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Low-commission real estate agents charge as little as 1% of a home’s sale price — though that doesn’t include the buyer’s agent commission of 2–3%. Compare this to the average 2.5% rate for full-service listing agents.
Real estate commissions are ultimately negotiable based on factors like the individual agent’s experience and the potential sale price of the home.
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Why would an agent take a lower commission rate?
Limited services | Limited experience | Strong seller’s market | High home value | Multiple transactions
You’ll be doing more than your realtor in the selling process
Sometimes, you just need a realtor to help you figure out a good price and list your property on the multiple listing service. If you think you’re capable of coordinating showings, following up on offers, and negotiating on your own behalf, then you can probably pay a reduced commission and still get what you need.
If a real estate agent is marketing themselves as low commission (1–1.5% of your final sale price) take these factors into account.
Service level
A realtor may offer standard services but not certain extras, such as photography or open house help — at least, not without additional charge.
Limited service real estate agents
Some states require realtors, at a minimum, to help sellers negotiate offers and counteroffers in exchange for a 1.1% commission.
Experience level
New agents — whether new to the area or new to the profession — may be open to accepting a lower rate in return for gaining experience and building a client base (and positive word-of-mouth). When you interview potential agents, ask them how many homes they’ve sold in your area in the past 12 months. Pro tip: If they’ve closed fewer than 8 sales in your area, you may be able to negotiate a lower commission rate.
Good news: Some realtors agree to list for reduced commission in exchange for wider exposure to potential clients, since marketing themselves to sellers takes a big chunk out of their bottom line. So you could very well find a low commission realtor who still offers a full suite of services.
Selling will be a piece of cake
A successful sale often comes down to the strength of the local market. The higher in demand your home is, the easier it will be to sell.
Seller’s market
In a seller’s market, “many agents are bidding for the same listing. If the house is very pricey or desirable, the agent might be open to taking a smaller fee in exchange for a commission check,” says Jasen Edwards, licensed real estate agent and coach at Agent Advice.
However, in a buyers’ market, agents might be less willing to reduce their rates due to the increased effort and time needed to sell the property.
Home value
Agents may be more willing to take a lower commission rate on higher-valued properties. This gives sellers of more expensive homes more power to negotiate a lower rate with listing agents.
Find out how much your home is worth using an online valuation tool (which will give you a ballpark figure) or a professional comparative market analysis (CMA, or comp).
How a free comp can help you
You can ask a realtor to perform a CMA on your property. They’ll do so for free in order to win your business as a potential client.
Plus, if the CMA finds that you have an in-demand home, you’ve already found an agent who knows that your home will sell quickly. That realtor could be willing to get a lower commission in exchange for an easy sale and fast payout.
You’ll be using the same realtor for two or more transactions
A reduced commission rate may also be possible when the same realtor helps you sell your existing home and buy a new one since they stand to earn a double commission.
“If I’m currently representing a client as their buyer’s agent and they have a property they’re looking to sell, I might be open to negotiating a lower commission rate to accommodate their needs,” said Ivan Lobo, real estate consultant with Toronto-based Made in CA.
Other ways to save money
Selling a house without a realtor (also known as selling for sale by owner, or FSBO) means you’ll bypass the listing agent fee, but you’ll still pay the buyer’s agent fee (2–3%).
You’re likely to net less money by selling FSBO, however, offsetting any savings by cutting out the listing agent. For instance, FSBO homes sold at a median of $225,000 in 2021, compared with $345,000 for those sold with an agent.
Selling to a company that buys homes for cash is an appealing option for when you need to offload a property fast, such as for a move.
With a “we buy houses” company, you won’t pay realtor fees or closing costs, but you’ll only make 50–70% of your home’s market value. On the flipside, iBuyers charge service fees and closing costs, but you’ll sell for 98% of market value.
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