4.5 Percent Real Estate Commission | What’s a Fair Rate?

• 

  Written by Thomas O'Shaughnessy

• 

  Edited by Kristy Snyder

Is a 4.5% real estate commission worth it? | How a 4.5% real estate commission works | How much can I save? | Top 4.5% commission companies

One of the biggest costs of selling your home is the real estate commission, which is usually 6% of your final sale price.

A 4.5% commission rate might not seem like a huge discount, but the savings add up quickly. If your home sells for $500,000, you’d walk away from the closing table with an extra $7,500!

While some agents offer commission savings by cutting corners, the best 4.5% commission real estate brokerages offer low rates without any service trade-offs. They’re a great fit for home sellers who want to save on realtor fees without sacrificing the hands-on support of a traditional agent.

Where to find a 4.5% real estate commission

» JUMP TO: Our full reviews for the top 4.5% real estate commission companies

How does a 4.5% real estate commission work?

Companies that offer a 4.5% real estate commission rate typically get there by cutting the listing agent’s fee in half.

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. 

How much can I save with a 4.5% real estate commission?

The difference between a 6% and 4.5% commission sounds small. But it could translate to thousands — or even tens of thousands — of dollars in savings.

On a $500,000 home sale, a 6% total commission is about $30,000. If you paid a 4.5% total commission instead, you’d save about $7,500 in realtor fees.

To see how much you can save, enter your home’s estimated sale price into the 4.5% real estate commission calculator.

4.5% real estate commission calculator

Is a 4.5 percent real estate commission worth it?

Whether a 4.5% commission is a good deal depends on where the savings come from. When looking for commission savings, you want a brokerage that offers competitive rates without compromising service.

In a typical real estate transaction, the seller pays a total commission of 5–6%, half to their listing agent and half to the buyer’s agent. A 4.5% commission usually means the listing agent cuts down their share of the commission.

If the listing agent doesn’t give your home as much attention as their full-priced listings, the lower commission may not be worth the trade-off.

Sometimes, a listing agent may suggest lowering your total commission by offering less money to the buyer’s agent. “But the whole point of the buyer’s agent commission is to incentivize agents/buyers to come see the property so you can increase competition and get the best offer,” cautions Florida-based real estate agent Drake Shadwell.

If you offer buyer’s agents less commission than the norm, they may not encourage their clients to make an offer on your home.

In other cases, a listing agent may offer a variable commission, which means they agree to lower their rate if they can find a buyer themselves. This approach is also known as dual agency. However, this too can negatively affect your home sale.

“When a listing agent has a variable rate, this must be disclosed in the MLS in many markets,” says Kristyn Grewell, who has 15 years of real estate experience. “Buyers agents and their clients may feel at a disadvantage competing against buyers who are working with the listing agent, so they simply don’t make an offer.”

The best brokerages offering a 4.5% real estate commission (or less!)

Choosing the best 4.5% commission real estate company for you means finding one with experienced agents, excellent service, and, of course, low rates. We researched dozens of discount brokerages to help you find the right fit for your home sale.

🏆 1. Clever Real Estate

The best low commission real estate company for most home sellers is Clever Real Estate. It offers a full-service, top-of-the-line sale experience for a total commission of 4.5% — or even lower — depending on your home’s final sale price and the average buyer’s agent commission in your area. 

Clever offers a free nationwide service that connects you with top-rated realtors in your local market, including agents at trusted brokerages like Keller Williams and Century 21. Clever also pre-negotiates a low 1.5% listing fee for you — compared to the 2.5–3% rate that most agents charge. 

Finding an agent with Clever is a win-win. You get to work with a top-selling agent with a proven track record and save thousands in commission fees. Contact our friends at Clever to get started!

2. Redfin

Redfin is one of the biggest discount real estate brokerages in the U.S. It advertises 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? It uses a team-based service model where 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 works out great for many sellers, but negative customer reviews say it lacks a human element.

Redfin’s service model can also lead to some hiccups, particularly if you have a complicated selling situation. 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.

» READ: Our full Redfin review

3. SimpleShowing

SimpleShowing is a regional 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 $3,500. That means your total commission should be around 4% if you offer a typical buyer’s agent commission.

While their 1% listing fee is competitive, SimpleShowing agents handle up to 5x as many customers as a typical realtor, and your choice of agents is limited. If hands-on service is a priority, we recommend comparing SimpleShowing with other 4.5% commission agents in your area to find the best fit for your individual situation.

» READ: Our full SimpleShowing review

4. Reali

Reali is a California-based discount real estate company that offers several different home selling packages, with listing fees as low as 1%.

Sellers pay a total commission between 4% and 5.5%, depending on what package they choose. 

Unfortunately, Reali isn’t currently available outside California. And, its 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 $5,000 minimum fee simply doesn’t represent much of a discount over the standard listing fees most conventional agents charge.

» READ: Our full Reali review

5. Prevu

Prevu is a 4.5% real estate commission company that offers savings for home sellers and buyers in a few major cities, including Los Angeles, New York City, and Philadelphia. 

Unlike many of its competitors, Prevu focuses more on creating value for buyers 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 are a lot higher than most of the other 4.5% commission companies on this list. This means the advertised savings only kick in if you’re buying or selling a high-priced home.

» READ: Our full Prevu review

6. Ideal Agent

Ideal Agent is a free, nationwide service that introduces home sellers to experienced realtors at traditional brokerages. Like Clever, it creates savings by negotiating discounted listing fees with local agents.

Ideal Agent charges a 2% listing fee, so it’s a bit less affordable than the other companies on this list. Altogether, selling with Ideal Agent will cost you 4.5–5%, depending on how much you offer the buyer’s agent.

» READ: Our full Ideal Agent review

Ready to 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 listing fee of 1.5%, which will save you thousands compared to the 2.5-3% listing fee that most realtors charge.

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!

FAQ about 4.5% commission agents and companies

Methodology

Since most companies charge minimum commission fees on homes below a certain price point, we calculated average savings based on what you’d pay across four common price points — $100,000, $250,000, $500,000, and $750,000 — compared to a standard 3% listing agent commission.

Note: pricing data, locations, and other data points are current as of when this article was last updated.

Related links 

Ready to learn everything there is to know about real estate commissions? Read these articles that answer many frequently-asked questions about the process.

What Companies Offer the Lowest Real Estate Commission Fees? When you’re looking to save on commission, it pays to shop around. We’ve ranked and reviewed all the best low commission real estate companies so you can find what service offers the cheapest rates — and best dollar-for-dollar value — in your area.

The Best Discount Real Estate Broker for Every Budget: You’ve probably heard the expression, “if it sounds too good to be true, it probably is.” Does that apply to discount brokers offering huge discounts, or is there some truth to their claims? Read on for a straight answer.

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 — and provide a complete list of the best 1% commission real estate companies.

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.