Low Commission Real Estate Agents: Is It Worth It?


When selling your home, of course, you want to maximize the profit you walk away with. And one way to do that is to minimize the fees and expenses associated with the selling process, including the commission paid to the agent who lists your property. You may even be considering hiring a low-commission real estate agent who will represent your property at a lower price than other agents in your area.

However, before taking this step, it’s important to consider why low-cost real estate agents charge less than their peers – and how this decision may impact your overall selling experience.

What is the average commission of a real estate agent?

Common wisdom states that the typical real estate commission is 6% of the sale price of the home, split between the buyer’s agent and the seller’s agent, with 3% going to each.

However, this number has tended to drop in recent years. In 2022, the average national commission for real estate agents is 5.37%, according to a study conducted by Clever. The study found that these fees can vary widely depending on the state you live in, ranging from a low of 4.85% in Massachusetts to a high of 5.81% in Ohio.

Not only does the average commission vary from state to state, but it can also vary from sale to sale and agent to agent. In many cases, clients are able to negotiate the commission rate they pay. Even so, these fees will still take a fairly large chunk of your sale proceeds: on a $300,000 sale, 5.37% is over $16,000.

What is a low realtor commission?

Low-commission agent fees can be significantly lower than what you would be able to negotiate with a traditional agent – ​​as low as 1%, in some cases. Companies offering these types of discounted commissions include Clever, which charges a 1% “listing fee” on homes over $350,000, and Redfin, which charges 1% when you buy and sell with them and 1.5% when you sell with them.

Using a flat rate agent is another option to save money when selling your home. Real estate agents and flat fee brokers charge a flat rate for their services that is established in advance, rather than a commission tied to the final selling price of your home. When you use a lump sum deal, the amount your home ultimately sells for doesn’t affect the fees.

How much can I save by using a low cost real estate agent?

Using a low commission agent can save you several percentage points on the selling price of the home. Their fees typically range from 1-1.5%, compared to a national average of 5.37%. Continuing the example of the $300,000 house, the savings are over $10,000. A 5.37% commission on the sale would be $16,110; but 1% is only $3,000 and 1.5% is $4,500.

Remember, however, that even if you use a low-cost agent to represent you, as the seller, you will still be responsible for paying the buyer’s agent’s commission.

Risk of using a low commission real estate agent

Although you pay less out of pocket when working with a low commission agent, there are also some downsides to consider.

  • Less attention: Consider the phrase “you get what you pay for” when choosing to work with a low commission agent. Because they earn less on each sale, they must close a higher volume of transactions than traditional agents to earn the same amount of money. This means that you probably won’t get the same level of attention or service that you otherwise would.
  • Lower profit: The lack of experience you may have with a low commission agent can impact the final selling price of your home. These agents may not be as savvy when it comes to setting an appropriate asking price or attracting buyers. And if they don’t know your specific local market very well, you lose a lot of your expertise, which can result in a lower selling price than you could have obtained.
  • Dual agency: Dual agency, in which a single agent represents both buyer and seller in a transaction, is legal in many states. This is not always a problem, but it carries potential risks of conflicts of interest. And an agent who only earns 1% commission may be more tempted to represent as many clients as possible to increase their volume.


Looking for other ways to save money when selling? Here are some options.

  • Negotiation committee: In many cases, real estate agents or brokerages may be willing to lower or lower their fees, especially when the home in question is likely to sell for a high price.
  • iBuyers: These online companies, which offer quick deals to sellers, cut real estate agents out of the process. However, there are downsides to consider. Because iBuyers need to make a profit, they typically buy homes at less than market value. And they often charge a fee that can be almost the same amount you would have paid in real estate commissions.
  • FSBO: Some home sellers choose to skip an agent and sell on their own – called an FSBO or “for sale by owner” listing. This route will save you from having to pay a commission, it’s true, but what you save in money you can pay for in the time and effort required.

Next steps

When looking for a real estate agent or broker to list your home with, it’s always a good idea to do your research thoroughly. This should include interviews with several candidates. Ask everyone what their commission is, as well as their knowledge of your community and level of experience – both in general and with houses similar to yours. It can also be a good idea to ask friends and family for recommendations of agents they have had good experience working with.



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