How much can you save with a 1% real estate commission?
With a 1% commission on the listing agent side, the savings can still be significant, depending on your home’s value.
For example, on a $300,000 home, a traditional 6% commission would amount to $18,000, split between the two agents at about $9,000 apiece.
In contrast, a 1% commission for the listing agent would be $3,000, with the buyer’s agent’s commission potentially remaining at the standard rate, often around 2.5% to 3%, which is $7,500 to $9,000 in this case. Therefore, your total commission could range from $10,500 to $12,000, saving you between $6,000 to $7,500.
In the chart below, we show you the total commissions you’ll pay with a discounted 1% listing fee and a 2.9% buyer’s fee. The actual amount you’ll pay a buyer’s agent depends on what’s typical for your area and the rate you agree to pay. (As we discuss later, you can negotiate a buyer’s commission that is lower than the average rate, but there are possible drawbacks.)
| Sale Price | 1% Commission for listing agent | 2.9% commission for buyer’s agent* | Total commission paid (3.9%) | Standard 6% Commission | Potential commission savings |
| $175,000 | $1,750 | $5,075 | $6,825 | $10,500 | $3,675 |
| $225,000 | $2,250 | $6,525 | $8,775 | $13,500 | $4,725 |
| $300,000 | $3,000 | $8,700 | $11,700 | $18,000 | $6,300 |
| $400,000 | $4,000 | $11,600 | $15,600 | $24,000 | $8,400 |
| $525,000 | $5,250 | $15,225 | $20,475 | $31,500 | $11,025 |
| $700,000 | $7,000 | $20,300 | $27,300 | $42,000 | $14,700 |
| $1,000,000 | $10,000 | $29,000 | $39,000 | $60,000 | $21,000 |
*Commission rates are estimates and are not a guarantee for your home sale.
As you consider these potential savings, it’s crucial to remember that they might come with trade-offs in terms of service quality and agent experience. Weighing these potential savings against the value brought by a full-commission agent can help you make an informed decision about which option best suits your needs and sale goals.
“We ask the question, ‘So, are you interested in saving money, or are you interested in making more money?’” Medford says. “We can come in and save you money, absolutely. But I would far prefer — rather than saving you $10,000 — to come in and make you $100,000. Which option would you want?”
Why would an agent offer a 1% commission?
An agent might be willing to offer a 1% commission for several strategic reasons:
Fewer homes listed
Offering a 1% commission can give a real estate agent an edge in a competitive market where inventory is low, and other agents are clamoring for limited listings. This can happen during seasonal fluctuations in the market, like fall and winter, or when the entire housing market is experiencing a downturn. During these periods, agents may sign on with a discount commission company or be more open to negotiating their commission rates to secure your business.
In a thriving seller’s market
When homes are flying off the market, an agent may not need to invest as much time or marketing resources into selling your home. In such a fast-paced environment, a reduced commission can still be worthwhile for the agent, especially if they are handling multiple transactions in quick succession.
Gaining experience and building a portfolio
Newer or part-time agents often offer lower commission rates to attract more clients. This approach allows them to gain valuable experience and increase their transaction numbers, which is vital for growing their business and reputation in a competitive market.
Your home is highly marketable
If your property is in a sought-after location, priced attractively for its market, or boasts popular features and upgrades, it may be considered an easy sell. Agents might view such properties as less of a risk and be more inclined to take a lower commission, anticipating a swift and successful sale.
High-value properties
For luxury homes or properties with significant upgrades, even a 1% commission can translate into a substantial amount due to the higher sale price. Agents may find these high-value transactions worthwhile, even at a reduced rate.
