What is a 5% Real Estate Commission?

Trevor Wallis

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Trevor Wallis

June 24th, 2022
Updated June 24th, 2022

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Top 5% commission brands | How a 5% commission works | How much can I save? | FAQs

A 5% real estate commission is when you pay a total of 5% in realtor fees on the sale of your home. In general, this means paying 2–2.5% to your listing agent, and the other 2–2.5% to the buyer's agent — bringing your total commission rate to around 5%. Below, we've reviewed the best 5% commission real estate brokerages and provided some tips for how to save when selling your home.

But be aware that in today's real estate market, the average real estate commission cost is about 5.37% — so a 5% commission isn't a massive discount. In fact, many of the top discount real estate brands offer even lower rates to sellers along with full service and agent support.

Clever Real Estate, for example, offers a 1% listing fee, which reduces your overall realtor fees to just 3.5-4%. You'll still get a top-rated, full-service real estate agent, but you could be saving thousands of dollars compared to what a traditional realtor offers. Try Clever now and get matched with a top local agent!

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

Company
Listing fee
Locations
1% or $3,000
Nationwide
2% or $3,000
Nationwide
🥉 Redfin
1.5% (min. fees vary)
Nationwide (select markets)
2.5% ($9,000 min. fee)
AZ, CA, CO, FL, GA, MD, NV, NJ, OR, PA, TX, WA, DC

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 (1,558 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 June 10, 2022, Clever has a 4.9 out of 5 rating on Trustpilot, based on 1,512 reviews.


Read reviews from real Clever customers here.

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

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Clever Real Estate is the best option for most sellers nationwide because it offers the biggest savings of any discount brand — along with full service from top agents with well-known brokerages like Keller Williams and Coldwell Banker.

Clever's free service pre-negotiates 1% listing fees (or $3,000 for homes under $350,000) with top-rated local agents. Sellers will also pay a competitive buyer's agent commission, bringing your total commission to around 3.5–4%.

On a $400,000 home, listing with Clever would save you up to $7,000 more in realtor fees than if you had a 5% commission!

So why is Clever able to offer such low rates? Because they actually end up saving realtors a lot of time and money. Real estate agents typically spend a lot of their budgets on trying to find new clients, which is something that Clever does for them. Since Clever is helping realtors lower their expenses, those same realtors are able to pass the savings on to you.

You can try Clever for free with no obligation. Interview as many agents as you like until you find the best fit, or walk away anytime.

💰 Compare hand-picked agents, get incredible savings

Find top-rated agents from local brokerages, and get pre-negotiated listing fees of just $3,000 or 1%.

Clever's service is 100% free, with zero obligation. Interview as many agents as you like until you find the perfect fit — or walk away at any time.

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 (2,717 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 (2,717 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.

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Ideal Agent is another low commission brokerage that matches you with a local agent from a brokerage like RE/MAX or Century 21. The company is available nationwide and can be a great way to find a high quality agent.

Ideal Agent pre-negotiates a 2% listing commission with its partner agents. While this is less than the 2.5–3% that a traditional agent would charge, other discount brokerages, like Clever, offer similar services for a fraction of the price.

» MORE: Read the full Ideal Agent review

3. Redfin

💲 Listing Fee

1.5% (min. fees vary)

💰 Avg. Savings

$5,550

⭐ Avg. Customer Rating

3.9/5 (416 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 3.9 out of 5 rating (416 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).

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Redfin is a well-known brokerage that offers a discounted 1.5% listing fee to sellers in most major U.S. cities. Sellers who buy and sell with Redfin in the same year will pay a 1% listing fee.

Redfin agents are fully licensed and offer a similar range of services as traditional realtors. The brokerage uses an online platform and a team-based approach to manage much of the selling process, which may not be ideal for sellers who prefer one-on-one agent support.

» 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 (956 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 (956 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, MD, NV, NJ, OR, PA, TX, WA, DC.

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We don't recommend REX Real Estate for most home sellers. The brokerage claims to offer a 2.5% total commission rate to sellers, but most sellers who list with REX will end up paying about as much as they would with a traditional realtor (around 5–5.5%).

REX's approach involves cutting out the buyer's agent commission and not listing your home on the multiple listing service (MLS). This is incredibly risky because it drastically limits your pool of potential buyers and makes your home difficult to sell. Clever, Ideal Agent, and the other discount brands on this list offer better customer service and lower rates than REX without the risky tradeoffs.

» MORE: Read the full REX review

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

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. For example, on a $350,000 home, you could save $3,500 by going with a 5% commission realtor compared to the standard 6% fee.

Here's a breakdown of how much you could save based on your home price.

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?

When you sell for a 5% commission rate, the savings usually come by working with a listing agent who has reduced their fee.

Sellers who pay a 5% real estate commission usually work with an agent or brokerage that charges a 2–2.5% listing fee. The seller will also pay a 2.5–3% buyer's agent commission, bringing their total commission rate to 5%.

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.

Traditionally, both agents would take home a 3% commission fee, bringing the total rate to 6%. However, in today's market, many real estate agents charge less than that.

💰 Find a Top Local Realtor for LESS than 5%

Selling for 5% is good, 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 just a 1% listing fee — a fraction of the 2.5-3% that realtors traditionally charge
  • 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?

As a seller, it's important to offer a competitive buyer's agent commission. In theory, you could reduce your total commission to 5% by offering a lower buyer's agent fee — but it could make your home more difficult to sell.

The buyer's agent fee is an incentive for buyer's agents to show your home to their clients. If you don't offer a competitive rate, agents will likely 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?

Other ways to get a 5% commission

In addition to selling with a discount real estate agent, there are a few paths you can take to lower your total agent commission to 5%. You can try to negotiate a lower fee with your agent, or you can hire a limited-service real estate 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

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

Aside from working with a real estate agent, there are a few non-traditional ways to get a reduced commission rate on the sale of your house. These options may provide cheaper rates or more flexibility compared to a traditional realtor — but each comes with its own drawbacks.

👉 Jump to: For sale by owner | Flat-fee MLS | iBuyers | 'We buy houses' companies

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?

Keep learning

FAQs about 5% real estate commission

A 5% real estate commission typically occurs when the listing agent charges a slightly reduced commission, around 2-2.5%. Sellers are still responsible for paying the buyer's agent commission (2.5–3%), bringing their total commission to around 5%.

In today's real estate market, most sellers pay around 5.37% in total commission fees. Selling with a 5% commission realtor may save you a few thousand dollars on your sale, but other discount brokerages, such as Clever or Redfin, offer even bigger savings.

A 5% commission will generally be split between the listing agent and buyer's agent. The listing agent may receive slightly less (around 2%) depending on the average buyer's agent commission rates in your area. Each agent may also split their commission with their respective brokerage. Learn more about realtor commissions.

You may be able to negotiate a 5% commission with your realtor, but it depends on the price of your home, where you live, and average commission rates in your area. To pay a 5% total commission rate, you'll likely need to pay your listing agent a 2–2.5% commission — instead of the traditional 2.5–3% — and offer a competitive buyer's agent commission (2.5–3%).

Real estate commissions are always negotiable, but it can be difficult to negotiate a lower rate with a traditional agent. The best way to save on listing fees is by going with a low commission real estate agent. Learn more about the best low commission companies in your area!

You can find a 5% commission realtor near you by looking for low commission brokerages in your area. To pay a 5% total commission rate, you'll need to find a realtor who offers 2–2.5% listing fees. Here are the best 5% commission realtors available on the market today!

Our top picks among 5% commission real estate brokers are Clever Real Estate and Ideal Agent. These nationwide companies offer the best combination of low rates, high-quality agents, personalized service, and overall value for sellers. Depending on where you're located, Redfin may also be a good choice for you, although their agents may not offer as much one-on-one support.

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