One of the biggest costs of selling your home is the real estate commission, which is usually 6% of your final sale price. The good news is that today there are more ways than ever to reduce your commission, and finding 4.5% real estate commissions is possible.
It seems like a small drop, but on a $500,000 home, you could save up to $7,500 in commission fees!
And 4.5% real estate commissions are just the start. Companies like Clever Real Estate pre-negotiate lower 1% commission rates with their top agents. Contact Clever today to find out how they can help you save thousands!
- A 4.5% total commission typically means you’ll pay a 1.5% fee to your listing agent
- You’ll still offer the typical 2.5-3% buyer’s agent commission to incentivize other agents to show your property
- You can get a 4.5% commission by negotiating with agents yourself or working with a company that pre-negotiates a lower commission for you
How Does a 4.5% Real Estate Commission Work?
In a conventional real estate transaction, your listing agent and the buyer’s agent split a commission that’s equivalent to about 6% of your home’s final selling price.
Your listing agent makes that 3% for the heavy lifting they do to sell your home. This includes everything from home staging to marketing to negotiating a final price.
You also offer a 3% commission to the buyer’s agent as a kind of financial bounty for bringing their clients to your home. Buyer’s agents don’t typically earn a salary — their earnings come from these commissions.
If you reduce or eliminate that 3% buyer’s commission, odds are that most buyer’s agents will simply steer their clients away from your property.
Companies that offer a 4.5% commission rate typically get there by cutting the listing agent’s commission in half.
|Listing Agent Commission||1.5%|
|Buyer's Agent Commission||3%|
How much can I save with a 4.5% commission?
The difference between a 6% and 4.5% commission sounds small, but it may translate to thousands — even tens of thousands — of dollars in savings.
The table below breaks down how much you could potentially save with a 4.5% total commission at four different price points.
|Price Point||4.5% Commission||Savings*|
*Compared to 6% total commission rate
How to Get a 4.5% Commission Rate
There are two main ways to get a lower commission rate:
First, you can negotiate it yourself. Almost everything in a real estate transaction is technically negotiable — and that includes your commission fees.
The only catch is that a real estate agent is a professional negotiator, so it’s going to be pretty difficult to convince them to cut you a discount. That being said, it’s definitely possible, if you know what you’re doing.
The second possibility — and by far the easier one — is to work with a company that offers pre-negotiated, lower commission rates from the start.
Who Are the Top 4.5% Commission Companies?
For the average seller, convincing an experienced agent to take less money to do their job is a tough ask. Unless you’re an attorney or hostage negotiator, it probably makes more sense to work with a company that’s already locked in a lower commission rate.
These are some of the best 4.5% commission companies. Some may even offer lower commission rates, depending on your circumstances.
|Company||Average Rating*||Locations||Listing Commission||Additional Benefits||Average Savings**|
|Clever||4.9 (590 reviews)||Nationwide||1% (or $3,000)||$1K buyer rebates and full-service support||$7,375|
|Redfin||3.2 (287 reviews)||Nationwide (select markets)||1.5% (min. fees vary)||Sellers who also buy with Redfin can lower listing fee to 1%||$5,550|
|Door||4.8 (434 reviews)||TX||1.5% (min. fees vary)||Fully online sale experience||$4,825|
|Prevu||4.9 (115 reviews)||CA, CT, MA, NY, PA||1.5% (min. fees vary)||Buyer rebate of up to 2%||$2,450|
|Reali||4.6 (415 reviews)||CA||1% - 2.5%||Easy home trade-ins for a fee||$6,375|
|SimpleShowing||4.9 (284 reviews)||FL, GA, TX||1% (min. fees vary)||Buyer rebate up to 1.5%||$7,125|
*Data current as of 1/4/2021
**Compared to a 3% listing fee at four price points: $100,000, $250,000, $500,000, $750,000
1. Clever Real Estate
Clever Real Estate offers a free agent-matching service that connects sellers and buyers with vetted, top agents in their local markets. They also pre-negotiate a low, flat $3,000 listing fee — or just 1% if your home sells for more than $350,000.
Clever gets you a full-service, top-of-the-line sale experience for a total commission of 4%, or even lower, depending on your home’s final sale price and the average buyer’s agent commission in your area.
Eligible buyers may also receive cash back after purchase.
Finding an agent with Clever is a win-win; you get to work with a top agent with a proven track record, and save thousands in commission fees. Contact our friends at Clever to learn more!
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Redfin is the biggest discount real estate brokerage in the U.S. They offer a low 1.5% listing commission, which drops to 1% if you also buy with the company. You’ll still be advised to offer the typical 3% buyer’s agent commission, which brings your total commission on the sale to about 4.5%.
How does Redfin do it? They use a team-based service model, in which you’ll work with a variety of specialists throughout your selling experience.
This is a big change from the traditional model of one agent who shepherds a sale from start to finish. Redfin’s model may be more efficient in some cases, but critics say it lacks a human element.
Their service model can also lead to some hiccups. The most common complaint from Redfin sellers is a lack of communication. Put simply, the more people you have handling your sale, the more opportunities there are for mistakes and oversights.
Door.com is a Texas company that trades low rates for an entirely online home-selling, or buying, experience. While your agent (and various support specialists) will be available via phone, text, email, and Door’s online portal, you’ll never actually meet them face-to-face.
This online-only, team-based model adds up to a business model that can handle a ton of sales in a short amount of time. For sellers, this translates to a 1.5% listing fee.
This may not be a positive for all (or even most) sellers, but for that segment of Texas sellers who’d like to actively avoid face-to-face interaction, Door could be their ideal brokerage.
For sellers who do value face-to-face agent interaction, Door’s online-only model could be a huge drawback. And, their service area is extremely limited.
Prevu is a discount real estate company that offers savings for home sellers and buyers in a few select areas, including Los Angeles, New York City, Boston, Philadelphia, and parts of Connecticut.
Unlike many of its competitors, Prevu focuses more on creating value for buyers in these high-priced markets rather than sellers.
Buyers who work with Prevu can qualify for a very substantial rebate of up to 2% of the purchase price.
Prevu does offer reduced listing commission for sellers, too — 1.5% for qualifying sellers. This puts it in line with larger competitors like Redfin.
Dig a little deeper, though, and there are some drawbacks.
Prevu’s minimum fees mean that savings only kick in if you’re buying or selling a high-priced home. It should be noted that the markets where Prevu is active are also some of the most expensive real estate markets in the U.S.
Reali is a California-based discount brokerage that offers a wide variety of real estate services, including:
- A sliding scale of flat fee listing commissions for sellers
- Buyer rebates of around 1%
- Home trade-ins for people who want to simplify their move
Sellers pay a listing commission between 1% and 2.5%, depending on what package they chose. Those who opt for a trade-in will pay a 5% fee.
Unfortunately, Reali is only available to California sellers. And, their pricing structure means you’ll have to do some math to figure out if you’re getting a good deal.
For example, if you’re selling a lower-priced home, Reali’s fees simply don’t represent much of a discount over a conventional agent.
SimpleShowing is a discount real estate brokerage available to home buyers and sellers in select Florida, Georgia, and Texas markets.
This company offers a 1% listing fee for sellers, with a minimum fee of $2,250. They also offer eligible buyers up to half the buyer’s agent commission in the form of a rebate.
While their 1% listing fee is competitive, SimpleShowing agents handle up to 3x more customers and your choices of agents are limited. You may be matched with a great agent, but you could also work with one who is overextended and unable to fully support your sale.
Sell Your Home for Less
When it comes down to it, the best commission rate — whether it’s 4.5% or 6% — is one that provides maximum benefits to all the parties involved.
That’s why there’s no one-size-fits-all answer to the question of what a “fair” commission is. Each sale is unique, and each seller has different needs.
That being said, we think it’s hard to beat the Clever Real Estate package; a low, flat fee commission of $3,000 — or just 1% if your home sells for more than $350,000.
You’ll also work with a pre-vetted agent who provides a full-service experience at a fraction of the cost. Interested in learning more? Contact Clever today to get started!
Ready to learn everything there is to know about real estate commissions? Read these articles that answer many frequently-asked questions about the process.
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1% Listing Fees— Huge Savings, or a Huge Scam? A 1% listing fee sounds impossibly low, but it’s not — if you understand the math of how they get to that 1%. We explain what you should know in this article.
How to Negotiate Your Real Estate Commission and Save Big: Negotiating with a professional negotiator is a big ask, but it can be done. This definitive guide tells you exactly how to come away from the negotiating table as a big winner.