Table of Contents

6 min read May 18, 2023

How Does a 3% Real Estate Commission Work?

Home sellers have traditionally paid a 3% real estate commission to each agent engaged in their transaction. Most sales include two agents – a listing agent and a buyer’s agent. The seller pays a total commission of 6%.

However, typical commission rates are on a decline. Given the rise in property prices and broker competition, the 3% commission is no longer viable. Many discount real estate brokers have low commission rates. They offer the same services as traditional brokerages.

We have compiled a list of the top companies that offer real estate services for less than 3% commission.

Key Takeaways

  1. How the 3% Commission Model Works? You will typically pay a 3% commission charge to each of the two agents engaged in your home sale. This amounts to 6% commission.
  2. Can I Skip the Buyer Agent Commission? : It is vital to pay the buyer agent fee. This encourages them to find potential buyers for your home.
  3. 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.

Pay Less Than 3% Commission: Top Alternatives

1. Houzeo

#1 Flat Fee MLS Service

Houzeo Logo
  • Listing Fee: $349
  • Available nationwide
  • 5 Stars 4.9/5 (4,523 reviews)

Houzeo offers 4 Flat Fee MLS packages.

  • Bronze Package – $329+: This package offers Houzeo listing only for 6 months with maximum photos.
  • Silver Package – $399+: This includes everything that home sellers typically look for.
  • Gold Package – $379+: It is Houzeo’s signature MLS package and includes all the technology Houzeo is known for Houzeo Showings, Houzeo Offers, and DigiTransact.
  • Platinum – $349+: It includes the assistance of a licensed broker to help you with negotiations, disclosures, and closing.

👉 Our Take: We recommend the GOLD plan. You’ll have access to Houzeo tech, making managing showings and offer negotiations easy!

» Houzeo Reviews: Houzeo is 100% online. You can finish listing formalities in less than 60 mins.

Houzeo is America’s #1 Flat Fee MLS service because of 4 reasons:

  1. Max Exposure: Houzeo MLS packages give you access to the MLS, Zillow, Trulia,, Redfin, and 100s of other websites.
  2. 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.
  3. 100% Online: Houzeo is high-tech. For you, this means easy listing, fast changes, online showings, and online offers. Houzeo Mobile App is also very powerful.
  4. No Listing Commission: In most states, you’ll be paying just a small flat fee to list on MLS. Houzeo covers 47 states + DC! And remember, all fees are disclosed upfront, so there are no Houzeo hidden fees. You get to bypass the listing agent commission!

There are no dealbreakers with Houzeo.

» Houzeo Reviews: Houzeo is rated “Excellent” with a 4.9 out of 5-star rating by 4,523 home sellers on Google Reviews and Trustpilot!

Houzeo is rated 4.9 out of 5 stars by thousands of home sellers on Google & Trustpilot.

» Houzeo Reviews: Check out how Team Houzeo has addressed all Houzeo complaints from home sellers. is the #1 ranked Flat Fee MLS service. Houzeo provides an unbeatable combination of max savings, 5-star customer support, and cutting-edge technology.

Houzeo’s Bronze package is priced at $329. The Silver package is priced at $399, and the Gold at $379 + 0.5% (Minimum $999) at closing. The virtual full-service Platinum package is priced at $349 + 1% (Minimum $999) at closing.

2. Redfin


  • Listing Fee: 1.5% of sale price
  • Available in 80+ U.S. Markets
  • 3.3 Stars 3.3/5 (372 reviews)

Redfin is America’s #1 discount real estate brokerage. This low-commission broker specializes in home buying. It’s technology sets it apart from all other platforms.

  • Redfin Full-Service Agent – 1.5% Commission: This is a full-service package. This includes pricing assistance, listing paperwork, negotiation support, etc.
  • Redfin Concierge – 2.5% Commission: The “Concierge” plan includes everything from the Full-Service package. Additionally, it includes services like professional cleaning, home staging, and more.
  • Redfin Premier Agent – 1.5% Commission: This package is exclusively for luxury properties and includes everything that comes with the Full-Service package.

👉 Our Take: is a good nationwide discount real estate brokerage. We recommend its concierge plan because it covers everything needed for a successful real estate transaction.

» Redfin Reviews: The Reality of 1% Fees, Pros, Cons, & Alternatives!

Here are some advantages of choosing Redfin:

  • Advanced Technology: Redfin is primarily known for its advanced tech platform, mobile app, and home value estimation.
  • Full-Service Agents at Low Commission – 1.5%: Redfin’s full-service package is priced at 1.5%. It saves you thousands compared to the traditional 3% listing commission.
  • Buyer Rebate – 0.5%: Clients who sell and buy with Redfin within one year get a rebate of 0.5% in the second transaction. However, this offer is available with the Full Service Plan.
  • Detailed Paperwork: Redfin provides the necessary paperwork assistance with a marketing plan.
  • Nationwide Coverage: Redfin covers 80+ markets in the US.

In our research, we found some red flags of Redfin, that could make your experience less satisfactory.

  • Lack of Personalized Services: Customers have often complained that Redfin agents are not able to give personalized service, as they serve a high volume of clients.
  • Poor Customer Reviews: Customers have complained that agents are often unreachable and unprofessional.
  • Slow Listing Process: According to Redfin’s listing agreement, a Redfin property takes 18 days to list on MLS. Services like Houzeo will list you on the MLS within 24 to 48 hours.
  • Limited Agent Selection: As per customer reviews, Redfin lacks an array of agents. This means you get an agent assigned automatically without having any 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 services apart from Redfin’s defined services.

Redfin has an average rating of 3.3 out of 5 from 372 reviews on Consumer Affairs.

» Redfin Reviews: The Reality of 1% Fees, Pros, Cons, & Alternatives!

Redfin is primarily known for its advanced tech platform and mobile app. It covers 80+ markets in the US.

Redfin’s listing agreement states they will list your property on the MLS in 18 days. Services like Houzeo will list you on the MLS within 24 to 48 hours.

3. Ideal Agent


Ideal Agent

Ideal Agent Logo
  • Listing Fee: 2% of sale price
  • Nationwide coverage
  • 4.9 Stars 4.9/5 (5,727 Reviews)

Ideal Agent is among the top discount brokerages. It is an agent matching service that specializes in home selling.

  • Full Service – 2% Commission: The full-service package will get you all the services from start to end. This includes professional photos, negotiation, and closing assistance.

👉 Our Take: Ideal Agent is a good choice for home sellers. Although their overall online reviews are good, they are often inconsistent while matching agents with clients. They have no services for home buyers.

» What is Ideal Agent: Check out our reviews of Ideal Agent to know more about them.

Ideal Agent is an agent matching service that helps sellers find low commission real estate agents.

  • Agent Matching: They claim that you will be matched with an agent from the top 1% producers in your locality.
  • Pre-Negotiated Commission: Ideal Agent has pre-negotiated the commission with their agents. This allows sellers to focus on the other aspects of the transaction.
  • Profit Maximization: Your agent will leverage the best features of your house and help maximize your sale profits.
  • Dedicated Concierge: Their agents guide you in every step of the transaction from marketing, to negotiation assistance, and closing.

» How does Ideal Agent workHere is a detailed explanation about them. Check it out!!

Ideal Agent has some drawbacks we came across in our research.

  • Low Savings: Ideal Agent charges more than most low-commission companies, compromising your savings. You will be paying a total commission of 4.5% – 5% even with discounted listing fees.
  • Additional Referral Fees: Ideal agent fees includes a 25% referral fee from real estate agents after successful transactions. Since you pay the agent, these fees are essentially going from your pocket.
  • Outdated Technology: Their agent matching algorithm is inconsistent. Several customers complain about being assigned sub-par agents.
  • No Buyer Support: Ideal Agent isn’t a buyer-focused platform and they offer no significant benefits for home buyers.

Ideal Agent has a rating of 4.9 out of 5 from 5,727 reviews on TrustPilot.

» Ideal Agent Reviews: Check out our reviews of Ideal Agent to make an informed decision.

Ideal Agent is an agent matching service that bridges sellers and buyers with licensed real estate agents in their locality.

They offer a dedicated concierge but have weak technology. Customers who have worked with them prior have complained about hidden charges as well.

4. Simple Showing


Simple Showing

simpleshowing logo
  • Listing Fee: 1% of sale price
  • Restricted coverage
  • 4.75 Stars 4.9/5.0 (125 reviews)

SimpleShowing, like any other low-cost real estate broker, matches sellers with real estate agents.

  • Listing Agent Commission – 1%: A SimpleShowing agent provides full-service MLS listing at a 1% commission rate. The premium lockbox charges will increase your costs.

👉 Our Take: We recommend Simple Showing for their Buyer’s Rebate Program. But Simple Showing has a minimum fee charge that could be higher than the advertised 1%.

SimpleShowing is a decent option when buying or selling a property.

  • Easy Property Search: SimpleShowing provides a home search experience at your fingertips. You can look for properties and book home tours on their website, saving time and money.
  • Professional Photography: They coordinate professional photos and videos of your home at no additional charge.
  • Buyer’s Rebate: SimpleShowing rebates a portion of its commission to eligible home buyers.
  • Dedicated Agents: From home valuation and developing a marketing strategy to negotiating offers and closing, their agents will always assist you.

During our research, we found a few red flags with Simple Showing.

  • Buyer’s Rebate Eligibility: The buyer is eligible for a rebate only if the buyer uses SimpleShowing as their Buyer Broker.
  • Lender’s Approval: Some lenders may not allow buyers to receive a refund from SimpleShowing. Lenders consider contracts, mortgage products, and pricing policies to allow the buyer to receive full or a part of the rebate amount.
  • Minimum Commission: SimpleShowing has a minimum commission of $3,500. Rebate applies only if the minimum commission accounts for $3,500.
  • Limited Coverage: Simple Showing provides services in only 3 states – Florida, Texas, and Georgia.

SimpleShowing has a 4.9 out of 5 stars from 125 total reviews on Zillow.

SimpleShowing is a full-service brokerage licensed in GA, FL, and TX. They use technology, such as their mobile app, to make the traditional home-selling process easier.

However, with their limited coverage and agents, they might not cover all your needs.

5. UpNest



Upnest logo
  • Listing fee: 2.5% of the sale price (or as decided by agent)
  • Available in all major cities
  • 4.75 Stars  4.7/5 (56 reviews)

UpNest is an innovative real estate marketplace that connects home sellers and buyers with agents in their area.

  • Pricing: There’s no direct cost to using UpNest, but the savings are marginal. UpNest agents decide their commission fees. The discount rate varies.

👉 Out Take: We do not recommend Upnest for home sellers or buyers. UpNest’s network is reliable and quick, but savings aren’t guaranteed. You might end up paying more than you had expected.

» Is UpNest Legit? Find out if UpNest is legit!

Here are some advantages of using Upnest. No Obligation Service

  • No Obligation Service: Within 24 hours timeline after signing up, UpNest will send you multiple agents you can choose from. If nothing fits, you can simply walk away.
  • High-quality Agent Network: UpNest partners with top agents from leading national brokerage firms across the U.S. All agent matches remain unbiased, based on your criteria and preferences.
  • User-friendly Dashboard: UpNest’s customer dashboard is intuitive and makes it easy to compare agent matches. It also features options to contact the matched agents or your UpNest Advisor with a single click.

» What is UpNest? Read the comprehensive review to know more!

In our research, we found some red flags associated with UpNest.

  • Marginal Savings: The commission rates aren’t pre-defined. The negotiation ultimately relies on you. Past sellers have claimed that the lowest listing fee is 2% which is quite high.
  • Inconsistent Customer Service: Customers have revealed that some UpNest representatives are extremely helpful and knowledgeable. However, rest of them struggle to answer simple questions.

» How Does Upnest WorkAgent-matching at UpNest is pretty straightforward. Check it out!

UpNest has a rating of 4.7 out of 5 from 56 customer reviews on BBB.

» UpNest Reviews: How Much Will it Save You in 2023?

UpNest connects you with agents in your area by utilizing technology and market data. They partner with top agents from leading national brokerage firms across the U.S.

However, your savings are not guaranteed. Your ability to negotiate would be the key factor in the deal. In other words, you may end up paying more commission, or discount rates won’t go low as you expected.

How 3% Commission Realtors Work?

You will typically pay a 3% commission charge to each of the two agents engaged in your home sale.

  • Listing Agent: Your listing agent represents your interests and markets your home. They list your home on the local multiple listing service (MLS) and other real estate websites.
  • Buyer Agent: The buyer’s agent receives a 3% buyer’s agent commission for introducing the buyer to the property.

Why Do Sellers Pay a 3 Percent Buyer’s Agent Fee?

A common practice to make the purchase more reasonable is to have the seller pay the buyer’s agent commission.

A competitive buyer’s agent commission is critical. Given that buyers’ agents are paid on commission, offering an attractive commission encourages them to find potential buyers.

A buyer incentive increases your chance of receiving more offers, encourages buyers to bid up the sale price, and shortens the selling process.

How to Choose a 3% Realtor?

If you are willing to pay a 3% commission, hire the finest. Do not settle for “good – enough”. Here are some parameters to choose the best Realtor.

  • Technology: Choose a 3% 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
  • Experience: Look for a seasoned agent. A skilled agent can guide you through the otherwise complicated process of selling or purchasing a house.

Other Ways to Get a Lower Commission Rate

Want to pay less than the customary 3% real estate agent commission? Here are some options:

  • Negotiate With Your Agent: Negotiating realtor commission rates is totally possible. Prior to speaking with your Realtor, research the state average commission rate. If you have actual data in your hands, you can bargain for less.
  • Sell Without a Realtor: You can skip the 3% listing commission by selling your home without a Realtor. With high-tech selling platforms like Houzeo, it is easier than ever!
  • Hire a Low Commission Realtor: With a low commission real estate agent, you get all the services of a traditional Realtor at a lower commission of 1% to 2%.

How Much Can I Save?

You end up with zero savings with a 3-commission Realtor. However, if you already have a buyer, you can save on the buyer agent commission.

Alternatives to 3% Commission Realtors

If saving money is your priority, you can go with the following options:

  1. 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.
  2. 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.
  3. 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.

Is a 3% Commission Realtor Worth?

No! A 3 percent commission Realtor is a thing of the past. You may now locate top real estate brokers that bill far less than the going fee. Make sure you speak to agents offering such discounts before choosing one. Compare fees, services, and experience to find someone who fits your requirements and budget.

With Houzeo, you can get your home on the MLS for a small flat fee. You get access to cutting-edge tools like offers dashboard, showings management, and many more to make your selling journey easy.

Frequently Asked Questions

Do realtors get the entire 3 percent commission?

No. The listing agent and the selling agent representing the seller divide the total commission evenly. However, the buyer agent get the entire 3%.

Is 3 commission mandatory for realtors?

No, it is not. You can always negotiate realtor commission and sell for less than 3%.

Is 3% commission a lot?

3% is the traditional commission that a seller pays to the Realtor. But with the advancement of technology, sellers can hire low commission agents and save thousands on Realtor commissions.

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