The traditional, standard 6% real estate agent commission is quickly becoming a thing of the past. Discount real estate companies are changing the real estate game, offering sellers a new way to list homes at a much lower cost.
However, not all discount real estate companies provide all the services homeowners need to successfully sell for top dollar.
Get connected with a real estate expert to weigh all your options and choose the company that's right for you.
In the meantime, here's a comprehensive look at the top five discount real estate companies and how they can save you commission costs.
What is a discount real estate company?
For decades, if you wanted to sell your home you had to work with a traditional real estate agent who would charge a standard 6% commission fee with 3% going to the seller's agent and 3% would go to the buyer's agent. You as the seller would have to cover both agents' realtor fees.
What most home sellers don't know, is that you don't actually have to pay 6% in commission. There's no universal set rate. Real estate commissions are negotiable and this is where discount real estate companies comes in.
Discount real estate companies offer an alternative to the traditional commission model. Instead of taking a large percentage of your home sale, they will only charge a low flat-fee, or a set, low commission rate. While prices vary among discount realtors, you'll typically find discount agents charge a flat fee of around $3,000, or a low 1% commission.
Discount agents are able to take a cut in commission by working with a higher volume of clients and by receiving high-quality, vetted leads, allowing them to save time, money, and resources on client acquisition. These savings then get passed on to you with a lower commission rate.
For example, if your home sells for $250,000 with the standard 6% commission, you'll be paying $15,000 in realtor fees. By using a discount realtor who charges only $3,000, on that same house you'll only be paying $10,500 in commission, saving you $4,500.
Why use a discount agent?
While traditional real estate agents may counter with the mantra “you get what you pay for,” that's not necessarily the case with discount real estate agents. With a discount agent you can get the best of both worlds — a full-service agent but at a fraction of the cost.
For instance, you'll find full-service, discount agents who agree to work for a lower rate but still provide all the same services, support, and benefits of a traditional agent, including conducting a comparative market analysis (CMA), competitively pricing your home, listing and marketing on all major sites, and helping with staging, showings, negotiations, contracts, closing, and more.
And as more new and innovative technology emerges, selling a home is becoming more streamlined and convenient than ever. Discount agents are effectively utilizing the changing technology to create user-friendly and seamless online platforms so agents can handle and negotiate more real estate transactions that cost them and sellers less.
What are the top discount real estate companies?
One of the more well-known discount real estate companies, Redfin connects sellers with one of their internal agents. This realtor sticks with the seller throughout the entire selling process, and charges a commission fee as low as 1% plus the buyer's agent's 3% commission.
However, you'll only see that 1% if you also buy a home through Redfin and if you're in certain real estate markets. Otherwise, your commission rate will start at 1.5% with a minimum-market based commission that varies by location.
If you list with Redfin, your Redfin agent will meet you in-person and walk through your home to prepare a CMA, recommend any repairs, and help price your home. They'll also provide professional photos and a 3D virtual tour of your home so buyers can see every inch of your home.
Your agent will help you with showings, negotiations, appraisals, contracts, and see you through closing.
While Redfin does offer full-service agents, you may not be able to utilize their services as Redfin doesn't operate nationwide — if you're in North Dakota, South Dakota, Wyoming, Montana, Alaska, or Louisiana, you're out of luck.
Operating in 60+ cities, Redefy is a discount broker who employees full-service real estate agents to help sellers list and sell their homes, for a flat fee of $3,500 ($500 due up front) on homes under $1 million, and a 1% commission on homes sold over that. Sellers are still responsible for the additional cost of the buyer's agent commission.
With Redefy, you work with a team of their agents who will work with you throughout the entire selling process, starting with an in-home consultation and CMA. They'll also assist with professional photos, managing buyer offers, negotiations, contracts, and closing.
Redefy has also rolled out Redefy DIY in Florida and Texas where you'll be able to pick from three paid packages and skip working with an in-person agent altogether, completing your entire real estate transaction online.
However, know Redefy won't assist you if you're interested in hosting an open house. And unfortunately, if you don't live in one of their operating cities, you won't be able to utilize any of their services.
REX combines new technology and in-person real estate agents to help list, market, and sell your home for a low 2% fee.
But one of REX's features that differs greatly from the other discount realtors is their target marketing model — they don't include a MLS listing.
So rather than listing your home on the MLS, REX uses AI, machine learning, and data technologies to target buyers online and offline to find the right buyer for your home. In theory, this brings in buyers who do not have agents and avoids the additional costs of a buyer's agent commission.
To list with REX you'll be partnered with a REX agent who will come out to your home for a CMA and provide you with a suggested listing price. Your agent will also set you up with a professional photographer, assist with open houses, buyer offers, negotiations, contracts, and closing.
Currently, REX only operates in a limited number of markets; as of August 2019 the service just over 20 metro areas.
And again, keep in mind that the MLS is the main tool for all real estate agents as well as the source for all major third-party listing sites. Without an MLS listings you'll be limiting your potential buyer pool.
Home Bay is a discount real estate company that operates entirely online. You'll never work with an in-person agent, rather, you'll use their online platform to do everything from pricing and listing your home to handling buyer offers, contracts, and closing.
To get started with Home Bay you'll go to their online platform, enter your home's information and follow a task list to set up your MLS listing, schedule your photography appointment, request a yard sign, and set your listing price. Their platform also allows you to schedule open houses, review offers, and close, all online.
Home Bay's fee model is based on how much your home sells for so not every seller will pay the same with Home Bay. For instance, if your home sells for $250,000 you pay $2,500, but if your home sells for $355,000 it costs $3,250. No matter what, you will have to pay 10% of your total fee before you can list.
Clever Real Estate
Clever is a nationwide, online referral service that connects buyers and sellers with a local, full-service real estate agent who will sell the home for a flat fee of $3,000 or 1% commission if the home sells over $350,000.
Clever only partners with top-rated, full-service real estate agents from major brands and regional brokerages such as Keller Williams, RE/MAX, and Century 21 who have over five years of experience in real estate, ensuring you receive an agent with experience and expertise.
You'll be connected with a local Clever Partner Agent who will help you throughout the entire selling process, providing the same services and support of a traditional agent but at a low cost. Your Partner Agent will provide staging tips, professional photos, a yard sign, lock box, and list your home on the MLS and hundreds of other sites.
They'll also help with buyer negotiations, showings, inspections, and closings helping you navigate all aspects of selling your home. Plus, because your Partner Agent is local, they know your local market inside and out, giving them insight to competitively price your home and know what buyers are looking for in homes in your particular area.
Another perk with Clever is buyers won't know you listed with a discount agent because your listing, yard sign, and other marketing materials will have your Partner Agent's local brokerage branding, not Clever's.
If selling your home faster and for the best price possible sounds like something you're interested in, fill out an online form for a free, no-obligation consultation.
Which discount real estate company is right for you?
Deciding which discount real estate is right for you entirely depends on your needs and expectations from your real estate agent. While some may be excited at the notion to sell their home entirely online, others may want to have a real person who can answer their questions, concerns, and is someone with years of experience who has an extensive professional network and knowledge base.
So while many of these discount companies showcase innovative technology, it doesn't change the fact that selling your home is complex and can be confusing, stressful, and overwhelming. You know yourself best and the amount of support and services you need will guide your decision.
Of course, depending on where you live, a few of these discount real estate companies may not even be an option. Whichever discount agent you choose, you'll want to feel confident that you're getting the services and support you need at the best price possible.
For instance, if you're looking for an entirely online experience to sell your home with limited agent involvement, Home Bay can be a good option. And if you'd rather skip hosting an open house Redefy may work for you.
But, if you want a full-service agent to help you navigate every step of the selling process, Clever can provide the best of both worlds — the same benefits of a traditional agent but at a lower cost. Get in touch with Clever for a free, no-obligation consultation about all your cost-saving options.