What is a 1% Commission Realtor?

By 

Trevor Wallis

Updated 

January 29th, 2021

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How it works | Potential savings | Get a 1% listing fee | Negotiating tips | Limited-service agents | Low-commission agents | 1% companies | More ways to save

What is a 1% commission realtor?

A 1% commission realtor is an agent who will list and sell a home for 1% of the final sale price.

Most listing agents and brokers charge between 2.5-3% for this service, so a 1% listing fee could net you big savings.

Note that your listing agent will likely encourage you to offer a full, competitive buyer’s agent fee to incentivize other agents to show your home to their clients.

Buyer’s agent commission rates vary by location and property, but 2.5-3% is typical nationwide.

This means that when you secure a 1% listing fee, you’ll likely pay between 3.5-4% in total commission — about 30-40% savings compared to the typical 5-6%.

» MORE: Sell with a top local agent for just 1% or $3k

Why do agents and brokers work for a 1% listing commission?

A listing agent or broker will offer 1% listing fees to help attract more customers in an increasingly competitive marketplace.

These days, more agents are competing for fewer new listings. And discount real estate companies with built-in savings are becoming more popular and disrupting long-standing pricing norms.

As a result, agents are becoming increasingly flexible when it comes to pricing and service structures, looking for ways to stand out when competing for new business.

How can agents work for 1% fees and still turn a profit?

Some agents are getting creative and flexible about service scope. They may ditch their traditional, full-service models in favor of offering a-la-carte pricing options to attract sellers who may only be interested in a handful of specific services.

Others look to offset their discounted rates by handling a higher volume of customers, boosting their overall revenue to make up for their lower margins per individual sale.

» MORE: How much do real estate agents make?

Do your homework to understand the risks!

Only a few companies have actually figured out how to offer 1% listing fees and still provide the same level of service as a traditional, full-priced agent — so be wary and do your due diligence!

If getting a 1% listing fee is a top priority, make sure you fully understand what each company you’re looking into is offering, how it creates those savings, and where the potential risks and tradeoffs are.

We recommend looking into at least three different services or agents so you can move ahead with an option you feel confident about and that best fits for your specific needs and preferences.

Compare agents and save thousands

Try our free agent-matching service! Clever will get proposals from the top agents in your area — and negotiate discounted rates of just $3K or 1%.

How much can you save with a 1% real estate commission?

Listing with a 1% commission realtor could save you thousands of dollars.

Assuming you offer the full, competitive buyer’s agent fee, you’ll likely pay between 3.5-4% in total commission — about 30-40% less than the national average commission rate of 5.45%.

The actual dollar savings will depend on your home’s value, but here’s a quick look at how much a 1% listing fee could save you at three different price points:

Home price
1% listing fee
Potential savings*
$250,000
$2,500
$5,000
$500,000
$5,000
$10,000
$750,000
$7,500
$15,000
*Compared to 3% listing fee

How to get a 1% listing commission

If you’re looking to get a 1% listing fee, you have three primary options:

  1. Try to negotiate a 1% commission yourself
  2. Hire a limited-service agent
  3. Work with a discount real estate company

Try to negotiate a 1% commission yourself

Negotiating a lower listing fee with a traditional agent is definitely a possibility. But getting a realtor down from 2.5-3% to 1% will be difficult.

Agents not only have to cover a ton of expenses — they also typically split a portion of their fee with their parent brokerage. A rate drop from 2.5% to 1% represents a 60% reduction in that agent’s revenue from the sale. In other words, they may end up losing money on the deal.

As an individual seller, your negotiating power is relatively limited. But here are a few things that could help your chances of landing a lower rate:

  • You're selling a high-priced home
  • There’s a huge amount of buyer demand in your area
  • There’s high competition among agents for new seller clients
  • You let the agent represent you and the buyer, also known as “dual agency
  • You agree to sell and buy with the same agent or brokerage

» MORE: How to negotiate realtor commission

Try Clever's free agent-matching service!

List with a top local agent for 1% — no negotiations required.

Hire a limited-service agent

Some agents may offer fewer services in exchange for a reduced commission. These limited-service agents will either offer each service a la carte, allowing you to pick and choose which ones you want, or offer limited-service packages.

For example, an agent may list your home on the MLS, help you with paperwork, and offer phone support, but leave everything else in your hands.

You'll have to hire a photographer, organize showings and open houses, communicate with prospective buyers, and coordinate closing all on your own.

If you're an experienced seller with the time and motivation to DIY most of the process, you may be able to pay even less than 1% — but you assume a lot of risk and responsibility in doing so.

Before you commit to a limited-service agent, make sure you know exactly what services you are (and aren't) getting and are 100% comfortable with what you're committing yourself to.

» MORE: Limited-service agent vs. traditional realtor

Hire a low-commission real estate company

There are two types of real estate services that may offer built-in 1% listing fees.

Discount real estate brokerages

Discount real estate brokerages are companies that offer built-in low rates for home sellers, no negotiating required. Some services offer 1% fees while others offer a flat-rate commission. The potential savings are significant, but so are the potential risks.

In particular, most sellers who list with discount brokers will compromise on customer service. Most of these companies handle a higher volume of customers per agent to offset their discounted rates, which limits their ability to provide dedicated support throughout the process.

» MORE: The ultimate guide to discount real estate brokers

Agent-matching services

Agent-matching services can connect you with local real estate agents who can help you buy or sell a home. These services are typically free for consumers — the agents pay these companies a small fee for sending customers their way.

The best agent-matching services aren’t just free — they also negotiate built-in discounts on your behalf. Because they send their partner agents a steady stream of new business at zero upfront cost, the agents can lower their rates and still turn a profit on the transaction.

» MORE: Find top agents in your area

Real estate companies that charge 1% listing fees

Company
Average savings*
Average rating
Clever
$7,375
4.9
Redfin
$5,875
3.2
Reali
$6,375
4.6
Prevu
$2,450
4.9
SimpleShowing
$8,000
4.9
*Based on the average savings at four different sale prices compared to a 3% listing commission

» MORE: Which company has the lowest commission rate?

Clever Real Estate

Clever is a free online concierge and agent-matching service that pre-negotiates 1% listing fees (or $3,000 for homes under $350,000) with top local real estate agents in all 50 states.

All of Clever’s partners are highly rated agents from major brands and regional brokerages, such as Keller Williams, Coldwell Banker, Century 21, and more. When you sign up, you’ll be matched with multiple agents in your area so you can interview, compare marketing plans, and choose the right fit for you.

» LEARN: How Clever helps you save thousands without sacrificing service

Redfin

Redfin is a discount real estate brokerage with in-house agents who can help you sell or buy homes in approximately 80 U.S. cities. Redfin charges a 1.5% commission for its standard listing service, but lowers that price to 1% when you sell and buy with the company.

Choosing Redfin can save you a lot of money while also giving you the security of working with the largest discount brokerage in the U.S. However, be aware that Redfin Agents handle roughly 3x more customers than traditional realtors, which will likely limit the agent's ability to provide you with hands-on service and support throughout your sale.

» MORE: Read the full Redfin review

Reali

Reali is a California-based discount brokerage with in-house real estate agents who offer the same general range of services as traditional agents for a 1% listing fee. Note that sellers will be subject to a $5,000 minimum, so the effective rate may be higher than the advertised 1% depending on your home’s sale price.

Like other discount brokers, Reali Agents offer all the services of a traditional agent for a reduced commission. To make up for the low listing fee, Reali Agents work with more sellers than a traditional realtor. This could potentially cause a drop-off in service quality and personalized support.

» MORE: Read the full Reali review

Prevu

Prevu is a discount brokerage offering 1.5% listing fees for sellers working with its team of in-house real estate agents. The company started in New England, but has recently expanded to California as well. It's currently available in New York City; Boston; Philadelphia; Los Angeles; and Fairfield County, CT.

If you're selling a more expensive property, Prevu's 1.5% listing commission rate can save you a lot of money. But it's not necessarily a great choice for mid-range or cheaper homes thanks to Prevu's high minimum commissions that vary by location.

» MORE: Read the full Prevu review

SimpleShowing

SimpleShowing is a discount brokerage offering full listing services for a 1% commission to sellers in Florida, Georgia, and Texas. If you're outside of these three markets, SimpleShowing may refer you to a local partner agent who adheres to its pricing and service structure.

SimpleShowing’s savings are legit, but its in-house agent team is relatively small, meaning you’ll only have a handful of options to choose from and may not find a good fit there. As is the case with discount brokers, SimpleShowing’s agents work with twice as many customers as a traditional agent, which could limit their ability to provide hands-on service and support throughout your sale.

» MORE: Read the full SimpleShowing review

Alternatives to 1% commission realtors

You have more options for selling your home besides 1% commission real estate agents and traditional realtors. Other options can offer more control, convenience, or speed — but they each come with a price.

For sale by owner (FSBO)

You can avoid paying a listing agent commission altogether if you choose to sell your home yourself. While this could potentially save you more money, it also comes with a massive time commitment, extra stress, and more risk.

You have to handle everything yourself — pricing, advertising, coordinating showings, fielding offers, negotiations, contracts, and everything else an agent usually handles for you. If you have a full-time job or are moving out of the area, these steps may be overwhelming.

Plus, you run the risk of pricing your home incorrectly or negotiating poorly, which can cost you all of the money you would save by not working with a listing agent.

» MORE: How to sell your house for sale by owner

Flat-fee MLS companies

Flat-fee MLS companies charge a low, flat-fee to list your home on your local multiple listing service (MLS). The MLS is an agent-only database of listings in an area. Realtors use it to find properties to show potential buyers.

Since sellers can't list their properties on the MLS themselves, they need a licensed real estate agent to do it for them.

Using a flat-fee MLS company is an easy way for people selling FSBO to get their home onto the realtor's database — but that's about all you'll get from these companies.

While you might be able to purchase additional benefits like a yard sign, help with scheduling, and contract reviews, the cost of these a la carte options can add up quickly. If you aren't careful, you could end up paying nearly the same as a low-commission realtor without the full-service benefits.

» MORE: What you need to know about flat-fee MLS listings

iBuyers

iBuyers, like Opendoor and Zillow Offers, are companies that use advanced technology to make all-cash offers on homes, often sight-unseen.

They offer convenience and flexibility, allowing you to sell your home without the hassle of listing it on the open market. Most of the time, you can get an iBuyer offer within 24-48 hours.

But this convenience comes with hefty service fees — usually 5-15% of your home's sale price. You also don't have much power to negotiate with the buyer outside of the options they make available (like flexible closing dates).

While the iBuyer market is expanding, they're currently only available in a few cities. But even if you live in those cities, your property may not qualify. These companies have very strict guidelines for the properties they purchase, making it difficult for many sellers to get an offer.

» MORE: What Is an iBuyer?

Cash buyers

"We buy houses for cash" companies make all-cash offers and buy properties as-is. Unlike iBuyers, these companies will buy nearly any home, no matter its condition.

Cash buyers can be a good option if your property is run-down and you need to sell it quickly. You don't have to make any repairs and there's a low risk of the sale falling through since they aren't financing the purchase through a bank.

Don't expect top dollar from one of these companies, though — their all-cash offers will be significantly below market value. But, if you need to sell a property quickly and don't mind selling it cheap, they could be a convenient choice.

» MORE: We buy houses for cash company reviews and FAQs