The traditional 3% real estate commission model, where home sellers pay 3% to both the listing agent and the buyer’s agent (totaling 6%), has long been the norm.
However, several factors — including increased competition among realtors and the emergence of low commission real estate models — have contributed to a decline in realtor commission rates, which now average 2.74% for sellers' agents and 2.58% for buyers' agents nationwide.
If you're looking for lower commission rates near you, a free service like Clever Real Estate is a good place to start. Clever pre-negotiates listing fees of just 1.5% with top-performing agents from well-known brands like Keller Williams and RE/MAX. As a home seller, you get full-service representation from an experienced local agent for about half the typical rate.
How a 3% real estate commission works
Up until recently, in a typical home sale, the seller would pay a commission to each agent involved in the transaction:
- The listing agent earned a 2-3% listing fee for their services in marketing and selling the home.
- The buyer's agent received a 2-3% buyer's agent fee for bringing the buyer to purchase the home.
Before listing their home for sale, the home seller would determine what amount to offer the buyer's agent — usually at the guidance of their listing agent, who would base the number on market norms.
The listing agent would then advertise the buyer's agent's commission directly in the listing, in accordance with MLS rules largely governed by the National Association of Realtors.
3% realtor commission example ($300,000 house)
| Agent | Fee | Cost |
|---|---|---|
| Listing agent | 3% | $9,000 |
| Buyer's agent | 3% | $9,000 |
| Total commission | 6% | $18,000 |
The problem with this model is that it forced sellers to pay as much as 6% of their home sale proceeds to agents, while also preventing buyers from having any say in how much of the purchase price went to agent fees.
Opponents of this model also claimed that it steered buyers' representatives to listings that advertised a higher buyer's agent commission, forcing sellers to keep pace with standard commission rates to ensure their homes got foot traffic.
🚨 Realtor commission changes are here
After losing a lawsuit over their practices in 2024, the National Association of Realtors agreed to change the way commissions are handled, ostensibly giving buyers and sellers more control in negotiating fees.
Key changes resulting from the recent NAR settlement include:
- No buyer’s agent commission advertised in MLS listings. Seller's agents can no longer set or display buyer’s agent commissions in MLS listings, meaning that the amount covered by each party must be negotiated during the transaction.
- Buyers negotiate commissions directly with their agents. Additionally, sellers are no longer automatically required to cover buyer agent fees. Instead, buyers must negotiate a commission rate directly with their agent and pay for any amount that the seller chooses not to cover. The rate must be disclosed upfront and formalized in a buyer’s agency agreement before touring homes.
Sellers may still choose to offer closing concessions to cover some or all of the buyer's agent fees, and buyers may continue to request these types of concessions to avoid having to bring extra cash to the closing table, but commissions must now be disclosed and negotiated to all parties upfront, rather than simply baked into the home sale price.
Can I pay a 3% total commission rate?
Yes, it's possible to achieve a total real estate commission fee of 3% when selling your house. However, this approach may have implications for the timeline of your sale and the final sale price.
Here are some potential ways to pay a 3% total commission.
Reduce both agents' commission
While sellers are no longer 100% required to offer commission or cover the buyer's agent fees, our research shows that in many markets across the country, sellers still cover part of the buyer's agent commission or provide concessions to cover the cost.
This fee is completely negotiable, however, so you can try to negotiate a lower fee with the buyer to reduce your costs.
You can also focus on reducing the commission for your listing agent to cut costs. One way to reduce expenses is by working with a broker offering lower commission rates than average. A growing number of companies offer full-service representation at a rate far below the typical listing fee. These services often pre-negotiate reduced rates with experienced agents,
For example, the top-rated Clever Real Estate pre-negotiates 1.5% listing fees with top local agents from traditional brokerages like Keller Williams and RE/MAX, saving you the hassle of negotiating fees on your own. You benefit from top-notch agent expertise while undercutting the standard 2.5–3% most agents charge by as much as half.
Eliminate one agent from the sale
In dual agency, the real estate agent represents both the buyer and the seller, so the commission is paid to only one agent instead of two.
Another approach is to sell your house without a realtor. This avoids a listing fee but still requires a standard buyer's agent commission.
However, both strategies come with significant risks for most home sellers.
- Dual agency creates a conflict of interest for your agent as they must represent you and the buyer equally, potentially affecting their ability to advocate for your best interests during negotiations.
- Recent studies have shown that sellers often achieve a lower sale price when selling without an agent than when working with one. FSBO homes sold at a median of $310,000 last year, significantly lower than the median of agent-assisted homes at $405,000.[1]
» MORE: Better strategies to save on realtor commission
3% buyer's agent fee: Why sellers have paid it
The fee compensates the buyer's agent for their valuable role in helping you find a suitable buyer. Buyer's agents play a crucial part in the real estate transaction by assisting buyers in their home search.
Traditionally, the typical buyer's agent fee ranges from 2-3% of the home's sale price, and averages 2.58% nationwide.
However, this rate can vary based on market conditions and your location. Also, with the recent NAR changes, buyers must now negotiate the rate with their agent directly, before viewing homes. This means sellers no longer set the buyer’s agent commission in the listing agreement, and may not be on the hook to cover the fee.
Why do realtors make a 3% commission?
A 3% realtor commission has been a long-standing industry norm, primarily because real estate agents operate on a payment model that only receives compensation upon successful home sale or purchase closing.
This means that agents invest a significant amount of their time, effort, and often their own money in serving their clients, all without the guarantee of payment.
- For example, listing agents often bear the upfront costs of essential services like professional photography, MLS listing fees, and marketing efforts to promote your home.
- Buyer's agents may spend days or weeks assisting buyers in their search for homes, submitting offers, and negotiating. In cases where a home doesn't sell, or a buyer changes their mind, the agent doesn't receive any compensation for their efforts.
Over time, the real estate industry settled on a 3% commission rate as a fair compensation structure that adequately rewards agents for the time, dedication, and risks of real estate transactions.
However, opinions on this matter vary widely. For example, one survey found that about 55% of sellers say they shouldn't have to pay the buyer's agent fee. Commission rates have seen noticeable declines in recent years, although they remain significantly higher than other countries.[2]
3% commission calculator
To find out how much selling with a 3% commission realtor could cost when you sell your house, fill out the calculator below. Adjust the sale price, listing fee, and buyer's agent fee to see how they affect your net proceeds.
*Based on average seller closing costs nationwide. Learn more about closing costs.
As you can see, even a small reduction in your agent's commission rate can yield big savings.
For example, on a $400,000 home sale, dropping your listing fee from 3% to 1.5% would put an extra $6,000 in your pocket at closing.
How to save on realtor commission
You have three options to pay less than the standard 3% commission on your home sale: Work with a discount real estate brokerage, negotiate a lower rate with your agent, or sell your home to a cash buyer.
Hire a low commission realtor | Negotiate with your agent | Cash buyer
Option 1. Hire a low commission realtor
The simplest way to reduce real estate agent fees is by selling your home through a low commission real estate brokerage. Leading discount brands offer similar services as traditional agents but at lower rates, allowing you to save thousands while still receiving quality service.
However, not all low commission companies provide the same hands-on service. While some maintain the same experience as working with a traditional brokerage, others may compensate for their lower rates with subpar service and hidden fees.
Compare different options to identify the ideal balance of agent quality, local knowledge, service, and pricing that aligns with your needs.
Top nationwide discount real estate brands
Listing Fee
Buyer Savings
Avg. Rating
Our take
Reviews
Service details
Locations
Clever Real Estate delivers the best combination of savings and service of any competitor that we’ve reviewed. Its agents are held to high standards and provide full service and support for just a 1.5% listing fee, saving you thousands when you sell your home. In states where it's permitted, buyers can also get cash back at closing. Clever has more agents (19,000+) in more markets than most other low-commission options, plus the highest customer rating among brands we evaluated. Unlike some of its competitors, Clever also allows you to choose your own agent. It matches you up with multiple agents, and you can choose the one that best fits your needs.
Read the full Clever Real Estate review.
Pros
- Low 1.5% listing fee for sellers — about half the typical rate
- Up to $500 cash back for buyers
- Agents have strong sales records and great customer reviews
- Compare agent service packages and credentials before making a decision
Cons
- Fewer agent options in certain rural areas
- Add-ons like professional home staging may cost extra
Listing Fee
Buyer Savings
Active Since
Our take
Reviews
Service details
Locations
Ideal Agent can connect you with a full-service realtor at a discounted listing fee of 2%. The company has high standards for the agents it recommends, claiming to work with only the top 1% based on sales volume in each agent's market. While the savings aren't as significant as some low commission alternatives, customers are generally happy with the outcome from their home sale. Not that buyers won't qualify for any saving with Ideal Agent, and the company's small network size means your agent selection will be limited.
Read our full Ideal Agent review.
Pros
- Matched with a vetted, full-service realtor
- 2% listing fee is slightly below industry average
Cons
- Don't get to choose who you're matched with
- Other brands offer better savings
Listing Fee
Buyer Savings
Active Since
Our take
Service details
Reviews
Locations
Redfin is an established discount brokerage that offers impressive savings — especially if you buy and sell with a Redfin agent. While the company's standard listing fee varies from 1.5–2%, it's reduced by an additional 0.5% if you also purchase a home within a year. However, Redfin may not be the best fit for those seeking personalized, high-touch service, as some customers have noted that Redfin agents are often less involved than traditional agents.
Pros
- 1.5–2% listing fee, and up to 0.25% cash back for buyers
- Convenient home search site with high marketing visibility for sellers
- Significant savings if you buy and sell with Redfin
Cons
- Agents handle more transaction volume and may be less hands-on
- Reviews on 3rd-party sites are lower than many competitors'
- High minimum fees in some markets
Listing Fee
Buyer Savings
Active Since
Our take
Reviews
Service details
Locations
UpNest is a legitimate agent matching service, and it can be a good way to compare real estate agents in your area. But there’s no guarantee you’ll save on real estate commissions because UpNest doesn’t negotiate a lower fee with their agents.
Pros
- Fast, easy way to compare local agents
- Agents offer full service and support
- Many customers report a positive experience with their agent
Cons
- No guaranteed savings for buyers or sellers
- Lax vetting standards compared to some competitors
- A small percentage of complaints mention a lack of professionalism and communication
Option 2: Negotiate with your agent directly
In real estate transactions, almost everything is open to negotiation, including negotiating the commission rate of your listing agent.
While it's worth asking your agent if they're open to a lower commission, there's no guarantee they'll agree. Your chances of securing a reduced commission may be higher in a hot seller's market, with an exceptionally attractive property that's likely to sell fast, or if you're willing to assist with some of the workload to make your agent's job easier.
Option 3. Sell to a company that buys houses for cash
You can eliminate both agents by selling directly to a cash home buyer.
This approach offers various advantages, including faster closings, reduced selling costs, flexible terms, and no need for repairs or showings. Cash offers also have a lower risk of falling through due to financing issues.
However, some drawbacks exist, such as a potentially lower sale price, lack of agent representation, and limited room for negotiation. It's essential to carefully weigh these pros and cons before deciding whether to sell to a cash buyer.
» Compare fair cash offers from local and national investors
What about FSBO?
Selling your home without a realtor is another option to try to save on commissions, but it comes with challenges. It requires a deep understanding of the selling process and in-depth knowledge of your local real estate market.
Additionally, selling FSBO may not necessarily result in cost savings. Recent data indicates that sellers who work with an agent achieve an average sale price of nearly $100,000 more than those who opt for FSBO, potentially negating any commission savings.
FAQ
Can I pay less than 3% commission?
Yes, you can pay less than 3% commission to the seller's agent! There are a number of real estate agents that charge low commission rates to list your house, like Clever Real Estate, Ideal Agent, and Redfin. If your goal is to reduce your total commission payment to less than 3%, it becomes more challenging. This typically involves eliminating one agent from the sale process, which can be achieved by either selling FSBO (For Sale By Owner) and offering a buyer's agent a commission lower than 3%, or by selling directly to a cash home buyer, although it may result in a lower sale price.
Is a 3% real estate commission fair?
Real estate agent commissions are negotiable, and a fair rate is determined by your comfort level and agreement with your agent. On a national scale, average rates for listing agents are now below 3%. Due to increased competition in the real estate industry, it's becoming more common to find listing agents providing full service for commissions of 2% or even lower, as opposed to the traditional 3% rates.
Check out our guide to the top low commission companies.
Do real estate agents always make 3%?
No, they dont. A 3% commission is the standard for listing agents, but in some places, realtors may make closer to 2.5%. Commission rates may vary depending on the local real estate market and home values. It's generally advisable for sellers to offer a competitive commission rate to buyer's agents, as this can help attract more potential buyers. To determine the prevailing rate in your area, it's best to consult with a local real estate professional.
What is the lowest commission a realtor will take?
The lowest commission most full-service realtors will accept is a 1% listing fee. This is a significant discount compared to average real estate agent commissions, which are usually around 2.53%.
The best way to pay a lower commission while still receiving full service and support from a licensed agent is to work with a low commission real estate brokerage. Top brands, like Clever Real Estate, offer listing fees as low as 1.5%, and allow you to work with the best local agents from brokerages like RE/MAX and Century 21 for a fraction of the price.
What is the most common commission for a realtor?
Most realtors charge a total commission of 56% of the final sale price of your home. This amount is split between the listing agent (who represents the seller) and the buyer's agent so each agent receives around 2.53%. Learn more about 3% commission realtors in this guide.
Related links
Average Real Estate Commission. Is 3% commission the norm in your area? Learn about average real estate commission rates nationwide and by state.
These Companies Offer the Lowest Real Estate Commission Fees: It can be tough to determine which companies offer you the best deals on real estate commission fees. Read our in-depth reviews of the best low-cost realtors!
Discount Agents and Real Estate Brokers — Are They Legit or a Scam? Are discount agents and rock bottom rates too good to be true, or the real deal? In this piece, we sort through the hype, and uncover the truth.
How to Negotiate Your Real Estate Fees — and Save Thousands: Negotiating your real estate fees against a professional negotiator can be challenging, unless you’re a lawyer or a professional poker player. This guide gives you some tips to even the playing field.