Real estate commission rates have traditionally hovered around 6%, with sellers typically paying 3% to their agent and 3% to the buyer’s agent. But that’s changing. Many agents now offer lower rates — like a 4% total commission — which can save sellers thousands of dollars.
A recent National Association of Realtors (NAR) settlement affects real estate transactions and how agents work. New rules make it easier for buyers and sellers to negotiate fees and shop around for better deals, creating more competition among agents, potentially leading to lower rates.[1]
With the right strategy, you could pay your listing agent 2% (or less) and still get full service. Here’s what a 4% commission structure looks like — and how to find agents who offer it.
💰 Want to pay less than 4% commission? Clever Real Estate pre-negotiates low rates with top agents from brokerages like RE/MAX and Keller Williams — so you get full service for just a 1.5% listing fee. No pressure, no obligation. Compare agents and save thousands today!
What is 4% real estate commission?
| Commission rate | Total commission | Seller’s agent share | Buyer’s agent share | Total seller savings |
|---|---|---|---|---|
| 6% | $18,000 | $9,000 | $9,000 | None |
| 4% | $12,000 | $6,000 | $6,000 | $6,000 |
A 4% real estate commission currently represents a significantly lower rate than the traditional 6% rate, and can mean big savings for sellers.
Typically, the total commission is split between the listing agent and the buyer’s agent. A 4% commission often means each agent earns 2%, though splits like 3% and 1% are also possible depending on the agreement.
Here’s what that difference looks like on a $300,000 home:
- 6% commission = $18,000 total ($9,000 per agent)
- 4% commission = $12,000 total ($6,000 per agent)
That’s a $6,000 total savings — money that sellers can put toward their next home, pay off debt, boost retirement savings, or use for other priorities.
Impact of recent NAR settlement
The National Association of Realtors (NAR) officially implemented major rule changes on August 17, 2024, following the terms of a nationwide settlement.[2]
"Agents might need to justify their rates based on the quality of service they provide, potentially leading to more competitive pricing and tailored service practices," says Lorelie Abedes of Click Cash Home Buyers.[3]
Key changes now in effect include:
- No more publishing agent compensation on the MLS. Agents won’t be able to post how much they get paid, which may focus attention more on the services offered than cost.
- Buyers must sign a written agreement with their agent. Before touring homes, buyers must sign a written agreement outlining the agent’s compensation and duties. “Buyers can no longer jump from one agent to another while testing out who they fit best with,” explains Marcia Socas, a licensed realtor and investor.[4]
- MLS participation rules have changed. Agents are no longer required to subscribe to the MLS, giving them more flexibility in how and where they market listings — and potentially reducing costs.
While the settlement doesn’t specifically address the amount of commissions, many experts believe it may lead to lower commission rates throughout the industry.
"This settlement encourages more competitive commission structures, potentially reducing costs," states Dimitri Zubrich, a Re/Max Affiliates realtor. "It might also increase private sales." Additionally, this may encourage a shift toward alternative models, such as flat fee or discount brokerage that provides a set, lower total rate.[5]
Jonathan Faccone, managing member and the founder of Halo Homebuyers, recommends sellers and buyers research and compare agents. "This settlement may lead to more competition in the market, providing buyers and sellers with more options when choosing an agent."[6]
Why would agents accept a 4% commission rate?
Agents might accept a 4% total commission rate for various reasons.
For one, lowering commission rates in competitive markets can attract more clients. This can help agents secure more listings so they can close more deals. By taking a volume-based approach, agents can compensate for the lower rate per transaction.
Certain markets, situations, and property locations and conditions can also impact rates:
- Some properties may not require as much effort to sell, allowing agents to work for lower rates.
- In some areas, agents can represent both the buyer and seller, a practice called dual agency. The agent may accept a lower commission rate since they aren’t splitting it with another agent.
- Finally, agents helping clients sell their current homes and buy new ones may also offer reduced rates for handling multiple transactions.
Agents representing high-value properties may also be able to provide lower commission rates since commissions can still be significant even at a lower rate. For example, a 4% total commission on a $1 million property is $40,000, with a 50/50 split providing each agent $20,000.
Pros and cons of a 4% commission realtor
Pros
- Save on agent fees
- Price your home more competitively
- Attract more buyers, leading to quicker sale
Cons
- Smaller marketing budget
- Limited agent availability
- Less experience (if you get newer agent)
Hiring a 4% commission realtor provides several benefits. Perhaps the most significant advantage is the savings on your agent fees, allowing sellers to keep more proceeds. Sellers may also be able to price their home more competitively, helping them attract more potential buyers. The increased competition from buyers may also lead to a faster sale.
But you’ll also want to consider potential drawbacks. Agents with lower rates may operate with closer margins, such as a reduced marketing budget. This could potentially limit the exposure your property receives.
Agents who take a volume-based approach may have less time for each client due to managing a more extensive client list. Also, some agents may offer lower rates to build up their practice. These newer or less experienced agents may not have as much local market experience or connections, potentially impacting service quality.
How to get a 4% total commission rate
Research your local market
Understanding your local market and average commission rates is essential to effectively negotiating realtor commission rates. When researching, identify the average rates for your market. This can serve as a benchmark for your negotiations and help set realistic expectations.
"Buyers and sellers should talk with agents," recommends Lorelie Abedes. "Ask about their services, experience, and market knowledge." You can also gather information by checking online resources and looking at recent home sales data in your area. Be sure to look for recent sales that are comparable to your home.
Negotiate a lower rate
Before negotiating realtor commissions, consider what you can offer potential agents to help support them working for a lower rate.
For example, highlighting your property’s strengths can help you justify a lower commission. Properties in excellent condition, in a seller’s market, or a prime location are easier to sell and likely to sell faster, giving you more room to negotiate. You may also be able to justify reducing the rate if you’re buying and selling with the same agent.
When shopping around for agents, be sure to interview several realtors. This will allow you to compare commission rates and services and create competing bids for your listing. Use your research of local market rates and your state’s average commission rates to help justify a lower rate if an agent asks for a higher rate.
Lastly, consider initially asking for a rate slightly lower than what you’re comfortable with. This allows room for negotiation without exceeding the rate you want.
Use a discount broker
A discount broker or low commission agent is a company or agent who sells your home for less than the average real estate agent commission rate in your area. Discount brokerages provide an alternative to traditional agents, often providing essential or full services at a lower rate.
Rates can vary, but are generally significantly lower than traditional rates. For instance, some low commission agents and companies may offer listing services for as low as 1.5-2% instead of 3%.
When researching discount brokerages, pay attention to their services compared to traditional agents. Additionally, make sure their services provide the assistance you need. Some companies may offer a comprehensive service, while others’ services may be more limited due to the reduced rate. Before signing, talk with the agent or broker to ensure they fit your needs well.
Here are discount broker options:
1. Clever Real Estate
Clever Real Estate offers a service to find high-quality agents who offer a lower commission. Clever matches you with vetted agents in your area who sell for only a 1.5% listing fee. This service is advantageous because it connects you with multiple agents, so you can select the person who best fits you and your situation. Furthermore, you can request more matches if you don’t initially find an agent.
Clever helps connect you with top-rated, local agents from known brands like Century 21 and Coldwell Banker. The experienced agents in Clever’s network have already agreed to provide a lower commission rate, reducing your need to negotiate.
Clever’s service works well for anyone looking for a top-quality agent willing to work at a lower rate. Advantages of this free service include eliminating the need to negotiate, having a guaranteed 1.5% commission rate, and being able to select from a wide number of agents.
However, you’ll want to ensure the selected agent provides all the services you need. Some services, like home staging, may or may not be included or only offered as an add-on service. So, you’ll want to research and interview agents before signing.
2. Redfin
Redfin is a legitimate discount brokerage that provides a 1.5% listing fee to sellers or a 1% listing fee for clients who buy and sell. Their agents provide the typical services you’d expect from a traditional service.
Redfin offers lower rates because it uses a team-based service model. This means you'll work with multiple team members at different stages of your real estate transaction instead of one agent or contact, allowing Redfin to take on a higher volume of clients.
Redfin is one of the largest brokerages in the United States, with coverage in most major cities. This service is a good fit for people who want to save on fees and don’t mind a team-based approach. Redfin also makes it easy to manage your listing online or through the app.
However, you may not receive the same one-on-one time with agents. Also, Redfin does have minimum fees, which can vary between markets. So, it’s important to verify the minimum fees to ensure you don’t end up paying more than 1.5%, especially if you sell a lower-priced home.
3. Ideal Agent
Ideal Agent is an online platform that matches clients with full-service, low-commission agents. This company matches you with top agents who will work for a 2% listing fee. While this is lower than industry standards, there are other similar services whose agents will work for less.
Ideal Agent does charge a $3,000 minimum fee. But this will only affect people selling homes for less than $150,000.
Ideal Agent’s free matching service is available nationwide. The company reports matching with top brands like Keller Williams. This service is great for people seeking help finding a quality agent willing to work at a lower commission rate. However, similar services will provide lower pre-negotiated fees than those offered by Ideal Agent.
