of states.
How Much Can I Save with a 2% Commission?
A lot! For example, on a $350,000 home, getting a 2% listing fee would save you $3,500 compared to the typical 3% rate.
A 2% commission rate can result in even greater savings on higher-priced properties. This is how much you’d pay across different price points.
| Price Point | 2% Listing Commission | Savings* |
|---|---|---|
| $250,000 | $5,000 | $1,250 |
| $500,000 | $10,000 | $2,500 |
| $750,000 | $15,000 | $6,750 |
| $1 million | $20,000 | $10,000 |
Some discount real estate companies offer even better savings than a 2% listing fee.
Clever is a free agent-matching service that offers pre-negotiates low rates with top realtors from brokers like RE/MAX and CENTURY 21. With Clever, you’ll sell your home for a 1% listing fee — or $3,000 if your home sells for less than $350,000.
Discover how Clever can help you save today!
Sellers Can Save Thousands With Clever
Our friends at Clever Real Estate negotiate with top-performing agents so you don’t have to. Start saving thousands today.
How to Get a 2% Commission Rate
1. Negotiate with your realtor
You can try to negotiate a lower rate with a traditional realtor, but your success will depend on:
- Average commission rates in your area
- The desirability of your property
- How in-demand the agent is
- Local market conditions
Even if the odds are in your favor, it’s not easy to negotiate a 2% real estate commission. Agents are experienced professional negotiators, and you’re essentially asking them to take less money to do the same amount of work.
>> Learn the basics of negotiating a lower commission.
2. Work with a company that offers built-in discounts
Instead of negotiating yourself, you can also work with an agent, brokerage, or service that offers a built-in 2% real estate commission.
In general, two types of companies do this:
- Discount brokerages that rely on a team of in-house agents and other service tradeoffs to offer lower rates
- Agent-matching services that lock-in reduced rates with traditional agents for a full-service experience at a lower cost
For example, Clever Real Estate is an agent-matching service that matches you with pre-vetted agents in your area. Partner agents will sell your home for a 1% listing commission or flat $3,000 fee if your home sells for less than $350,000.
A 1% commission with Clever can translate to thousands of dollars in savings. You’ll get the same full-service sale experience from a top agent in your area. Contact our friends at Clever today to learn more!
What Are the Top 2% Real Estate Commission Companies?
There are a few companies that offer a 2% (or lower!) listing fee, and even fewer that promise a total 2% commission rate.
When you’re reviewing the following low-commission companies, think about:
- Whether its services align with your specific goals
- How much value they offer compared to the risk you’ll be taking on
- What online reviews say about service quality
Also make sure the company you’re interested in actually works in your area. A few companies have national coverage, but most discount brokerages have limited service areas.
And, since a straight 2% commission is rare, we also cover some companies that offer commission rates that are a bit higher or lower than 2%.
| Company | Average Rating | Locations | Listing Fee | Buyer Rebates | Average Savings* |
|---|---|---|---|---|---|
| Clever | 4.9 | National | $3,000 or 1% | Yes | $7,375 |
| REX | 4.7 | Select states | 2.5% (min. fees vary) | Yes | |
| Ideal Agent | 4.8 | Select states | 2% or $3,000 | No | $4,000 |
| Redfin | 3.2 | National | 1.5% (min. fees vary) | Yes | $5,875 |
1. REX Homes
REX advertises a 2.5% “total fee,” which it delivers by not offering a buyer’s agent commission or listing your home on the MLS.
If successful, this approach can yield big savings. But by removing the buyer’s agent commission AND eschewing an MLS listing, REX dramatically reduces your pool of potential buyers, which may make selling your home far more difficult.
In fact, many REX reviewers claim that they eventually had to offer a reasonable buyer’s commission before their home sold.
REX isn’t a great fit for sellers who need maximum exposure for their home to achieve a sale and there are few benefits for buyers. However, REX could work well for sellers who:
- Own a very desirable home in a hot market
- Bring some professional real estate expertise to the table
- Absolutely prioritize a lower commission over the best possible sale price
2. Ideal Agent
Ideal Agent (formerly known as Home Discovery Real Estate) is an agent referral service that connects sellers with pre-vetted agents who agree to work for a slightly lower commission.
The company advertises a 2% commission, but again, that doesn’t include the standard 3% buyer’s agent commission. Ideal Agent customers will almost always pay around 5%, a small 1% discount off the traditional commission.
Further, mixed online reviews suggest that Ideal Agents need a stronger screening process to ensure its pairing customers with high-quality agents.
Ideal Agent may be a good choice for:
- Sellers who are only looking for a small commission discount
- Sellers who live in dense markets with many higher-quality agents to choose from
>> Learn more about Ideal Agent
3. Redfin
Redfin is the largest discount real estate brokerage in the U.S. It offers a listing commission of 1.5%— or 1%, if you also buy with the company.
In addition to that 1.5% listing fee, Redfin (like most brokers) recommends you offer a competitive buyer’s agent commission. Rates vary, but 2.5-3% is typical nationwide.
Redfin agents work for a salary instead of commission, and it uses a team-based model. That means you’ll work with a succession of different Redfin employees as your sale moves along.
Redfin isn’t a great fit for sellers who want a personalized, one-on-one relationship with their agent. However, it can be great for sellers who:
- Are planning to also buy with Redfin
- Value the reassurance of working with a huge, national company
- Are comfortable working with a team instead of just one agent
4. Clever Real Estate
Clever isn’t technically a 2% commission company, but with a 1% commission or low flat fee, it offers even more opportunities for savings.
Its free agent-matching service connects you with top agents in your area, from major brands like Keller-Williams and CENTURY 21, who have pre-negotiated lower rates.
You’ll sell with a Clever partner agent for just a 1% listing fee, or $3,000 if your home sells for less than $350,000.
What’s in it for the agent? They receive a steady stream of quality business referrals at zero upfront cost. This helps them grow their business and save on the typical cost of finding new customers. Then, they pass those savings along to you.
Clever may be a great option for:
- Sellers who place a high value on chemistry with their agent
- Sellers who want to save big on commission but don’t want to sacrifice service
- Buyers who are interested in a cash back offer (available in select markets)
Get Connected With Top Agents and Save Thousands
Clever Real Estate can negotiate with the top agents in your area so you can get amazing service and save thousands.
Recommended Reading
Want to learn more about how to save on your real estate commission? Check out these articles for additional information.
What Companies Offer the Lowest Real Estate Commission Fees? It can be hard to keep track of all the different rates offered by various brokerages, but our definitive guide discusses which companies charge the lowest commission across the board.
Realtor Fees: All Your Questions Answered Right Here: How much are realtor fees? Who pays? What do you get for that money? Are realtor fees negotiable? In this article, we answer these top questions and many more.
How to Negotiate Your Real Estate Commission and Save Big on Fees: Everything is negotiable in a real estate transaction — but convincing your agent to cut your fees is no easy task. Use these tips to improve your chances of out-negotiating a professional negotiator!
Leave a Reply