There are a lot of hidden costs to selling a home, and the largest individual expense is almost always real estate commission. The standard real estate commission is 6% of the final sale price which, using the U.S. median home value of $249,000, comes to $14,940. That’s a lot of money to pay no matter how you slice it.
Many sellers don’t realize they can reduce the amount of commission they pay, sometimes by 50% or more! Recent years have brought a wave of discount real estate companies offering (in some cases) a conventional, full-service selling experience for lower commission fees.
Even if you opt for a traditional agent, a hot market and the rise in competition means that sellers can often negotiate a lower commission themselves.
But which companies offer the lowest commissions, and which companies are legit?
How can you negotiate a lower rate with someone who negotiates for a living?
We cover all that and more.
Table of Contents
- How to Negotiate a Lower Commission Yourself
- Should You Use a Low Real Estate Commission Company?
- Which Companies Offer the Lowest Commissions
How to Negotiate a Lower Real Estate Commission Yourself
While it can be difficult to persuade an agent to work for less money than they usually do, sellers have two main advantages: first, the U.S. real estate market is hot. This means your real estate agent knows that if they refuse to give you a discount, you can probably find another agent who’ll take you on at the lower price point.
This advantage is even greater, of course, if you live in an especially hot market (think San Francisco or Boston), or have a very desirable home that will sell quickly.
Your second advantage is that you probably don’t need all the services the agent is offering. Ask them what they’ll do, exactly, to help sell your home, and they’ll likely answer with a long list of services— marketing, staging, hosting open houses, price negotiation, etc.
But if you don’t need all those services, that can be a great way to open a conversation about a reduced commission. If, for example, you can do your own marketing, have a friend who works as a professional home stager, or are married to a lawyer who can handle closing, you can make a compelling argument that you don’t need their full suite of services.
And most agents will agree that less work should equal less money.
All that being said, the real value of an agent’s commission is relative to how much time and effort they put into a sale. If your home is in great shape and is a surefire bet to get multiple bids the first weekend it’s on the market, you’re a great candidate for lower commission.
But if your home is in a cooler market, or has a unique or narrow appeal, an agent might be reluctant to cut you a discount if they know they’re going to have to spend a lot of time finding a buyer.
Still, it never hurts to ask!
Using a Low Commission Real Estate Company
Using one of the growing number of discount real estate services is another way to save money on commission. The way most of them work is this: a traditional commission is 6%, split between the listing agent and the buyer’s agent.
Since the buyer’s agent is associated with the buyer, and their half of the commission is one of the main enticements for them to bring buyers to your property, these companies can’t do much to reduce that half of the equation.
Instead, these discount services mainly reduce the listing side (i.e. the seller side) of the commission; some offer a lower percentage, and many offer a flat fee.
The one thing that stays consistent is this: Whatever the discount service says you’re paying, you generally have to add 3% buyer’s commission to that.
Which Companies Offer the Lowest Commissions?
So which one should you use? The flat fees, discounted commissions, and sliding rates differ from company to company, and most offer different levels of services. Some have traditional agents, others have you work with a team, and still others are online-only. It can be overwhelming, so we’ve put together this guide listing all the major discount companies, what they offer, and their pros and cons. Good luck!
Clever Real Estate
Clever Real Estate is a nationwide brokerage that will sell your home for $3,000, or 1%, if your home sells for over $350,000. They refer sellers to local agents, so they work with experienced agents who know the local market— this is very important when it comes to pricing, and judging the overall market. The Clever agent offers a full service experience, just like with a conventional agent; the only difference is that they’re only charging $3,000, instead of a percentage-based cut of the final sale price.
How is this possible? Clever vets both their agents and their leads, so these elite agents are able to close these sales at a high enough rate that it offsets any money they’re giving up by not taking a standard commission. In a lot of ways, it’s a win-win for agents and sellers.
- Nationwide network means you can get agents anywhere in the country
- Connects sellers with experienced local agents for a full-service experience
- Interview multiple agents until you find the right one (no cap on agent connections)
- Low, flat fee with no vagaries or fine print
- Agents working for a flat fee may not be as motivated as agents working for a cut of the final price.
Clever has a stellar five star rating on Trustpilot, based on 383 reviews. The vast majority of reviews describe a fast, lucrative sale guided by a local professional.
Clever Offers Top-Rated Agents Who Work For 1% or $3000
Our friends at Clever Real Estate negotiate with top-performing agents so you don’t have to. Start saving thousands today.
Redfin is a national brokerage that will sell your home for a 1.5% listing commission— or 1%, if you also buy with them. One of their main innovations is that they have in-house, salaried agents and team members who collaboratively handle each sale.
While this could benefit sellers by getting more eyes and hands on their listing, some think that the lack of a commission-based pay structure can negatively impact motivation. To put it simply, Redfin agents get paid the same no matter how quickly, or for how much, your home sells for.
- Low listing fee of 1.5% (or 1%, if you also buy with them) can translate to real savings
- An entire team working on your listing can yield great results
- Excellent online interface and website
- There are minimum listing fees, meaning that sellers could pay more than 1.5%
- No commission-based pay means motivation can be uneven
- Team-based structure can be impersonal, and make communication difficult
Redfin has middling reviews, averaging a 3.5 rating (out of 5) across Yelp, Google, and Consumer Affairs. Most of the negative reviews seem to be related to communication issues.
REX offers sellers “2% total commission,” and the way they achieve this is pretty interesting. They charge sellers a 2% (or $9,000, depending on the price) listing commission, which in itself is only 1% off a conventional commission. But they promise to also eliminate the buyer’s agent commission, which potentially saves sellers 3%.
How can they do this? They don’t list on the MLS; instead, they target unassisted buyers, using proprietary (mainly online) marketing and advertising tools. If the buyer doesn’t have a buyer’s agent, the seller doesn’t have to pay that commission. The biggest drawback to this is that it significantly shrinks the pool of potential buyers— meaning the final price might be a lot lower than it could’ve been.
- Lower listing fees of 2%
- Sellers may not have to pay buyer’s commission of 3%
- Low visibility of listing, due to not being on the MLS
- Smaller pool of buyers means lower price
- Some qualified buyers may even be driven away, since REX often asks buyers with agents to pay their own buyer’s agent commission
Redefy operates in nine U.S. states, and will sell your home for a flat $3,500 fee. The catch? You won’t be working with an individual agent, as you would with a conventional sale in which one person handles everything from pricing to closing. Redefy uses a more corporate business model, where each office has a team of in-house specialists who handle all the sales. The Redefy team does most everything a traditional agent does— with the exception of open houses.
Redefy asks sellers to pay $500 up front, and then another $3,000 when the sale is closed. That’s about a 50% savings on the listing side of the commission.
One other important point— Redefy works on a franchise model. That means each office is an independent operation, so customer experiences can vary between franchises. Always check local reviews!
- Redefy will sell your home for a low, flat fee
- Division of labor among specialists can definitely produce an excellent experience
- Sellers who are used to a high-contact, personalized sale with a conventional agent may find Redefy’s business model cold and frustrating
- Asking sellers to pay money up front can seem questionable
- Redefy doesn’t conduct open houses for sellers
- Franchise business model means one office may work totally different from the others
At present, Redefy holds a 4.3 (out of 5) star rating across Birdeye, Google, Yelp, and Facebook. The large majority of reviews are positive, and talk about a fast, efficient sale, though it should be noted that most of them were selling in very hot markets like Colorado.
Like a few other companies on this list, Door uses a corporate office-based structure to replace the traditional “one man band” real estate agent. When you sign on to sell your home with Door, you’ll work with a team of salaried Door employees to price, market, and list your home, and you’ll pay a $5,000 flat fee at closing. Door also uses an online platform where you can manage your listing and receive real-time updates. They offer a full service experience with one exception— Door agents don’t conduct open houses for sellers, though they do conduct private showings.
The potential drawbacks here are fairly obvious: as salaried employees, Door team members could be less motivated than a hungry agent who doesn’t get paid unless they sell your home. (At the same time, it’s possible that three heads are better than one.)
The other drawback is the price point. Considering that, for the average commission of just under $15,000, which is split $7,500 to the listing agent and $7,500 to the buyer’s agent, you’re only saving a couple thousand dollars, might give some sellers pause, especially if they highly value the face-to-face personalized single agent selling experience.
- Working with a team of specialists could produce a higher quality experience
- $5,000 flat fee, paid at closing, does offer some savings— especially for people selling higher-priced properties
- Online dashboard is great for tech-savvy sellers
- Working with a team of salaried employees could produce motivational or communication problems
- The $5,000 flat fee offers less value for sellers with homes nearer the national median value
- Door agents don’t conduct open houses
Door currently holds a 4.8 rating (out of 5) across Google, Zillow, Facebook, and Yelp. The majority of reviews describe a fast, efficient experience.
Home Bay might be the first online-only home selling service. When you sell with Home Bay, you won’t ever interact with your agent in real life— only through Home Bay’s online platform.
Home Bay has a staff of licensed agents, transaction coordinators, and legal advisors who provide their assistance through that platform, advising you on pricing, staging, showings, price negotiation, and closing. But their services stay online; if you need an agent to help run a Sunday open house, you’re on your own.
Home Bay offers a much lower commission than you’d pay if you went with a conventional agent; as little as 0.5%, up to 2%, depending on how much your home sells for. Home Bay also asks sellers to put down 10% of your listing fee up front. Home Bay’s celebrity spokesperson is skateboarder Tony Hawk.
Keep in mind that, as with most of the companies on this list, you’ll still have to pay the buyer’s agent a commission of 3%.
- Home Bay’s “online-only” model could be a godsend for tech-savvy, socially averse sellers, and could become more appealing as we enter an era of social distancing.
- Home Bay’s centralized platform gives sellers an easy-to-access hub to manage all aspects of their sale, from agent communication to offers.
- Sellers who want a personal touch, or need guidance with IRL aspects of the sale, like staging or showings, may find Home Bay’s model impersonal and sterile.
- Home Bay’s fees are roughly on par with most discount services, but they offer significantly fewer services.
- Asking sellers to put down money up front can seem questionable.
Home Bay has a very good rating of 4.4 stars (out of 5) across Zillow, Trustpilot, Google, and Yelp, based on 465 reviews. The large majority of customers reported a fast, easy transaction
Assist-2-Sell is a franchise-based company that offers a full-service selling experience for a flat fee of $2,995. They stress that they offer all the services of a conventional agent, including marketing, pricing, staging, negotiation, and closing.
At the $2,995 price point, this represents around a 50% discount on the median commission, though Assist-2-Sell’s website insinuates that the commission can be more than that, depending on your home’s final sale price.
- Low, flat fee can save sellers thousands.
- Full service experience represents an improvement over many discount companies’ skimpier offerings
- Flat fee commission may rise with your home’s sale price.
- Franchise model can lead to inconsistent results from office to office
Assist-2-Sell’s Pennsylvania franchise currently has a 4.9 star (out of 5) rating on Zillow, based on 209 reviews. Almost all sellers reported an easy, pleasant transaction.
Help-U-Sell is a full service real estate company that charges a flat fee. What that flat fee is, though, will depend on what market you’re in. Their website is vague on specifics, but their testimonials page features photos of people holding up signs saying they’ve saved sums that range between $2,000 and $8,000.
They use the team-based model in which specialists collaborate on each sale, rather than having a single agent shepherd it from start to finish, and they work on the franchise model. That means standards may vary from franchise to franchise, and different offices may offer different services. Help-U-Sell currently operates in 26 states and Washington, D.C.
- Flat fee commission model
- Works in many markets
- Working with a team instead of a single agent can be challenging, especially for sellers who want a personalized experience
- Franchise-based business model means results may vary
Help-U-Sell currently holds a 4.5 rating (out of 5) on Facebook, based on 56 reviews.
A Parting Recommendation
There are a lot of great low commission real estate companies to choose from. If you’re still not sure which one to call up, we can’t recommend Clever Real Estate enough.
Top-rated, full-service agents are willing to work under the 1% or $3000 flat fee model to help you save thousands and sell your home quickly to the highest bidder.
Don’t wait. Reach out to Clever today to get paired with the best agents in your area.
Save Thousands on Commission and Find the Best Local Agents
Our friends at Clever Real Estate negotiate with top-performing agents so you don’t have to. Start saving thousands today.