Will You Save Money With Low Commission Real Estate Companies?
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Richard Haddad Executive EditorClose
Richard Haddad Executive EditorRichard Haddad is the executive editor of HomeLight.com. He works with an experienced content team that oversees the company’s blog featuring in-depth articles about the home buying and selling process, homeownership news, home care and design tips, and related real estate trends. Previously, he served as an editor and content producer for World Company, Gannett, and Western News & Info, where he also served as news director and director of internet operations.
When selling your home, you want to maximize your profit. For some homeowners, traditional real estate agent commissions can feel steep. That’s why low-commission real estate companies are growing in popularity, offering services at reduced rates.
But will you actually save money with a discount service, or are there hidden trade-offs?
Whether you’re exploring ways to cut costs or simply curious about your options, this guide will help you make a more informed decision.
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What are low-commission real estate companies?
Low-commission real estate companies help homeowners sell their property while charging reduced commission fees. Unlike traditional listing agents, who typically charge about 3% of the home’s sale price, these companies offer savings by lowering commission rates, often between 1% and 3%.
Based on their model, these companies may provide full-service representation, streamlined services, or limited support. Some match you with local agents who agree to discounted rates, while others operate with in-house teams to reduce costs.
How do low-commission real estate companies work?
Low-commission companies typically function in one of two ways:
1. Referral networks: Some low-commission companies connect you with traditional agents who agree to discounted rates. You work with a local agent, but the commission fee is pre-negotiated and lower than the standard.
2. Flat-fee or salaried models: There are also real estate companies that employ salaried agents or charge a flat fee for services. These models reduce overhead and allow them to pass savings on to you.
Services offered can range from listing your home on the multiple listing service (MLS) to providing full-service support, such as marketing, negotiations, and closing assistance. However, the level of service can vary. Before you sign an agreement with a low-commission real estate company, be certain you fully understand what’s included.
Your buyer might ask you to pay their Realtor: While you are responsible for your listing agent commission, your buyer may ask you to pay their Realtor fees. A recent court settlement has changed traditional commission responsibilities, but many buyers are still negotiating to have sellers cover buyer agent fees. If you agree, your combined commission costs may be as high as 6%.
Let’s look at some examples of how low-commission real estate fees might play out:
Agent commission examples by home price
| Home price | 6% fee (combined) | 3% listing agent fee | 2% listing agent fee | 1.5% listing agent fee |
| $200,000 | $12,000 | $6,000 | $4,000 | $3,000 |
| $300,000 | $18,000 | $9,000 | $6,000 | $4,500 |
| $400,000 | $24,000 | $12,000 | $8,000 | $6,000 |
| $500,000 | $30,000 | $15,000 | $10,000 | $7,500 |
| $600,000 | $36,000 | $18,000 | $12,000 | $9,000 |
| $700,000 | $42,000 | $21,000 | $14,000 | $10,500 |
| $800,000 | $48,000 | $24,000 | $16,000 | $12,000 |
| $900,000 | $54,000 | $27,000 | $18,000 | $13,500 |
| $1,000,000 | $60,000 | $30,000 | $20,000 | $15,000 |
| $1,500,000 | $90,000 | $45,000 | $30,000 | $22,500 |
| $2,000,000 | $120,000 | $60,000 | $40,000 | $30,000 |
Popular low-commission real estate companies
Here’s a look at some of the leading low-commission real estate companies, listed alphabetically, and examples of what they offer:
Clever Real Estate
Clever connects you with local agents who agree to charge a reduced 1.5% listing fee ($3,000 minimum). The buyer’s agent fee may still apply depending on your arrangement with the buyer, which can range from 2.5% to 3%. Clever notes, “We bring you the best, full-service agents from major brands and brokerages nationwide.”
Clever is accredited by the Better Business Bureau, holds an A+ rating, and enjoys a customer review score of 4.93 out of 5 stars. Google customers give the company a 4.9 average rating out of 5 stars.
Houwzer
Houwzer employs salaried agents and offers a 1% commission model. However, its low-commission listing agent services are only available in Delaware, Florida, Maryland, New Jersey, Pennsylvania, Virginia, and Washington DC. Minimums may apply for lower-priced homes.
Houwzer does not appear to hold a BBB accreditation but has a Google customer review rating of 4.8 out of 5 stars. In 2022, Houwzer acquired Trelora, a competitor that also offers discount commission plans. Trelora also has a 5-star Google review rating but does not hold a BBB accreditation.
Ideal Agent
Ideal Agent advertises that you can sell your home for “as low as a 2% commission.” The company pairs you with top local agents from large brokerages across the country. As with other low-commission real estate companies, the discounts refer only to the listing agent fees. Homes priced under $150,000 have a minimum seller commission fee of $3,000.
Ideal Agent is not accredited by the Better Business Bureau but holds an A+ BBB rating. and enjoys a customer review score of 4.93 out of 5 stars. The company’s Google customer review page is currently not visible to the public or has been deactivated.
Prevu
Prevu employs salaried agents who provide full-service support for a 1.5% listing fee. Prevu also provides homebuyer services that include a commission rebate (cash-back) program. However, its services are only available in select markets.
Prevu does not have a Better Business Bureau page but has an impressive 5-star Google customer review rating.
Redfin
Redfin charges a 1.5% listing fee, or as low as 1% if you also buy a home with them. Their salaried agents provide end-to-end service in over 100 markets in the U.S. and Canada, supported by a user-friendly online platform. Redfin also provides a 3D tour so buyers can tour the house from anywhere.
Reviews for Redfin are mixed. It holds an unaccredited 1.14-star rating from the Better Business Bureau accompanied by an F grade, but its Phoenix, Arizona office has an acceptable Google customer review rating of 4.1 out of 5 stars.
SimpleShowing
SimpleShowing also offers a 1% listing agent commission model. The company emphasizes affordability and straightforward service for sellers. As with most other discount services, you may still need to pay the buyer’s agent commission if it’s included in your negotiations. If you also buy through SimpleShowing, it offers $5,000 or more that you can apply to closing costs.
SimpleShowing has a 4.9 rating on Google. It is not BBB-accredited but has an A+ rating. The company currently serves only six markets: Atlanta, Tampa, Orlando, Miami, Fort Lauderdale, and Dallas.
Your buyer might ask you to pay their Realtor: As noted in some of the company profiles above, while you’re responsible for your listing agent fees, your buyer may ask you to pay their Realtor commission. A recent court settlement has changed traditional commission responsibilities, but many buyers are still negotiating to have sellers cover buyer agent fees.
Will you save money with low-commission real estate companies?
Low-commission real estate companies can help you save on the costs of selling your home, but your actual savings will depend on the agent’s experience and the quality of the service you receive. For example, the company may offer you a listing package that appears to save you 1%-2% compared to a full-commission agent, but if your discount agent gives you discount service, you could end up paying more in lost proceeds or costly mistakes.
You’ll want an agent with a proven high sale-to-list ratio. A real estate agent’s sale-to-list ratio can indicate how well they price homes and negotiate. It’s calculated by comparing a property’s final sale price to its original list price. A higher sale-to-list ratio means the agent is more likely to price homes accurately and get you top dollar.
Examples of sale-to-list ratios
The two scenarios below illustrate different outcomes in an agent’s sale-to-list ratio, providing a better understanding of how this agent metric works.
Example when a home sells for less than your asking price:
- Listing price of home: $420,000
- Final sale price: $405,000 ($15,000 below asking price)
- Calculate the ratio: $405,000 divided by $420,000 = 0.9643
- Find the percentage: 0.9643 x 100 = 96.43%
This home sold for 96.43% of the seller’s original list price. This means the buyer or the buyer’s agent was able to leverage the selling price down in negotiations.
Example when a home sells for more than your asking price:
- Listing price of home: $420,000
- Final sale price: $435,000 ($15,000 above asking price)
- Calculate the ratio: $435,000 divided by $420,000 = 1.0357
- Find the percentage: 1.0357 x 100 = 103.57%
This home sold for 103.57% of the seller’s original list price. This means the seller or the seller’s agent was able to increase the selling price, perhaps due to having multiple offers or by creating a bidding war on the property.
When interviewing a real estate agent, ask about their sale-to-list ratio and average days on market (DOM) for their listings. You can also ask how they come up with their list price recommendations. Carefully review each company’s offerings and weigh the potential cost savings against the level of service provided.
How Much Is Your Home Worth Now?
Home values have rapidly increased in recent years. How much is your current home worth now? Get a ballpark estimate from HomeLight’s free Home Value Estimator.
Pros and cons of low-commission real estate companies
Pros
- Lower costs: Reduced listing fees can save you thousands compared to traditional commission rates, depending on the agent’s skill and experience.
- Flexible options: Choose between full-service, limited-service, or flat-fee models depending on your needs.
- Streamlined processes: Many companies use technology to simplify tasks like scheduling showings and tracking offers.
Cons
- Less service: Depending on the company and the agent they assign, you may not receive the same level of service as a traditional agent.
- Less time: Agents who work for low-commission companies may have less time to dedicate to your home sale — or they may feel less motivated.
- Less marketing: Low-commission agents may have smaller budgets to invest in marketing, which can mean fewer promotions and a smaller buyer pool.
- Sale shortcuts: Low-commission agents may be pressured to facilitate a faster sale, which can mean less guidance and assistance.
- More listings to juggle: Low-commission agents may take on a higher volume of listings, which can mean less availability to communicate with each seller.
- Ala carte services: Low-commission agents may offer skinny listings or ala carte services, which may mean they don’t help at a high level with managing showings, negotiating an offer, or working through other issues.
- Market limitations: Not all low-commission companies operate nationwide, which can limit your options.
Alternatives to low-commission real estate companies
If you’re not sure low-commission companies are the right fit, consider these alternatives:
1. Negotiate with a traditional agent: Many agents are willing to reduce their commission, especially for higher-priced homes or dual transactions (buying and selling).
2. Sell your home yourself (FSBO): Selling your home without an agent eliminates the listing fee entirely, though it requires more effort and expertise.
3. Flat-fee MLS services: These services list your home on the MLS for a one-time fee, giving you access to buyers while managing the process yourself.
4. Sell to a cash buyer: Housebuying companies might be a solution if you need a fast, convenient sale. However, you will likely receive a lower offer than what you would get on the open market using a skilled agent.
Thinking of selling by owner? A small number of homeowners (about 6%) decide to take the “for sale by owner” (FSBO) route, which can eliminate the typical 3% listing agent fee. However, according to the National Association of Realtors (NAR), FSBO homes sold for a median price of $380,000 last year, far less than the median selling price of all other homes, which was $435,000 ($55,000 less in proceeds).
FAQs on low-commission real estate companies
If saving on commission fees is a priority and you’re comfortable with potential service trade-offs, a low-commission company may be a good option. However, carefully research the level of support provided and sale-to-list ratios to ensure it meets your needs.
Historically, the seller paid commission fees for both the listing agent and the buyer’s agent. This changed after a landmark lawsuit settlement by the National Association of Realtors (NAR). The changes “decoupled” seller and buyer agent compensations. Buyers are now responsible for negotiating commission costs with their own agents. However, some sellers are still agreeing to pay the buyer’s Realtor fees to entice a sale.
Commission averages have changed. Traditionally, the average seller-paid real estate agent commission rate has hovered around 5%–6% of the home’s sale price. This included both the listing agent and the buyer’s agent fees, typically about 2.5%–3% each. However, this model has been broken up following the new real estate commission rules that rolled out in late 2024. Buyers are now responsible for their own agent fees. There is not enough data to definitively calculate a new nationwide average, but anecdotally, today’s home sellers are paying around 3%.
Yes, many agents are open to negotiating their commission, particularly for higher-priced homes or when representing both the buyer and seller.
The lowest commission varies but is often around 1%. However, some flat-fee or discount services may charge even less by offering a flat fee.
Earn higher home sale proceeds with a top agent
While low-commission companies can save you money, working with a top-performing agent often leads to a higher sale price and smoother experience. HomeLight data shows that the top 5% of agents sell homes for up to 10% more than average agents. Top-rated agents also sell homes nearly two times faster than average agents.
HomeLight’s free Agent Match platform connects you with experienced, top-performing agents in your city who have a proven track record of maximizing home sale proceeds. We analyze over 27 million transactions and thousands of reviews to determine which listing agent is best for you based on your needs.
Take the next step toward a successful sale by finding the right agent for your goals. Start your search with HomeLight today.
If you’re buying and selling at the same time, check out HomeLight’s Buy Before You Sell program. This innovative program provides a streamlined, simplified, and more certain process to make your best move. Watch this short video to learn more.
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