Pros and Cons of Low Commission Real Estate Agents: Are They Right for You?

When it’s time to sell your home, it’s only natural to think of your bottom line. A home, after all, is most people’s largest financial asset. Maybe you remodeled the kitchen and want to get that money back in the sale, or you’re planning on funding part of your retirement with your sale proceeds. Most home sellers want to make a profit when they sell and to maximize that profit (and lower home selling costs) you might have considered contacting low commission real estate agents to help with your sale.

Low commission real estate agents offer to sell your home for a commission a few percentage points lower than what’s typical (normally around 5.8% of the home price, with half going to the buyer’s agent and half to the listing agent). They claim that because they’re paid less, you make more on the sale. But will that savings on commission cost you in other ways, potentially in a much lower sale price?

Ahead, we’ll break down the pros and cons of low commission real estate agents to help you determine if hiring one is right for your home sale and financial future.

What’s the average real estate commission?

The average commission rate stands at 5.8% nationwide and has hovered around 6% for decades. Agents tend to stay around the average for their area — if they ask for more, fewer clients will list with them. However, some real estate agents choose to go lower.

That 5.8% figure isn’t exactly what each agent brings in. The commission, which is a percentage of the home sale price, is ultimately split between the buyer’s agent and the seller’s agent.

What are low commission real estate agents?

A low commission agent, as the name implies, charges a lower commission than a traditional agent. For example, if the standard in your area is 3%, they might charge 2%. Keep in mind that despite the listing agent lowering their commission, the buyer’s agent will still want to get paid their full fee.

That’s because the agent who represents your home doesn’t dictate the buyer’s agent’s commission. The commission structure in the United States is set up so that a listing agent typically splits their 5.8% commission with the buyer’s agent 50/50.

Are low commission real estate agents reputable?

Low commission agents still have to complete licensure requirements and training, making them just as reputable as other agents. If they’re also a Realtor® — meaning they are a member of the National Association of Realtors — they must comply with the association’s ethical standards. Some markets have more discount commission agents than others.

Zach Walkerlieb is an agent who sells homes 56% faster than average agents in Las Vegas, Nevada. In times when housing supply is low and demand is high, he says that low commission agents can become more common.

“It’s actually advantageous for the seller, depending on the price range and condition of the home, to be aware of what commission can be offered,” he says. “If you’re offering it to the public and you can get away with offering 2.5% instead of 3%, it can save thousands of dollars.”

In a more balanced market in which each home gets fewer offers, who you work with could end up making a big difference in maximizing your home sale. In other words, the value added by working with a top agent can more than cover the savings of the lower commission.