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
100% ONLINE
Listing Fee: $249Houzeo is a high-tech platform that streamlines listings, updates, and online showings/offers. Choose from 3 Flat Fee MLS packages to simplify your home sale.
- Silver Package – $249 + 0.5% at Close: You can upload 24 photos, and your listing term will be 6 months. You can also make unlimited changes to your listing.
- Gold Package – $299 + 1% at Close: You can post the maximum number of photos, avail licensed broker assistance, get access to seller disclosures, and a premium yard sign.
- Platinum Package – $349 + 1.25% at Close: You get virtual full assistance from a licensed broker and a 12-month listing term.
Houzeo is America’s #1 Flat Fee MLS service because of these reasons:
- Max Exposure: Your home listing is syndicated to popular real estate websites like Zillow, Trulia, Realtor.com, etc., increasing its visibility.
- Quicker Sale: Houzeo’s Homes For Sale page showcases your home to thousands of buyers, which may result in a faster sale.
- 100% Online: You can list your home, manage offers, and close deals, all at your fingertips with a powerful mobile app.
- 5-star Customer Service: You have access to listing support and chat services 6 days a week.
- No Hidden Fees: What you see is what you pay. Houzeo mentions all of its fees upfront on its website.
There are no dealbreakers with Houzeo.
» Is Houzeo Legit? Discover why so many homeowners are choosing Houzeo to list their properties.
Houzeo is rated an impressive 4.9 out of 5 stars by thousands of home sellers on Google and Trustpilot. Homeowners also praise the Houzeo Mobile App, which helps them list, manage, and close their home sales seamlessly—right from their phones.
» Houzeo Reviews: Rated “Excellent” by 11,000+ happy home sellers.
👉 Our Take: We recommend Houzeo’s Gold Plan for most home sellers. It gives you maximum exposure, highest savings, and access to Houzeo technology features. A licensed broker will also assist you with pricing your home, offer negotiations, inspection, and closing.
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
Refund/Rebate Program
1-1.5% Listing FeeFor home sellers, Redfin.com has three main features:
- 1.5% Listing Fee: Redfin charges a 1.5% discounted listing fee. This fee is further reduced to 1% if you also buy a home with a Redfin agent within a year.
- Professional Assistance: The standard package includes services from listing to closing, that is, from pricing assistance to closing coordination.
- Redfin Concierge: For high-value luxury homes, Redfin offers services like home staging, deep cleaning, and select renovations for additional costs.
Redfin.com offers these features for home buyers:
- Technology-Driven Search: Redfin offers powerful search tools, including map-based searches, saved searches, and instant updates on new listings.
- Redfin Agents: Some Redfin agents may offer a different incentive structure than traditional commission-based agents, making negotiation possible.
- Refund/Rebate Program: In some markets, buyers receive a portion of the buyer’s agent commission back as a refund at closing.
Here are some advantages of choosing Redfin:
- Cost Savings: You pay significantly lower than the traditional 3% listing/seller agent commission. Plus, you could qualify for a rebate.
- Professional Marketing: Professional photography and 3D walkthroughs are a part of Redfin’s standard package. This enhances a home’s online presence.
- Advanced Technology: With 40+ filters to narrow down your search, the Redfin app makes it easy to find the right home.
- Local Agent Assistance: Local agents know their market better and can help you secure a good deal.
Here are some limitations we found with Redfin:
- Minimum Fees are Applicable: The 1.5% commission is a minimum percentage and varies by market.
- No Freedom in Agent Selection: You get an agent assigned automatically without having a choice in the matter.
- Service Variation: Redfin agents often handle a high volume of clients. This may limit personalized attention and reduce the range of services you receive.
- 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 delivers a tech-forward real estate experience. You get services like home pricing guidance, professional photography, and digital marketing. Redfin also serves as a home-buying tool as it lets users schedule showings and connect with local agents. However, you don't get to select your agent yourself.
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
LIMITED COVERAGE
Listing Fee: 1% CommissionSimpleShowing is a licensed full-service brokerage with just one package:
- 1% Listing Fee: This package provides full-service support from licensed agents who can assist you in your sale, right from listing to closing. You also get help with the paperwork for selling a house and can schedule home tours online.
Here’s what stands out about SimpleShowing:
- Maximum Exposure: Your home gets listed on the MLS and various national websites, including Realtor.com, Zillow, Trulia, etc.
- No Upfront Costs: You need not pay any fee to list your property. The 1% amount is deducted from the selling price after the sale is closed.
- End-to-End Agent Support: SimpleShowing offers pre-listing consultation, ongoing support, and contract assistance throughout the selling process.
- Access to Professional Photographers: You can opt for their professional photographers to help you get the best photos of your home.
SimpleShowing has the following downsides:
- High Listing Fees: You need to pay at least $5,000 as the listing fee, which is quite high, especially for a small-scale home.
- Limited Agent Pool: You can’t choose or switch agents if any issues arise with your assigned representative.
- Limited Coverage: They offer their services only in Georgia, Florida, and Texas.
SimpleShowing has 4.9 out of 5 stars on Google from over 110 reviews.
👉 Our Take: We recommend SimpleShowing to first-time home sellers for their their full-service support. However, their fees are on the higher side compared to some Flat Fee services that offer more tools at a lower cost.
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
5.0/5.0
(601 reviews)
5.0/5.0
(601 reviews)HIGHLY QUALIFIED AGENTS
Listing Fee: 1.5% of sale pricePrevu 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
Listing Fee: 2% of Sale PriceIdeal 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 website For Sale By Owner 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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