How to Save on Realtor Commission Fees (Without Sacrificing Service)

By 

Jamie Ayers

Updated 

March 10th, 2021

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How to save | How the savings work | How much can you save? | Negotiate yourself | Agent-matching services | Discount real estate brokers | Sell without a realtor

Selling a house isn’t cheap, and realtor fees are typically the largest associated cost.

The average total commission rate home sellers pay nationwide is approximately 5.45%. For a $346,800 home — the current median U.S. home sale price[1] — that translates to roughly $18,900!

The good news is there are many ways to save on realtor fees. But not all are created equal!

While some options offer legit savings, others bring serious risks and drawbacks that arguably outweigh the potential benefits.

This guide will walk you through your options and help you make the best choice for your specific needs and goals.

» LEARN: Save thousands on realtor fees without sacrificing service

How to save on realtor commission fees

If you’re looking to save on realtor fees, you have a number of different options:

1. Try to negotiate realtor fees yourself

You may be able to negotiate a lower rate with your listing agent yourself. But this route can be difficult — especially if you’re not an experienced negotiator — and it’s unlikely the agent will be willing to drop their rate by a significant margin.

» MORE: Should you try to negotiate with your listing agent?

2. Work with a company that negotiates lower fees for you

Some companies will connect you with local real estate agents and negotiate lower rates on your behalf. Because they send the agents a steady stream of new business, they have more leverage to get you savings without sacrificing service.

» MORE: Should you work with an agent-matching service?

3. Sell with a discount real estate broker that offers built-in savings

Discount real estate brokerages offer reduced listing fees for home sellers, no negotiations required. But there’s usually a catch. For example, many discount brokers handle more customers per agent to make up for their lower rates, which limits the agents’ ability to provide hands-on, dedicated service and support.

» MORE: Should you sell with a discount real estate broker?

4. Hire a limited-service agent or flat-fee MLS company

Some agents and brokers will offer a limited set of services for a low flat fee. Others may offer a la carte pricing, where you can pick and pay for only the services you want. Particularly if you’re looking to list your home for sale by owner (FSBO), these types of services offer a few of the key benefits of working with a realtor without the hefty price tag.

» MORE: Should you hire a flat-fee MLS company?

How saving on realtor fees works

Selling a house is expensive, and realtor fees are typically your biggest individual cost. Even a minor fee reduction could save you thousands of dollars.

In a conventional home sale, the commission — we’ll use 6% for simplicity’s sake — comes out of the seller’s proceeds and is split between the two agents who handle the sale:

  • The listing fee (3%) goes to the listing agent for helping the seller market the home
  • The buyer’s agent fee (3%) goes to the buyer’s agent for bringing their client to purchase the home

When you save on realtor fees, the rate reduction is usually coming from the listing agent or broker’s fee. So if you saved 2% on commission for a 4% total fee, the overall breakdown might look something like this:

Fee
Rate
Listing fee
1%
Buyer’s agent fee
3%
Total
4%

Why does the buyer’s agent fee stay the same?

Reducing the buyer’s agent fee will make it more difficult to sell your home fast and for the best price, plain and simple.

The buyer’s agent commission incentivizes buyer’s agents to show your home to their clients. If you drop your rate below what other sellers in your area are offering, agents will likely prioritize those homes over yours.

Roughly 90% of buyers work with agents.[2] By offering a competitive buyer’s agent commission rate, you’re maximizing your prospective buyer pool and giving yourself the best chance of attracting qualified offers quickly (and ideally igniting a bidding war).

Why are listing agents and brokers willing to work for less?

Listing agents and brokers may drop their rates in order to remain competitive and attract new business.

Several factors are reshaping consumer expectations on what’s reasonable for an agent to charge for helping sell a home:

  • Increased competition among agents for new clients is driving commission rates down (albeit very slowly) across the country[3]
  • Discount services, like Redfin and Clever, with built-in savings are gaining popularity
  • The internet is making the home selling and buying process more efficient and consumer-driven — i.e., agents are doing less work for their clients than they used to

As a result, many agents and brokers are having to be more flexible in terms of their pricing, service offerings, and overall approach to sign new seller clients.

Many have found that by lowering their rates, they can attract more new clients and close more deals, which ultimately makes up for the price reductions.

» MORE: What company charges the lowest real estate commission?

How much can you reasonably expect to save on realtor fees?

Generally speaking, don’t expect to knock more than about 2-3% off your total commission fee without significant service-level tradeoffs.

But ultimately, how much you actually save will depend on how you go about getting those savings.

For example, if you try to negotiate fees with a realtor yourself, don’t expect them to come down too much from their typical rate — 0.5-1% is likely a best-case scenario.

On the other hand, some discount brokers and agent-matching services offer huge savings opportunities, with built-in savings 50-70% below the typical rate most listing agents charge.

It’s worth pointing out that, given the high-cost nature of a home sale, any price reduction is going to yield significant dollar savings.

For example, if you were selling a $500,000 home and worked with an agent offering a 1% listing fee, you’d save approximately $10,000 — even when offering the full, competitive buyer’s agent fee.

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

Should you try to negotiate realtor commission fees yourself?

You should absolutely try to negotiate lower fees with your realtor — but make sure you’re going in with realistic expectations.

✍️ Editor’s note 
As an individual seller, your negotiating power is pretty limited. The best agents are in high demand and know what their time is worth. A top realtor may be willing to drop their fee slightly under certain circumstances, but your chances of procuring a major price reduction are likely slim.

Some brokerages have rigid fee structures. In these cases, the agent couldn’t lower their commission rate even if they wanted to.

Assuming the realtor does have control over their fee structure, you might be able to negotiate a lower commission rate if:

  • You’re selling a high-value home
  • Homes in your area are selling fast
  • You already have a buyer lined up
  • It’s the offseason and agents are hungry for new listings
  • The agent is newer and looking to build their reputation

» LEARN: How to negotiate realtor commission

Should you use a referral or agent-matching service?

✅ Benefits

  • Agent-matching services are typically 100% free
  • Some negotiate low commission rates that can save you thousands on realtor fees
  • Plug you into pre-vetted agent networks and let you interview multiple options with zero obligation
❌ Risks

  • Some services only work with a few agents in a given market
  • Services without built-in savings don’t offer much value

Referral or agent-matching services connect individual sellers with local agents. In some cases, these services may pre-negotiate lower commission rates; in other cases, they simply act as a middleman to enable an initial meeting.

But why would a traditional agent offer a full-service experience for a fraction of their typical rate?

Agent-matching services generate a steady flow of new business for their partner agents at zero upfront cost.

In other words, the agents spend less time and money up front to acquire new customers. This allows them to charge less and still earn a solid profit on each sale.

Is an agent-matching service right for you?

👍 Good for sellers who: 

  • Want to work with top agents from major brands and regional brokerages
  • Want savings without the same service-quality risks that come with a discount brokerage
  • Want the traditional one-to-one customer service experience

👎 Bad for sellers who: 

  • Want to completely avoid listing on the open market
  • Already picked out their agent

Try Clever's free agent-matching service!

List with a top local agent for 1% — no negotiations required.

Should you hire a discount real estate broker?

✅ Benefits

  • Significant potential commission savings, particularly for pricier homes
  • Many offer a tech-centric service approach
  • May create legit value — just be clear on what you’re giving up for those savings
❌ Risks

  • You will likely get less hands-on service and support throughout your sale
  • A team-based approach isn’t for everyone and may lead to mistakes
  • Overextended agents may pay less attention to your sale, which could affect your outcome

Discount real estate brokers offer big potential savings — but the risks can be significant as well.

Many of these companies claim they offer full service, but in reality, relative to a traditional realtor, the scope or quality of these services may be reduced substantially.

Is a discount broker right for you?

👍 Good for sellers who: 

  • Don’t need a ton of communication from their agent
  • Don’t mind a team-based or remote service approach
  • Don't need an agent’s help with every phase of the sale

👎 Bad for sellers who: 

  • Have complicated selling situations
  • Want an agent who communicates promptly and frequently
  • Put a high value on the one-on-one agent/client relationship

» MORE: What to know about discount real estate brokers

Should you sell without a realtor?

✅ Benefits

  • You pay no listing commission at all, which can yield huge savings
  • You have complete control over pricing, showings, closing, etc.
  • You can take as much time as you want to find the right offer
❌ Risks

  • FSBO homes typically sell for less than agent-listed ones
  • Homes listed FSBO may take much longer to sell
  • Negotiation or contract mistakes could lead to a subpar outcome or legal ramifications

The most obvious way to save on commission is to sell without an agent and avoid the realtor fees entirely.

Is this possible? Absolutely. But getting a home sale across the finish line without the guidance and support of an experienced professional is easier said than done.

Let’s look at a couple of the most popular ways of selling a home without an agent, and go over the pros and cons.

Selling 100% for sale by owner (FSBO)

This is exactly what it sounds like— you’re selling your home by yourself, with no help from an agent whatsoever.

Note that many FSBO sellers use a flat-fee MLS listing service to get their home some visibility. For a one-time flat fee (average is around $299), these services list your property on the local MLS, where it can be seen by buyer’s agents.

Is a FSBO sale right for you?

👍 Good for sellers who: 

  • Place a high value on independence
  • Have some experience in the real estate industry 
  • Have a hot property in a booming market (i.e., the property will sell itself)
  • Who are willing and able to endure an extended sale timeline

👎 Bad for sellers who:

  • Are inexperienced home sellers and need a lot of step-by-step guidance
  • Have a unique property in a slower market
  • Need to sell on a tight timeline
  • Have full-time jobs and obligations that make it tricky to manage a time-consuming home sale

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

Selling to an iBuyer

✅ Benefits

  • Pre-qualifying homes can get an initial cash offer within one or two business days
  • Avoid costly pre-listing repairs* and the stress of selling on the open market
  • The seller can choose closing and move-out dates
❌ Risks

  • iBuyers only buy very specific types of homes in a handful of major U.S. cities
  • Built-in service fees can be significant, ranging from 5-15%
  • Not much room to negotiate on the final offer price or sale terms
*iBuyers typically adjust the offer price following an in-person inspection to account for necessary repairs

iBuyers are companies that use advanced technology and data analytics to make fast, all-cash offers on homes, often sight unseen.

Is an iBuyer right for you?

👍 Good for sellers who: 

  • Value convenience over getting the best possible price
  • Need to sell before they buy their next home
  • Have qualifying homes and need to sell as quickly as possible

👎 Bad for sellers who: 

  • Want to get the best possible price for their home
  • Need to sell older or unconventional homes
  • Plan to sell in markets where iBuyers don’t operate

» MORE: The ultimate guide to iBuyers

Selling to a We Buy Houses for Cash company

✅ Benefits

  • Will buy properties that are in disrepair — or even abandoned
  • Fast, all-cash offers and speedy, flexible closing timelines
  • Usually allow you to avoid paying realtor fees entirely
❌ Risks

  • You’ll likely take a big hit on price — possibly 40-50% below your home’s fair market value
  • While many of these companies are 100% legit, be wary of scams
  • Companies can be incessant with calls and texts after you give them your information

“We Buy Houses for Cash” companies are property investors who will typically buy any home in any condition or location for — you guessed it — cash.

Is a cash sale right for you?

👍 Good for sellers who: 

  • Need to sell quickly and are less concerned about price
  • Have distressed or difficult-to-sell properties
  • Are unwilling or unable to make necessary repairs and improvements before listing their homes
  • Don’t want to deal with the hassle of selling on the open market

👎 Bad for sellers who: 

  • Want to get top dollar for their homes
  • Have desirable homes in high-demand markets
  • Plan to sell homes in relatively good condition
  • Aren’t under external pressures to sell fast

» MORE: The truth about companies that buy houses for cash

Sell your house and save on commission

As we’ve shown, it’s very possible to save on realtor fees. The catch? You may find yourself trading a lower rate for a subpar experience or outcome.

That being said, when you look at all the possible ways to cut down on commission, it’s clear that agent-matching services offer the best value.

Sellers who use an agent-matching service get a traditional full-service agent for a fraction of their typical rate.

Of course, there’s no one-size-fits-all solution for your home sale. Everyone’s situation is unique, and each seller needs different things from their agent.

The best approach is to think about what you really do and don’t want out of your home selling experience, then consult a professional to help you get there.

Next Steps: Talk to an expert!

If you're looking to buy or sell a house and weighing your options, Clever can help!

Our fully licensed Concierge Team is standing by to answer questions and provide free, objective advice on how to get the best outcome with your sale or purchase.

Ready to get started?

Give us a call at 1-833-2-CLEVER or enter your basic info below. Our Concierge Team will be in touch shortly to help.

Remember, this service is 100% free and there’s never any obligation.

ARTICLE SOURCES
[1]

St. Louis Federal Reserve Bank. "Median Sale Price of Houses Sold for the United States." Updated Q4 2020.

[2]

National Association of REALTORS. "Quick Real Estate Statistics." 

[3]

United States Department of Justice. "Competition in the Real Estate Brokerage Industry."