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Save Thousands on Realtor Fees with 4 Proven Strategies
- Rene Perez
- Jan 24
- 6 min read
When you sell your home, the single largest cost is almost always the realtor commission. The industry has normalized a model where sellers pay exorbitant fees, often without a clear understanding of where that money goes. In 2025, the average total commission reached 5.44% of the home's sale price [3].
For a $500,000 home, that’s $27,200 deducted from your proceeds. For a $1 million home, it's over $54,000.
The real estate industry is broken, but you don’t have to accept these inflated costs as a given. You have options. Here are four proven strategies to save thousands on realtor fees, examined with precision and zero excuses.
How Realtor Commissions Work in 2026
Traditionally, the home seller pays the commission for both their own agent (the listing agent) and the buyer's agent. This total fee is taken directly from the sale proceeds at closing.
Following the landmark NAR settlement, which received final approval in late 2024, sellers are no longer required to advertise a buyer's agent commission on the Multiple Listing Service (MLS) [1]. While this was intended to create more transparency, many sellers still offer a commission as a concession to attract a wider pool of buyers [3]. The industry still faces uncertainty as appeals to the settlement are heard [2].
Here’s a typical breakdown for a $500,000 home sale:
Fee | Rate | Amount |
Listing Agent Fee | ~2.72% | $13,600 |
Buyer’s Agent Fee | ~2.72% | $13,600 |
Total Paid by Seller | ~5.44% | $27,200 |
This outdated, one-size-fits-all approach is precisely what we at ContextRE are working to change.
4 Proven Strategies to Save on Realtor Fees
1. Choose a Brokerage with a Modern Fee Structure
Best for: Most sellers, especially those who demand full, expert service while maximizing their savings and maintaining control.
Wrong for: Sellers who prefer a rigid, non-negotiable commission structure regardless of the cost.
The most effective way to save on realtor fees is to partner with a pro-consumer brokerage that rejects the traditional, bloated commission model. At ContextRE, we were founded on the principle that sellers deserve an equitable experience. We don't believe in a "one-size-fits-all" percentage.
Instead, we use a personalized model. After a brief consultation to understand your goals, we create a custom plan where you only pay for the services you actually need. This can be a Flat Fee or % Commission, giving you complete control over your costs.
Pros:
Massive Savings: Our flexible models can save you tens of thousands of dollars compared to traditional agents.
Expert Service: You work directly with a top-ranked broker, not a junior associate.
Total Transparency: We offer flat-fee options as low as $4,500, with all costs disclosed upfront.
Cons:
Requires a brief intro call to customize your service plan.
Our direct brokerage services are currently focused in CA, WA, and CO.
Here’s how our model provides dramatic savings on a $500,000 sale:
Traditional Agent | ContextRE (Flat-Fee Model) | |
Listing Fee | $13,600 (2.72%) | $4,500 |
Buyer's Agent Fee | $13,600 (2.72%) | $13,600 (2.72%) |
Total Cost | $27,200 | $18,100 |
Your Savings | - | $9,100 |
2. Negotiate Commissions Directly with a Traditional Agent
Best for: Sellers in a hot market with a high-demand, easy-to-sell property.
Wrong for: First-time sellers, those with unique properties, or anyone in a buyer's market.
You can always attempt to negotiate a lower commission with a traditional agent. If your home is in a prime location and priced competitively, an agent might be willing to reduce their fee slightly to secure the listing. Your strongest leverage is a straightforward, quick sale.
However, most agents are resistant to significant cuts. Their brokerage often dictates a minimum fee, and many will not reduce their rate by more than 0.5%. The process can be uncomfortable, and success is not guaranteed. For more actionable tips for negotiating, understanding your leverage is key.
Pros:
You may achieve modest savings without changing agents.
Keeps you in control of the agent selection process.
Cons:
Savings are typically small (0.5% - 1% at best).
Negotiating can be awkward and may strain the agent relationship.
Many agents simply will not lower their fee.
A successfully negotiated rate might look like this on a $500,000 home:
Traditional Agent | Negotiated Rate | |
Listing Fee | $13,600 (2.72%) | $11,250 (2.25%) |
Buyer's Agent Fee | $13,600 (2.72%) | $13,600 (2.72%) |
Total Cost | $27,200 | $24,850 |
Your Savings | - | $2,350 |
3. Sell For Sale By Owner (FSBO)
Best for: Experienced real estate professionals or sellers who have already identified a buyer.
Wrong for: Nearly all typical home sellers.
Selling FSBO means you take on the entire responsibility of the sale without a listing agent. This includes pricing, marketing, professional photography, staging, scheduling showings, vetting buyers, negotiating offers, and managing all legal paperwork.
While you save the listing commission, the risks are substantial. FSBO homes historically sell for significantly less than agent-represented properties. That price gap often exceeds any commission savings. Furthermore, to attract buyers working with agents, you will likely still need to offer a buyer's agent commission of 2.5-3%.
Pros:
You avoid paying a listing agent commission.
You have 100% control over the entire sale process.
Cons:
High risk of a lower sale price, negating any savings.
Extremely time-consuming and stressful.
Potential for critical legal and financial mistakes.
Consider the potential net loss on a home valued at $500,000:
With an Agent | For Sale By Owner (FSBO) | |
Sale Price | $500,000 | $445,000 (Typical FSBO Discount) |
Listing Fee | $13,600 | $0 |
Buyer's Agent Fee | $13,600 | $13,350 (3% of lower price) |
Total Fees | $27,200 | $13,350 |
Net Proceeds | $472,800 | $431,650 |
4. Sell Directly to a Cash Buyer or iBuyer
Best for: Sellers facing foreclosure, inheriting a dilapidated property, or needing to liquidate in the fastest way possible.
Wrong for: Any seller who wants to achieve fair market value.
Cash-buying companies, including iBuyers and "we buy houses" investors, offer a near-instant sale. They purchase your home directly, often within a week, and in its "as-is" condition. This eliminates realtor fees, repairs, and showings.
The trade-off is a dramatically reduced sale price. These companies build their business model on buying low—often at a 20-30% discount to market value—so they can make a profit upon resale.
Pros:
No realtor commissions.
Extremely fast closings.
No need for repairs, cleaning, or showings.
Cons:
You will receive a lowball offer far below market value.
Offers are typically non-negotiable.
The industry has some predatory players.
The financial sacrifice for this convenience is immense:
Traditional Sale | Cash Buyer Sale | |
Sale Price | $500,000 | $375,000 (25% Discount) |
Total Fees | $27,200 | $0 |
Net Proceeds | $472,800 | $375,000 |
The Bottom Line: What Is the Best Way to Save on Fees?
While negotiating is an option and FSBO or cash sales exist for niche situations, they all come with significant trade-offs—minimal savings, extreme risk, or a massive loss in equity.
For the vast majority of sellers, the most intelligent strategy is to partner with a modern brokerage.
At ContextRE, we provide the full-service, expert representation of a traditional luxury brokerage but with a pro-consumer fee structure designed for the modern world. We assist with precision, strategy, and zero excuses, ensuring you achieve a top-dollar sale while keeping thousands more of your hard-earned equity.
Stop overpaying for outdated real estate models. Schedule a no-commitment intro call to build your custom plan and see exactly how much you can save.
Frequently Asked Questions
Are realtor fees negotiable?
Yes, all commissions are technically negotiable. However, direct negotiation with traditional agents often yields minimal savings and can be uncomfortable. A better approach is to work with a brokerage like ContextRE that offers flexible, transparent fee structures from the start.
How much can you save with a flat-fee broker?
Savings can be substantial and increase with your home's value. On a $1.2 million home in San Francisco, a traditional 2.5% listing fee is $30,000. ContextRE's flat-fee options start as low as $4,500, potentially saving you over $25,000 while still providing full service from our expert team. You can see how we rank against other top San Francisco real estate agents.
What is the lowest commission a realtor will take?
Some discount services advertise 1% fees, but this often comes with severely limited support. Instead of focusing on the lowest number, focus on the best value. ContextRE customizes your plan to provide comprehensive, expert service at a fair price that maximizes your net proceeds.
How has the NAR settlement changed commissions?
The settlement has fundamentally changed commission conversations. While sellers may still choose to offer compensation to a buyer's agent, it is no longer mandated on the MLS [3]. This new landscape makes it more critical than ever to have a strategic expert guiding your sale and protecting your equity.