4.5 Percent Real Estate Commission Explained

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Clever Real Estate

Updated 

October 30th, 2019

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The current national average for Realtor's commissions is 6%. Agents might be willing to accept less than that based on their skills, the listing, and the temperature of the market. Your best bet is always going to be a flat-fee agent. Here's why.

Updated October 30, 2019

The average real estate commission rate nationwide is 6%, which is typically split down the middle between the listing and buyer’s agents involved in the sale.

Some real estate companies, like Redfin, offer their services for 1.5%, as opposed to the typical 3%. When you factor in non-negotiable buyer’s agent commission (3%), this brings your total fee to 4.5%. That means you’re saving as much as 25% on realtor fees.

While that sounds like a pretty great deal, there’s often a catch: Redfin, for example, isn’t available everywhere, has minimum fees that can push its rates over 2%, and only lets you work with its in-house agents.

In contrast, Clever negotiates heavily reduced rates with top-rated agents nationwide from major brands like Keller Williams, RE/MAX, and Century 21. Our partners offer full service and support for a flat $3,000 — or just 1% if your home sells for more than $350,000 — saving you up to 50% on commission fees.

> Get in touch to learn more and interview top, low-commission agents near you.

There are no catches, upfront costs, or strings attached. Our referral service is 100% free and there’s never any obligation to move forward with any of our recommendations.

In the meantime, read on to learn more about 4.5% commission fees: how they work, red flags to look out for, and how to save even more without sacrificing service.

Why Would a Realtor Agree to a 4.5% commission?

It all depends on the market, the listing, and the agent!

Remember, the buyer’s agent generally gets 3%, so if your listing agent agrees to a 4.5% commission rate, they are likely only receiving 1.5% themselves. They still have to pay half to their broker as well.

Why would an agent work for a lower commission?

One of the most common reasons that an agent might be willing to reduce their commission rate is that they are just starting out in real estate and hope to gain experience with more listings. However, this type of agent is not likely to give you the high-level professional service you deserve.

Another reason a realtor would only charge 4.5% is is that they aren’t planning to offer you a full-service experience.

In other words, maybe they’ll help you list your property on the MLS, but the service and support ends there.

Before you get excited about winning a negotiation for such a low commission, be sure you understand why the agent is willing to take it. You don’t want to get the short end of the stick.

How Do You Negotiate a Realtor Commission?

First, ask the realtor you’re considering if their rates are flexible. If not, you may want to interview other agents.

Secondly, be sure you understand what you will compromise if you are able to negotiate a lower rate. Will they still provide the same services?

You may be able to negotiate a rate below 6% but not all the way down to 4.5%. If you’re still getting the services you want, that may work for you.

Or, you can skip the negotiation entirely and choose to work with a Clever Partner Agent, who will provide full service for a low flat fee.

List with Clever, save thousands!

Work with a top-rated, full-service agent for a fraction of the price.

How to Save on Real Estate Agent Commissions — Without Sacrificing Service

If you’re looking to sell your home and save on commission but don’t want to sacrifice on service, Clever can help.

Clever connects you with top-rated, local agents from major brands or regional brokerages (Keller Williams, RE/MAX, Century 21, etc.) Our Partner Agents have agreed to work for a flat fee of $3,000— or 1% if your home sells for more than $350,000.

While you’ll still need to pay the buyer’s agent 3% (your listing agent doesn’t control that), you’ll still be saving thousands of dollars. In fact, as of 2019, sellers who listed with Clever saved an average of $10,000 per transaction.

Why are our Partner Agents willing to work for less? Real estate agents normally have to invest a considerable amount of their time and resources into acquiring new business for themselves. Of course, they don’t get paid when they sign new customers — they get paid when they sell homes.

When agents work with Clever, they get a steady stream of new clients, meaning they can spend more time selling homes instead of selling themselves. In effect, they’re able to generate more revenue with less effort — and those savings get passed on to you in the form of a reduced commission rate.

How Much Will You Save When You Sell With Clever?

If you sold your house for $325,000 with a traditional listing agent, you’d have to pay approximately 3% to both agents involved in the sale — that’s as much as $19,500 in commission fees due at closing.

If you sold the same home with Clever, you’d pay a flat fee of $3,000. That flat rate, plus the buyer’s agent commission, add up to $12,750. In other words, you’d save $6,750 on the sale, and all you did was connect with your listing agent via Clever instead of on your own.

Don’t compromise on the services you deserve as a home seller! Work with a Clever Partner and get the exact same level and quality of service for a fraction of the cost.

Want to learn more? Fill out this form and we’ll be in touch to answer your questions and connect you with one of our top-rated Partner Agents in your area!

Top FAQs About 4.5% Real Estate Commissions

1. Do real estate agents make a base salary?

No, they do not. The commissions they make from helping clients buy and sell homes are the only income they have.

2. Do Realtors make a lot of money?

Considering the work they do, real estate agents don’t make as much money as many think. They have to pay for subscriptions to the marketing tools they use, and they split their income with their broker. They also have to pay for the marketing efforts, car maintenance, and gas that they use in their business.

3. Does a for sale by owner (FSBO) seller pay realtor fees?

If you do a FSBO you do not pay a listing agent, but you have to do all the work to attract buyers and negotiate on your own. You will have to pay an attorney to handle the paperwork, and you’ll likely still have to pay a 3% commission to the buyer’s agent.

4. Do you pay realtor fees when buying a house?

In a typical home sale transaction, the seller will be on the hook for the full commission fee. That said, many sellers will build the price of the commissions into the listing price for their home, so in a way, home buyers share in the realtor fees.

5. Are realtor fees included in closing costs?

Yes, at closing all fees are paid. Sellers pay their expenses (including commissions) from the proceeds of the sale and the buyer brings money for a down payment, escrow account, fees, and more.

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