Selling your home? Keep an eye on the costs, especially real estate commission rates. A 5% commission is often considered a discount compared to the old 6% standard, yet it’s still below the national average. Here’s what you need to know about 5% commission realtors:
- According to Clever's survey, sellers usually pay around 5.57% in total commission, covering both the seller's and buyer's agent fees.
- Similarly, our study found that most sellers (71%) who worked with an agent paid 5% or more in commission.[1]
- Traditionally, the seller covers the full commission. While the National Association of Realtors (NAR) lawsuit has changed how buyer’s agents are paid, it hasn’t led to lower overall rates — most sellers are still paying 5% or more today.
Want to pay less than the typical 5–6% commission? Clever Real Estate connects you with top agents from brokerages like Keller Williams and RE/MAX for just a 1.5% listing fee — well below the national average of 2.82%.
💰 Get a 1.5% listing fee and save thousands — no negotiating required
How 5% realtor commission works
Understanding how a 5% real estate commission works is key when selling your home.
Before signing a listing agreement, the seller decides on the commission for their agent (the listing or seller's agent) and the buyer's agent. This decision sets the stage for how much each will be paid upon the home's sale.
- Listing agent's commission. This agent helps price, market, and sell the property. They usually earn between 2% to 3% of the sale price. According to Clever's survey, they earn about 2.82% nationwide. For context, Anywhere Real Estate — the parent company of brands like Coldwell Banker and Century 21 — reported an average homesale broker commission rate of 2.41% across its franchise group.[2]
- Buyer's agent commission. The agent who brings the buyer to the table also earns a commission, generally between 2.5% and 3%, with the national average at 2.75%.
- Total commission cost. For a home selling at $400,000 with a 5% total commission, the agents would earn a combined $20,000. The seller typically pays this amount at closing from the sale proceeds.
Clever listing fee example
How to pay less than 5% real estate commission
Looking to sell your home and eager to save on commission without waiting for industry shifts? There are effective strategies to reduce those fees to less than 5%.
Option 1. Use a discount real estate broker
Discount brokers are your go-to for selling your home at a fraction of the typical commission rate. Where most brokers might charge an average listing fee of 2.82%, discount brokers often only ask for 1-2%.
This difference may not sound like much, but it could mean saving $4,000 to $8,000 on a $400,000 home sale. And the best part? The top-notch discount brokers ensure that saving money doesn't mean compromising on service or support. You'll still receive excellent assistance every step of the way, just at a lower cost.
Listing Fee
Customer Rating
Locations
Editor's Take
Overview
Clever is available nationwide.
Option 2. Sell FSBO
Choosing to sell your house without a realtor allows you to bypass the typical listing agent fees, which average 2.83%.
FSBO appeals to those who seek full command over their home sale, presenting an opportunity to save on commission costs.
However, going the FSBO route requires careful consideration of whether the potential savings justify the additional efforts, time commitment, and risks of managing the sale yourself.
Keep in mind these two statistics:
- Studies indicate that homes sold through agents tend to secure nearly $50,000 more on average compared to FSBO sales.[3]
- Our research on FSBO statistics also reveals that over one-third (36%) of sellers make legal mistakes without professional guidance, highlighting the potential pitfalls of navigating a home sale without an expert.
Selling FSBO? Get your home listed on the MLS!
The MLS is a crucial tool in the real estate market. It is the primary database where agents search for properties on behalf of their clients. Being listed there significantly increases your home's visibility to potential buyers.
For FSBO sellers, the answer lies with flat fee MLS listing services. These companies offer a cost-effective way to list your home on the MLS for a low, one-time fee.
Flat fee MLS services not only put your property in front of a vast network of buyer's agents via the MLS but also ensure it appears on popular real estate websites like Zillow and Realtor.com, further boosting your chances of finding the right buyer.
Option 3. Sell to a cash home buyer
Selling to a company that buys houses for cash suits those looking for a quick and hassle-free sale. Here are the key points to consider.
Pros
- Fast closings (1-2 weeks)
- No contingencies, which reduces the risk of the deal falling through
Cons
- Usually pay below market value.
- Less flexibility in negotiating price and terms.
Compare offers from several cash buyers to get the best deal when selling your house for cash. You can do this with a realtor’s help or use a free service like Clever Offers to ensure you get a fair price.
Option 4. Negotiate with an agent directly
When working with a real estate agent, knowing that you can negotiate realtor fees is important. These fees can vary by location, the brokerage, and the services provided; there's always room to discuss a better rate.
However, knowing that not everyone succeeds in these negotiations is also crucial. According to an industry study, only 22% of home sellers could negotiate lower commission rates with their agents.[4] Preparing and understanding negotiation strategies is key if you're considering selling with a realtor and want to try negotiating fees.
FAQ
What exactly is a 5% real estate commission?
A 5% real estate commission typically occurs when the listing agent charges a slightly reduced commission, around 2–2.5%, and pays the buyer's agent commission. Under the traditional home sale, sellers are responsible for paying the buyer's agent commission (2.5–3%), bringing the total real estate commission to around 5%.
In today's real estate market, sellers pay an average of5.57% nationwide in commission fees. However, discount brokerages, such as Clever or Redfin, can offer big savings.
How is a 5 percent commission for a realtor split?
A 5% commission will generally be split between the listing agent and the buyer's agent. Nationwide, the listing agent earns slightly more (2.83%) compared to the buyer's agent (2.66%), although this may vary by market. Each agent may also split their commission with their respective brokerage.
Can I negotiate a 5% commission with a realtor?
You may be able to negotiate a 5% or lower commission with your realtor, but it depends on the price of your home, where you live, and average commission rates in your area, among other factors. To pay a 5% or lower total commission rate, you'll likely need to pay your listing agent a 2% commission — instead of the traditional 2.5–3% — while still offering a competitive buyer's agent commission.
However, real estate commissions are always negotiable; you may be able to negotiate a lower listing agent fee and try to offer a lower buyer agent's fee. However, it can be difficult to negotiate a lower rate with a traditional agent, and studies show most homeowners are unsuccessful. The best way to save on listing fees is with a low-commission real estate agent.
