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What is a Low-Fee Realtor?

Low-fee realtors are on the rise and make it easy to save thousands on your home sale. While a low-fee realtor may not be right for those looking to avoid commissions all together, they are a great alternative for frugal home sellers.
What is a Low-Fee Realtor?

At a Glance: Low-fee realtors are on the rise and make it easy to save thousands on your home sale. While a low-fee realtor may not be right for those looking to avoid commissions all together, they are a great alternative for frugal home sellers.

Meta Description: A low-fee realtor might be the cost-effective option you've been searching for. Here's what you need to know about selling with a low-fee realtor.

Not many buyers are keen on paying the standard 6% in realtor commission fees because it means a huge hit to a seller's profit margin. A low-fee realtor is a real estate agent that allows home sellers to choose the services they want at a rate that is significantly lower than a traditional real estate agent.

But there's a reason sellers have relied on full-service agents for so long. Having all of an agent's skills and experience leads to a faster, smoother transaction and higher final prices.

Ideally, sellers shouldn't have to give up on the quality of service they receive in exchange for lower commissions. This is why Clever partners with top, local agents and pre-negotiates more affordable rates for sellers.

Learn how you can save up to 50% on commissions.

If you're still on the fence about whether a low-fee realtor is right for you, read on. We've got you covered with everything that you need to know about low-fee realtors and what they can do for you when selling your home.

What is a low-fee realtor?

A low-fee realtor is a real estate agent that charges clients less than the industry standard of 6% of a home's sale price. Low-fee realtors offer a range of services to homeowners that aid them when selling their homes. They help to get homes sold and save sellers money at the same time, therefore maximizing seller profits on a home sale.

What are typical realtor fees?

Typical realtor fees in the United States are about 6% of a home's sale price. The total commission is split between the buyer's agent and the listing agent. Typically, this rate is split down the middle with the buyer's agent receiving 3% and the seller's agent receiving 3%, however, there are cases in which a listing or buyer's agent gets a larger cut.

To understand these rates, it's important to note the history behind them. Realtor commission fees have been a standard of real estate transactions since the first real estate agents convened and formed the National Association of Realtors (NAR) in 1908.

In the same year, the association got to work creating a new corporation, called the Multiple Listing Service (MLS). The MLS gave licensed realtors access to a collection of listings across the nation to use for their clients. As only licensed realtors had access to the MLS, they were able to create an industry-standard 6% realtor commission on home sales.

The majority of local brokerages and NAR set the rates and discouraged members from lowering it. In 1950, a Supreme Court set a landmark decision that ruled setting commission rates amounted to illegal price-fixing.

However, although commission rates are now always negotiable, the 6% commission rate is still the default of most transactions.

Previously, home sellers and buyers didn't have online platforms like Zillow or Trulia to find homes that suited their needs, so they left it to the professionals and accepted their rates. The internet gave home sellers and buyers access to information that only licensed real estate professionals had access to and suddenly prices began to shift.

Low-fee realtors came out in response to online listing services and marketplaces. Agents had to compete and became more open to letting clients choose which services they would pay for.

How are low-fee realtors different from traditional realtors?

The primary difference between a low-fee and a traditional realtor is the number of services provided. Traditional realtors are full-service realtors, meaning that they take care of listing and closing and everything in between.

A traditional realtor will get your home on the MLS with high-quality images at a competitive price, schedule showings, negotiate on your behalf, and ensure that closing goes smoothly.

Low-fee realtors can offer full services, but typically they offer fewer services to buyers and sellers. They may charge more money for additional services.

Here are some common low-fee realtor models:

Flat-Fee MLS Listing

Sellers who use a flat-fee MLS listing service pay a set rate for listing services while handling the rest of the sale alone and without guidance. These agents typically do not offer any additional services beyond listing. Listings expire after a set amount of time regardless of whether your home has sold.

Discount Brokers/Limited-Service Agents

Discount brokers and limited-service agents offer a tiered pricing model in which buyers can select from a variety of packages and pay only for the services they need.

Listing services are typically the most basic: an agent will get your home listed on the MLS and maybe provide a For Sale yard sign. Additional services such as scheduling showings, marketing, and helping with closing are add-ons or part of more expensive packages.

Full-Service, Flat-Fee Agents

Full-service, flat-fee agents offer the exact same services as a traditional realtor at a bargain price. These agents may partner with client referral companies that provide leads to agents for an upfront cost or a fee once they have completed the sale.

Through these partnerships, full-service, flat-fee agents save time and money because they don't need to put as much effort into marketing their services. This leads to more clients, which offsets the lower commissions.

For example, Clever works with a network of top agents across the country that provide their full services to both buyers and sellers. The agents work for major names in the real estate industry — think RE/MAX, Century 21, Keller Williams, and more — and have years of experience in their market.

In exchange for a steady stream of business from Clever, these agents work for a flat fee of $3,000 or 1% commission rates on homes sold for over $350,000.

Are realtor fees negotiable?

Realtor fees are negotiable, but that doesn't mean it's easy to haggle with a real estate agent over their rates. Remember, as a seller working with a realtor, you are paying for their services. If you don't pay a competitive and fair price, top agents won't work with you.

In some cases, an agent may accept a lower commission rate depending on the market that you're in and the quality of the home that you are selling. If your home is in excellent condition, in a desirable neighborhood, and the market is hot, an agent may accept lower rates because it will take less time and effort to find a buyer.

How to Choose a Low Fee Realtor

With the rising number of low-fee realtors available to home sellers today, it can be difficult to choose the right realtor. That's why Clever makes it easy to interview local realtor and find the right fit for you.

We've already vetted full-service real estate agents who are the best in your area. They'll work for a set rate of $3,000 or 1% of your home's sale price if your home sells for $350,000 or more saving you up to 50% in commissions.

Start interviewing top, local agents now.

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Andrew Schmeerbauch
Andrew Schmeerbauch

Andrew Schmeerbauch is the Director of Marketing at Clever Real Estate, the free online service that connects you top agents to save on commission. His focus is educating home buyers and sellers on navigating the complex world of real estate with confidence and ease. Andrew has worked on projects for the United Nations and USC and has a particular passion for investing and finance. Andrew's writing has been featured in Mashvisor, L&T, Ideal REI, and Rentometer.

See all Andrew's Posts
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