Is a 2% Real Estate Commission a Good Way to Save Money?

If you’re selling your home, a 2% real estate commission may seem enticing in comparison to the average 3% to 6% rate. But you may be wondering if you can expect the same value from a low-commission real estate agent that you’d receive from a full-commission agent.


In this article, we explore the reasons why some agents might offer a discounted rate and what kind of service you can expect from a low-commission agent or discount brokerage. To help you make an informed decision in your search, we spoke with top-performing real estate agents for expert insights.









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How does a 2% real estate commission work?




Low-commission agents, 2% commission companies, or discount brokerages charge a reduced 2% commission to home sellers. While this may look like a 1% to 4% discounted commission fee of the average 3% to 6% commission on a real estate transaction, it’s actually a 1% discount or less, because it typically only applies to the listing agent’s commission.


Still, that one percent can add up to thousands of dollars in savings, depending on the price of your home. However, paying a reduced commission may impact the total profit you make on your home sale, leaving you with less money at the end of the day.



What is the average real estate commission rate?




According to HomeLight’s real estate transaction data compiled from thousands of home sales each year, the national average real estate agent commission rate is currently 5.8%. Locally, commission rates can vary. Here’s a round-up of commission rates across a few major U.S. cities:



* Los Angeles real estate commissions: 4.58%

* San Francisco real estate commissions: 5.46%

* New York City real estate commissions: 5.50%

* Bakersfield, California real estate commissions: 5.12%

* San Diego, California commissions: 4.82%

* Atlanta, Georgia commissions: 5.72%

* Washington, DC commissions: 5.30%

* Fort Lauderdale, Florida commissions: 6.60%






The data shows that in a typical real estate transaction, the seller usually pays somewhere between 5% and 6% in commission. This is if the seller is on the hook for both the listing agent and the buyer’s agent commissions, which was more typically the arrangement before August 2024, when the NAR lawsuit settlement terms took effect. This change “decoupled” seller and buyer agent compensation. A seller paying for the listing agent’s commission is on the hook for around 3% of the transaction, and buyers are now responsible for paying their own Realtor fees. However, in some markets, sellers are still offering to pay the buyer’s agent commissions.


The listing agent also doesn’t pocket their share of the fee. Both the buyer’s agent and the listing agent will pay a portion of their commission to their companies for brokerage and desk fees.



How much can I save with a 2% real estate commission?




In a 2% real estate commission scenario, the 2% commission fee only applies to the listing agent’s commission. It’s important for a seller to understand that the commission paid to the buyer’s agent doesn’t disappear. If you offer to pay for the buyer’s agent commission to make your listing more enticing, the rate is still around 2% to 3% in commission.


For example, if the average commission in your area is 5.8%, you may pay 2.9% (50% of 5.8%) to the buyer’s agent on top of the discounted 2% fee paid to the listing agent, for a total of 4.9% commission. When you account for the buyer’s agent costs, the savings gap you’d earn with a 2% versus a 6% commission agent narrows considerably.


In the chart below, we show you the total commissions you’ll pay with a discounted 2% listing fee and a 2.5% 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.






Sale Price

2% Commission for listing agent

2.5% commission for buyer’s agent*

Total commission paid (4.5%)

Standard 6% Commission

Potential commission savings





$175,000

$3,500

$4,375

$7,875

$10,500

$2,625





$225,000

$4,500

$5,625

$10,125

$13,500

$3,375





$300,000

$6,000

$7,500

$13,500

$18,000

$4,500





$400,000

$8,000

$10,000

$18,000

$24,000

$6,000





$525,000

$10,500

$13,125

$23,625

$31,500

$7,875





$700,000

$14,000

$17,500

$31,500

$42,000

$10,500





$1,000,000

$20,000

$25,000

$45,000

$60,000

$15,000









*Commission rates are estimates and are not a guarantee for your home sale. dustinpeyser.com


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