Whether you’re selling a luxury condo in Miami or a single-family home in Portland, you will spend a whopping 6% in commissions. The majority of sales include two agents – a listing agent and a buyer’s agent.
As the name suggests, 5% commission Realtors are discount brokers who work at a 5 percent commission. They offer all the services similar to a full-service agent at discounted rates.
⚡ Key Takeaways
- What Does a 5% Commission Discount Mean? A 5% commission is when your agent provides all real estate services like a traditional broker for a low commission of 5%.
- Understanding the Discount: The discount is on the listing fee. You still have to pay the buyer agent commission.
- How to choose a 5% Commission Realtor? While choosing a 5% commission Realtor you must consider their pricing, the technology they use and the quality of services they provide.
- Alternatives: You can list on the MLS using Flat Fee MLS companies like Houzeo. It is 100% online and automated to cater to various seller needs.
Rankings: Best 5% (or less) Commission Companies
We have compiled a list of Realtors who charge 5% (or less) for your next real estate transaction.
| Company Name | Listing Fee | Max Savings | 100% Online | 5-Star Reviews |
|---|---|---|---|---|
| Houzeo | $349 Flat Fee | ✅ | ✅ | ✅ |
| Redfin | 1.5% Commission | ❌ | ❌ | ❌ |
| SimpleShowing | 1% Commission | ❌ | ❌ | ❌ |
| Prevu | 1.5% Commission | ❌ | ❌ | ✅ |
| Ideal Agent | 2% Commission | ❌ | ❌ | ❌ |
Reviews: Best 5% (or less) Commission Companies
1. Houzeo
#1 Flat Fee MLS Service
Houzeo.com
- Listing Fee: $399
- Available nationwide
4.9/5
(10,020+ reviews)
4.9/5
(10,020+ reviews)Houzeo is a high-tech platform with easy listing, fast changes, and online showings and offers.
You can choose from 4 Flat Fee MLS packages:
- Bronze Package – $399+$350 at Close: This package offers a Houzeo listing only for 6 months with 24 photos.
- Silver Package – $399+0.5% at Close: This offers maximum photo upload and provides you with seller disclosures.
- Gold Package—$429+0.5 % at Close: This is Houzeo’s signature MLS package and includes all the technology Houzeo is known for, such as Houzeo Showings, Houzeo Offers, and DigiTransact.
- Platinum Package – $449+1% at Close: It includes the assistance of a licensed broker to help you with negotiations, seller disclosures, and closing.
👉 Our Take: We recommend the GOLD plan. You’ll have access to Houzeo tech, making managing showings and offer negotiations easy! Before you list, confirm all prices on your particular state’s pricing page.
» Houzeo Reviews: Find out why 10,000+ Americans love Houzeo.
Houzeo is America’s #1 Flat Fee MLS service because of 5 reasons:
- Max Exposure: Houzeo’s listing packages get your home on Zillow, Trulia, Realtor.com, Redfin, and 100s of other real estate websites.
- 5-star Customer Service: Houzeo has a fully staffed customer service desk available 6 days a week. Chats and emails are open 7 days a week.
- 100% Online: Houzeo is a high-tech platform with easy listing, fast changes, online showings, and online offers. Its powerful house search app makes your home visible to potential buyers on the go.
- No Hidden Fees: All fees are disclosed upfront, so there are no Houzeo hidden fees. You get to bypass the traditional listing agent commission.
- Free Home Value Estimator: Now, you can get a free home value estimate within 30 seconds. It helps you set a listing price.
There are no dealbreakers with Houzeo.
» Is Houzeo Legit? Houzeo addresses all Houzeo complaints from home sellers.
Houzeo is rated 4.9 out of 5 stars by thousands of home sellers on Google & Trustpilot.
» Houzeo Reviews: Houzeo is rated “Excellent“ by 10,020+ home sellers.
Houzeo.com is a top-ranked Flat Fee MLS service. Houzeo provides an unbeatable combination of max savings, 5-star customer support, and cutting-edge technology.
Although it isn’t a 5% commission company, you can still save thousands by listing with Houzeo! Listing with Houzeo gets you a personalized dashboard, a 100% online platform, and timely customer service—at a flat rate.
2. Redfin
BEST TECH-ENABLED BROKERAGE
Redfin.com
- Listing Fee: 1% of Sale Price
- Available in 80+ U.S. Markets
- 4.2/5
(60+ reviews)
4.2/5
(60+ reviews)Redfin does not disclose its pricing on its website. Sellers will have to pay common closing costs.
- It offers 0.5% buyer’s rebate. To avail this, you’ll have to buy and sell with them.
👉 Our Take: Redfin offers 1 rebate option but with a strict clause. While, other real estate companies are willing to offer a higher rebate.
» Redfin Reviews: The reality of the buyer’s rebate.
Here are some advantages of choosing Redfin:
- Advanced Technology: With 3D walkthroughs and 40+ filters to narrow down your search, the Redfin app makes it easy to find the right home from anywhere.
- Paired With Local Agents: Local agents know their market better. This can help you secure a good deal.
- Home Tour: You can see updated listings every 5 minutes on their website. You can also schedule a home tour for the same day.
- Nationwide Coverage: Redfin covers 80+ markets in the US.
Here are some limitations we found with Redfin.
- Strict Rebate Criteria: Clients who sell and buy with Redfin within one year get a rebate of 0.5%.
- No Freedom in Agent Selection: You get an agent assigned automatically without having a choice in the matter.
- Agents Are Less Incentivized: Unlike traditional agents who work for commission, Redfin agents get a fixed salary. This can demotivate them from offering you additional services.
- Poor Customer Reviews: Customers have complained that agents are often unreachable and unprofessional.
Redfin has an average rating of 4.3 out of 5 stars from 60+ reviews on Google.
» Redfin Reviews: The Reality of the 1% Fees, Pros, Cons, and Alternatives!
Redfin is one of the most popular discount brokers in the US, primarily known for its mobile app. The company gives you advanced tech support and full-service agents for a 1.5% commission.
It takes 18 days to list your property on the MLS via Redfin. On the other hand, Houzeo lists your property within 1-2 business days, saving valuable time.
Before you choose Redfin, make sure to check out its reviews online. Most of the reviews complain about the agent’s inconsistent services.
3. SimpleShowing
1% COMMISSION
Simple Showing
- Commission: 1% of Sale Price
- Restricted coverage
- 4.9/5
(110+ Reviews)
4.9/5
(110+ Reviews)SimpleShowing is a licensed full-service brokerage in Florida, Georgia, and Texas. They offer the following packages:
For Homesellers:
- 1% Listing Fee: This package includes full-service support, with licensed agents handling all aspects of the sale. They also provide marketing, home showings, and negotiations to finalize the sale.
For Homebuyers:
- $5,000+ Towards Closing Costs: This package includes full-service support. Licensed agents will handle all aspects of the sale, including marketing, home showings, and negotiations to finalize the sale.
👉 Our Take: SimpleShowing is a good option if you are selling a high-end home. However, its $5,000 minimum listing commission makes it more expensive for lower-priced homes than other brokers.
Here’s what stands out about SimpleShowing:
- Market Exposure: Homes are listed on the MLS and various national websites, including Realtor.com, Zillow, Trulia, etc.
- No Upfront Costs: The listing fee is only paid at closing, deducted from the sale profit.
- Professional Guidance: Offers pre-listing consultation, ongoing support, and contract assistance throughout the selling process.
- In-House Photography: They have an in-house professional photographer to get the best photos and videos of the home for the MLS.
SimpleShowing has the following downsides:
- Minimum fees: Homes under $500,000 don’t benefit from the 1% listing fee because of a minimum commission fee requirement of $5,000.
- Limited Agents: They are a small team so you do not get to choose or change the agent in case of disputes.
- Limited Coverage: They have agents only in 8 cities: Miami, Dallas, Atlanta, Orlando, Tampa, Savannah, Fort Lauderdale, and Fort Worth.
SimpleShowing has 4.9 out of 5 stars on Google from over 110 reviews.
SimpleShowing’s brokerage services provide a top-notch customer experience. You can rely on their local agents for your real estate transactions.
They also charge $3,500 as their minimum fee. Only buyers who hire agents through SimpleShowing are eligible for a refund. The buyer’s rebate also requires the lender’s clearance.
4. Prevu
HIGHLY QUALIFIED AGENTS
Prevu
- Listing Fee: 1.5% of sale price
- 5.0/5.0
(601 reviews)
Prevu is a full-service low commission brokerage based in New York that aims to change the old-school ways of the real estate market.
- Listing Agent Commission- 1.5%: Prevu charges a lower commission of 1.5%. It offers a full-service package at a low commission rate.
👉 Our Take: Prevu’s listing price is lower than traditional realtor commission, but it is still higher than other low-commission real estate companies.
» Prevu Reviews: Read our review of Prevu Real Estate & decide if it’s a good choice for you.
Prevu is a decent option when you are buying or selling a property.
- Qualified Agents: Prevu’s qualified agents provide real estate services at low commissions.
- Buyer’s Rebate: Buyers get a commission rebate of 2% of the purchase price.
- Serve a High Volume: Prevu relies on its team to serve a high volume of clients to offer discounts.
You should know about a few red flags that Prevu has. This can make your experience less satisfactory.
- Additional Charges: Buyer’s agent commission is not included in Prevu’s listing fees. This commission is up to 2.5%-3 % of the sale price.
- Limited Agents: Prevu’s team is small and its agents deal with higher volume. So you have limited options when it comes to selecting an agent.
- Lack of Personalized Experience: Since Prevu’s team handle a higher volume, the agents won’t be able to provide personalized services.
- Limited Coverage: Prevu Real Estate serves 6 states only- New York, Massachusetts, Connecticut, California, Pennsylvania, and Washington.
Prevu has 5.0 out of 5 Stars from 455 reviews on Google.
» Prevu Reviews: Read our review of Prevu Real Estate & decide if it’s a good choice for you.
Prevu provides seller’s real estate services at a low commission rate. It also offers one of the most significant commission rebates for buyers.
Prevu has a small team of agents who deal with a higher volume of clients. This limits the options of selecting an agent you prefer.
5. Ideal Agent
Agent Matching Service
Ideal Agent
- Listing Fee: 2% of Sale Price
- Nationwide coverage
- 5/5
(6,350+ Reviews)
Ideal Agent is an agent matching company. It offers a single listing package for sellers:
- 2% Commission: Ideal Agent charges a 2% commission to the listing agent, which is lower than traditional rates (typically 2.5 – 3%). On an average home price of $400,000, you will be charged $8,000.
👉 Our Take: The 2% listing fee is competitive, however, the buyer’s agent still gets a 2.5 – 3% commission, bringing the total commission to around 4.5 – 5%. The savings are notable but not as significant as flat-fee brokers.
Ideal Agent stands out with several attractive offerings:
- Top Agents: The platform only works with experienced agents from major brokerages like Keller Williams Realty and RE/MAX.
- National Network: Coverage extends across the U.S., making it a versatile option for sellers nationwide.
It’s important to be aware of these potential drawbacks:
- Limited Savings: Despite the reduced listing commission, the total commission cost isn’t drastically different from standard agents.
- Agent Pool: In less populated areas there may be fewer agents to choose from, limiting flexibility.
Ideal Agent has a rating of 5 out of 5 on Trustpilot.
» Ideal Agent Reviews: Does Ideal Agent benefit you in the 2024 market?
Ideal Agent is an agent matching service that connects sellers and buyers to expert agents. They claim to offer the best agents from the top 1% of sales contributors in the local markets.
Before you choose Ideal Agent, check out its reviews online. Customers often complain about paying more than advertised and inconsistent agent services.
How Does a 5% Real Estate Commission Work?
Companies that provide a 5% real estate commission offer listing fee reductions.
In a traditional real estate transaction, you will generally pay up to 6% real estate agent commission. This commission is shared in half between your listing agent and the buyer’s agent.
Remember, the discount is on the listing fee. Therefore, instead of 6%, your listing agent will list your home for a pre-negotiated fee of 5%. The reduced fee can easily save you thousands in commissions.
How Much Can You Save With a 5% Commission Realtor?
Although it may seem like a small fraction, 5% commissions can help you save thousands! Your total savings depend on the listing price of the house. Higher sale price = greater savings.
Here is the table showing how much you will save working with a 5% real estate company:
| Selling Price | 5% Realtor Commission | 6% Realtor Commission | Total Savings |
|---|---|---|---|
| $250,000 | $12,500 | $15,000 | $2,500 |
| $500,000 | $25,000 | $30,000 | $5,000 |
| $750,000 | $37,500 | $45,000 | $7,500 |
*Calculated using a 3% buyer’s agent commission
Who Should Opt for a 5% Commission Realtor?
Sellers who prioritize savings should consider low-commission real estate agents. They usually provide a similar level of services as conventional Realtors but at a discounted rate. This could mean BIG savings. However, it may not necessarily be true.
📌 Low commission rates do not always lead to greater discounts.
The average commission rate varies nationwide and certain states charge hefty minimum fees. Thus it’s essential to look into the various charges applicable in your state before selecting a real estate agent.
How to Choose a 5% Commission REALTOR?
Here are some of the factors to consider while choosing a 5% commission Realtor:
- Pricing: Most 5% real estate companies charge minimum fees as part of the commission. Research 5% commission realtors in your area to know how much you would shell out.
- Technology: Choose a 5% company with cutting-edge technology that can provide you with a digital dashboard to manage your transactions.
- Quality of Services: Interview multiple real estate agents from different companies to understand who offers the best services. You can also read agent reviews online on platforms like Zillow and Realtor.com.
Why Would an Agent Agree to 5% Commission?
Here are some reasons why agents work at a 5% fee:
- It’s a Hot Seller’s Market: In a seller’s market, the commission rates tend to drop slightly. A low supply of inventory leads to greater competition for listings. This forces agents to reduce their commission rates to get more listings.
- The Agents Lack Experience: Beginner agents with no solid sales history might agree to lower rates. This helps them attract more home sellers.
- The Agents Deal in Luxury Properties: Luxury real estate agents make tens of thousands even at low commission rates. For example, a 5 percent commission agent will earn $50,000 for a property sold at $1 million.
Also, most traditional Realtors are open to negotiating their rates. Thus you don’t necessarily have to compromise on the quality of the services while saving a lot of money.
Risks of Using a 5% Commission Realtor
- Low Quality Services: Most 5% commission Realtors work with broker franchises. The service quality you receive will highly depend on your choice of franchise. There’s no guarantee of good quality service.
- Lack of Personalised Service: During our research, we came across customer complaints about a lack of availability of agents. This is generally because low-commission agents have to handle multiple sellers at once. This leaves them with less time to devote to each client.
- Minimum Fees/Hidden Charges: Some real estate companies charge minimum fees as part of the real estate agent’s commission. You might have to pay more than the advertised 5% commission rate at closing.
Alternatives to 5% Commission Realtors
- Flat Fee MLS: Flat Fee MLS companies charge a standard rate to list your home on multiple listing services (MLS), an online database of homes in your region. The fees are usually set between $179-$399.
- Hire a Discount Real Estate Broker: Discount real estate brokers offer all the services of a traditional broker for a discounted commission. Typically, discount brokers will charge between 0.5% to 3% commission to list and sell your home.
- Negotiate with your Agent: Negotiating with the agent is always on the table. Standard 2.5% – 3% rates are not that different from 5% commission. Therefore, negotiate with your local agent to get a discounted rate.
- Sell to an iBuyer: Many iBuyers, like Opendoor and Offerpad, purchase hundreds of homes across U.S. markets. iBuyers can be a great option if you’re wondering how to sell your house fast.
- Sell to Cash Home Buyers: Individual cash home buyers and companies that buy houses for cash in the U.S. make all-cash offers, usually within 24 to 48 hours. Cash buyers let you skip the hassle of listing on the MLS, inspection, appraisal, etc.
Calculate Your Savings: Traditional Agent vs. 5% Commission Realtor vs. Houzeo
Final Word
In today’s market, several Realtors offer services at discounted rates. Research the different companies before selecting a 5% commission Realtor.
As per research, Houzeo is the top low-commission company. Houzeo outperforms its competitors in all parameters – from technology to customer rating.
Eager to Know How Houzeo Works?
We’ve got you covered. Check out the following video to understand how Houzeo works and why it is one of the best For Sale By Owner websites in the U.S.
» NEED MORE CLARITY? Read these exclusive Houzeo reviews and learn why it is one of the best FSBO sites in America.
FAQs
What is a 5% commission realtor?
A 5% realtor lists your home for 3% of the final listing price of your home. This is generally exclusive of the buyer's agent charges which are 2.5%-3%, so your total will be around 5.5%, giving you almost 0.5% in savings.
What is the average realtor commission?
Traditional realtors usually charge an average realtor commission of 2.5%-3% of the final home listing price for both the buyer and the seller's side. This means you will end up paying up to 6% in total real estate commissions.
Is 5% a good commission?
A 5% real estate commission is a good option for home sellers keen on saving big, although some 5% commission realtors might not provide full package services as a traditional realtor.
Who pays Realtor fees?
It is standard practice for the SELLER to pay the Realtor fees of both the listing agent and the buyer's agent.
Is a 5% real estate commission fair?
Several realtors in the market offer full services at discounted rates instead of the conventional fees, so it is fair to charge 5% real estate commission.
Also Read
- What Percentage Do Realtors Make? Find out how much you pay your real estate agent as a buyer/seller.
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