What is a 5% Real Estate Commission?

Trevor Wallis

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Trevor Wallis

May 24th, 2021
Updated May 24th, 2021

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How a 5% commission works | How much can I save? | Sell for 5% (or less!) | Find low commission agents | 5% companies | Negotiate a cheaper rate | Other ways to save

What is a 5% commission in real estate?

In many parts of the U.S., realtor fees typically cost 6% of the home's sale price. If you can secure a 5% real estate commission, you'll pocket a bit more money from your sale.

On a $350,000 home sale at a 5% commission rate, you could save $3,500 compared to the standard 6% fee.

Getting a cheaper rate puts money back in your pocket, but you don't have to settle for a 5% commission. Some discount services, like Clever Real Estate, offer even bigger savings.

Clever pre-negotiates 1% listing fees with local agents (or $3,000 for homes under $350,000), reducing your total commission cost to 4% or less. You'll get the support of a full-service agent from a top brokerage like RE/MAX or Century 21 at a third of the typical price.

» SAVE: Sell with a top local agent for 4% total commission (or less!)

How much can you save with a 5% real estate commission?

Depending on the average rates in your area, lowering your total realtor fees to 5% could save you money. A 5% real estate commission isn't a massive discount, but it could slash your bill by hundreds or thousands of dollars — especially for more expensive properties.

Home price
5% commission savings*
$200,000
$2,000
$350,000
$3,500
$500,000
$5,000
$750,000
$7,500
*Compared to a standard 6% commission rate

» MORE: Find the best low commission real estate companies

How does a 5% commission work?

In most real estate sales, the total commission comes out of the seller's proceeds at closing. It's then split between the listing agent and the buyer's agent.

If the seller pays a 6% fee (as they would in most conventional transactions), both agents take home 3% of the property's sale price.

When you sell with a 5% commission rate, the savings usually come by working with a listing agent who lowers their rate to 2%. Realtors accept lower listing fees to help them stand out from all the other agents who are vying for your business.

All this competition can help you lower your total commission without taking a risky approach like listing your house "for sale by owner."

💰 Sell with Clever for LESS than 5%

Selling for 5% is great, but Clever has pre-negotiated even better rates with realtors from top brokerages like Berkshire Hathaway and Keller Williams.

  • When you find your agent through Clever, you get the same full-service experience for a fraction of the typical cost: a flat $3,000 listing fee — or just 1% for homes over $350,000.
  • Clever sellers save an average of $9,000 and get offers 2.8x faster than the national average.

Try our free, no-obligation service to find top local agents — and never pay full commission again!

Why does the buyer's agent commission stay the same?

You could also pay 5% total commission by offering a lower buyer's agent fee — but it could make your home more difficult to sell.

This fee is an incentive for buyer's agents to "sell" your home to their clients (that's why they're sometimes called "selling agents"). If you don't offer a competitive rate, agents may steer their clients toward other sellers who do.

Note that competitive buyer's agent rates vary by area. If the market conditions are right, your listing agent may give you the green light to offer a slightly lower commission that's in line with what other sellers are offering.

» MORE: Do sellers pay buyer's agent commission?

How to sell your home for 5% commission

There are a few paths you can take to lower your total agent commission to 5% while still offering a full buyer's agent fee:

Companies that sell your home for 5% total commission (or less!)

Some companies provide built-in listing fee discounts for sellers, allowing them to sell their homes for 5% total commission or less. These companies come in two forms:

  • Discount real estate brokerages have in-house real estate agents who work for a discounted rate.
  • Agent matching services connect you (usually for free) with top-rated local agents who agree to sell your property for a pre-negotiated listing fee.

Company
Avg. savings*
Avg. customer rating
$7,375
4.9
$3,750
4.9
$5,550
3.2
-$325
4.7
*Based on four common sale prices compared to a 3% seller's agent commission

1. Clever Real Estate

Clever Real Estate

Clever Real Estate

Learn More

💲 Listing Fee

$3,000 or 1%

💰 Avg. Savings

$7,375

⭐ Avg. Customer Rating

4.9/5 (1,004 reviews)

✍️ Editor's Take
Pros
Cons
Reviews
Locations

Clever is a quick, easy, and free way to find a top-rated local agent. And, unlike many similar companies, Clever pre-negotiates big discounts on your behalf, so you can save thousands without sacrificing on service.


Try Clever for free — save thousands on commission

  • Free, nationwide agent-matching service that partners with full-service local agents from conventional brokerages like Keller Williams, Century 21, and RE/MAX
  • Provides multiple agent matches so you can interview, compare marketing plans, and choose the best fit
  • Pre-negotiates low rates on your behalf — you get full service for a flat $3,000 listing fee, or just 1% if the home sells for more than $350,000
  • If you buy with Clever, you could get a check worth up to 0.5% of the home price
  • You may not get matched with an agent from your preferred real estate brokerage.
  • Agents may not provide premium services like drone photography and professional home staging.

As of April 2, 2021, Clever has a 4.9 out of 5 rating on Trustpilot, based on 974 reviews.


Read reviews from real Clever customers here.

Clever has pre-negotiated low commission rates with top agents in all 50 states, Puerto Rico, and Washington, DC.

SHOW MORE

Clever is a free agent matching service that pre-negotiates 1% listing fees (or $3,000 for homes under $350,000) with top local agents nationwide. You'll be able to interview and compare several agents from well-known brokerages like Keller Williams and Coldwell Banker before choosing the one that best fits your needs.

» SAVE: Sell with a top local agent for just 1% or $3,000

2. Ideal Agent

Ideal Agent

Ideal Agent

Full Review

💲 Listing Fee

2% (min. $3,000)

💰 Avg. Savings

$3,750

⭐ Avg. Customer Rating

4.9/5 (2,010 reviews)

✍️ Editor's Take
Pros
Cons
Reviews
Locations

Ideal Agent can match with a great agent from a traditional brokerage. But its 2% listing fee makes Ideal Agent a lot more expensive than other full-service discount brands.


Read the full Ideal Agent review.

  • You'll get a full-service agent from a traditional brokerage
  • It's free to request an agent match, and you can walk away at any time
  • Ideal Agent costs more than most other full-service, low commission companies
  • You'll only get matched with a single realtor — most similar services recommend multiple agents so you can compare your options and pick the one you like best

Ideal Agent has a 4.9 out of 5 rating (2,010 reviews) across popular review sites like Google and Trustpilot.


Read reviews from real Ideal Agent customers here.

Ideal Agent is available to home sellers nationwide.

SHOW MORE

Ideal Agent matches you with a local full-service agent who works for a well-known brokerage like RE/MAX or Century 21. The company pre-negotiates a 2% listing commission with its partner agents, but you may not have many choices if the one you're matched with doesn't fit your needs.

» MORE: Read the full Ideal Agent review.

3. Redfin

💲 Listing Fee

1.5% (min. fees vary)

💰 Avg. Savings

$5,550

⭐ Avg. Customer Rating

3.2/5 (287 reviews)

✍️ Editor's Take
Pros
Cons
Reviews
Locations

Redfin offers real savings and a proven brand. But sellers could compromise on service — especially agent experience and availability.


Read the full Redfin review.

  • If you buy and sell with Redfin, you'll get a 0.5% listing fee discount
  • Redfin gives its listings premium placement in its popular home search app
  • If finding the right agent is a top priority, you'll have limited options Redfin only has a few agents in each of its markets
  • Redfin agents handle more customers at once than the average realtor, so they may not be able to provide as much personalized service

Redfin has a 3.2 out of 5 rating (287 reviews) across popular review sites like Google and Yelp.


Read reviews from real Redfin customers here.

Redfin is available in 80+ U.S. markets (see all locations).

SHOW MORE

Redfin offers a 1.5% listing fee to sellers in more than 80 U.S. cities. But, if you both sell and buy with Redfin's in-house agents, you'll receive a 0.5% commission rebate, dropping your listing fee rate to 1%. Be cautious, though — Redfin agents handle a lot of transactions which could limit how much dedicated service they can provide.

» MORE: Read the full Redfin review.

4. REX Real Estate

REX Real Estate

REX Real Estate

Full Review

💲 Listing Fee

2.5% ($9,000 min.)

💰 Avg. Savings

-$325

⭐ Avg. Customer Rating

4.7/5 (886 reviews)

✍️ Editor's Take
Pros
Cons
Reviews
Locations

REX’s promise of huge savings is misleading. Its advertising misrepresents the significant risks of its pricing model and marketing approach. And its high minimum fees mean that many sellers won't save anything.


Read the full REX Real Estate review.

  • REX's approach is incredibly risky — but if the gamble pays off, you could save about 50% on realtor fees
  • Like other full-service brokerages, REX agents provide in-person services and support
  • REX's 2.5% listing fee doesn't save you much — many full-price agents charge similar rates
  • REX doesn't list your home on the MLS, so up to 90% of buyers may not even know it's for sale
  • This risky marketing strategy seems likely to fail, so you may not save anything on commission

REX has a 4.7 out of 5 rating (886 reviews) across popular review sites like Google and Zillow.


Read reviews from real REX customers here.

REX is available in the following areas: AZ, CA, CO, FL, GA, IL, MD, MA, NV, NJ, NY, NC, OR, PA, TX, UT, VA, VT, WA, and DC.

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REX Real Estate advertises a 2.5% total commission rate for sellers — but that rate is misleading. REX cuts out the buyer's agent commission and doesn't list your home on the multiple listing service (MLS). This is incredibly risky because it limits your pool of potential buyers and could make your home difficult to sell.

» MORE: Read the full REX review.

Negotiate a lower commission with your listing agent

It's possible to negotiate a lower listing fee, but most agents will be hesitant to lower their rate. Still, your chances of negotiating a discount go up when you check at least one of these boxes:

  • There's a lot of buyer demand in your area
  • A lot of local agents are competing for new business
  • You're selling a high-value property
  • You agree to both buy and sell with the same agent or brokerage

» MORE: How to negotiate a lower realtor commission

Hire a limited-service real estate agent

Limited-service real estate agents provide less support and fewer services to sellers for a low fee. These companies often offer a la carte pricing, allowing you to only pay for the services you need an agent to handle for you while you manage the rest of the sale.

With a limited-service agent, you could pay much less than 5% total commission — but you'll need to be comfortable investing the time and energy into handling a bulk of the sale on your own.

» MORE: What is a limited-service real estate agent?

Alternatives to paying a 5% real estate commission

For sale by owner (FSBO)

You can avoid realtor fees completely by selling FSBO. This is a great option if you're comfortable handling the entire sale yourself. But you'll have to decide if the savings are worth the extra responsibilities and risks that come with a DIY sale.

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

Flat-fee MLS companies

Flat-fee MLS companies list your home on the multiple listing service — an agent-only database of properties for sale in your area. You can pay a low, flat fee to get your home in front of buyer's agents (and on popular listing sites like Zillow and Realtor.com), but you'll have to manage the rest of the sale on your own.

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

iBuyers

iBuyers, like Opendoor and Zillow Offers, use advanced technology to make all-cash offers on properties. These companies let you sell your home for a competitive price without listing on the open market. However, they're only available in a few cities and come with strict guidelines for the properties they'll buy, so very few sellers will actually qualify.

» MORE: What is an iBuyer?

"We buy houses" companies

If you need to sell your property quickly, a "we buy houses for cash" company can make you an all-cash offer, no matter the property's condition. However, this offer will be well below market value since these companies plan to fix up and resell the property for a profit.

» MORE: Should you sell to a "We buy houses for cash" company?

Better real estate agents at a better rate

Enter your zip code to see if Clever has a partner agent in your area.

If you don't love your Clever partner agent, you can request to meet with another, or shake hands and go a different direction. We offer this because we're confident you're going to love working with a Clever Partner Agent.