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What Will You Get When Paying a 2% Real Estate Commission to an Agent?

  • Jun 17, 2022
  • 2 percent listing
2 percent real estate commission

Have you ever been told by a friend about a 2% commission deal and how it’s different from a full commission agent? If not, in this article, we will be discussing what you will get by hiring a 2 percent real estate agent.

To sell a home; a huge chunk of money goes towards the agent commissions, making it a less profitable deal for sellers. With the median Texas home priced at more than $300,000, a seller can pay up to $18000 as commission alone, assuming the seller agreed to the average 6% commission rate.

This makes a 2 percent real estate commission more interesting and exciting. Though the thought of involving a 2% commission agent can tempt a lot of sellers, the downside of hiring a low-commission agent can be perilous. You may find some agents offering full service at low commission while others with limited services. This may put you at an edge where without an experienced and top agent by your side, you could struggle throughout the transaction or undersell the home.

In this article, we will guide you on how your decision to choose a low-commission agent can impact your home sale, why some agents agree to sell your home for a low fee, and how you can search for your top agent.

How a 2% real estate commission can impact your home sale?

Where hundreds and thousands of homes are sold every year in major cities of the U.S, an average of 5.85 – 6% commission fee is paid by the sellers to their agents on every transaction.  This commission fee can vary from region or city. 

It doesn’t mean the seller’s agent will put the entire 5-6% commission in his pocket alone. The seller’s agent usually splits 50% of the commission with the buyer’s agent for bringing the buyer to the sale. Further, both the agents will pay some cuts to the brokerage. In certain scenarios, the buyer’s agent rebate 50% of his earned commission to the buyer.

In a 2 percent real estate commission scenario, the listing agent will charge only 2% of the property’s sale price for selling your home. This 2% fee seems low than the nationwide average commission fee of 6%. But this doesn’t mean the buyer’s agent fee disappears even when a listing agent cuts down their commission rates.

2 percent real estate commission

However, the listing agent (seller’s agent) may inform you in the initial stage to also pay the buyer’s agent commission fee of 2-3%. This directly hits your savings on sale and shoots up your commission pay-out from 2% to somewhere between 4-5% in total.

Even after taking the accountability of the buyer’s agent fee, you still save a considerable amount of money on the sale of high-value property. The below chart shows how choosing a 2% real estate agent can Impact your total savings while selling a home:

Real Estate Agent Commission Rates

* Commission rates are estimates and we don’t guarantee the same rates for your home sale.

Why do Agents sell your home for just 2% commission?

An agent’s main goal is to attract more clients and close as many deals as possible. By offering a low commission fee, many experienced, new, or part-time agents try to lure more clients to sign a listing contract. In a competitive market, it is tough for new agents to make a successful sale without having great reviews or rich experience, so they’ll need to lower the commission when inventory is low and other agents are giving a tough time for the listing. 

Low commission deals are not limited to newcomers only, some experienced agents with great reviews also make it challenging by offering a 2% listing fee. Their Low commission fee, great experience, and fantastic client feedback become a deal-breaker to compete with. By contrast, an experienced agent will have sold enough homes by attracting more sellers for a 2% commission fee.

While there is a risk involved in hiring an in-experienced agent offering a 2% listing fee, Jay Thomas Real Estate Team is offering full service at a 2% fee, making it hard for other traditional companies to compete with their commission structure.

What Services You Will Get by Paying a 2% Commission to an Agent

A 2% real estate commission has become quite popular and expanded quickly as it helps the seller make a good profit from the deal. As the low commission structure sounds too good to be true, it totally depends on what service you expect from your agent.

Talk to your agent about what services he/she can offer you for a low commission fee and compare it with the services that sellers get paying the full-commission rate. Listen carefully to your agent and take a written note of the offered service. A full proof agreement is always the first thing you should go for before signing any contract.

Before you consider paying a 6% commission rate to a traditional agent for a Video tour, professional photography pictures, social media promotions, timely coordination, managing all paperwork, and so on, take a look at the list of Services offered by the Jay Thomas Real Estate Team at just a 2% real estate commission on the total sale value. The team:

  • Schedule showings, open houses, and Virtual tours.
  • Answers all calls, texts, emails, and queries on time.
  • List property on maximum MLS for more exposure.
  • Provide stunning professional photography & marketing materials.
  • Do perfect negotiation and provide professional assistance.
  • Take care of all legal documentation and formalities.

Whom You Should Go With - A Traditional Agent, Flat-fee Service, or a 2% Commission Agent?

Traditional Agent - A traditional agent will assist you with selling and buying your home at a standard fee of 6% commission. You get assistance from the initial phase till the closure of the transaction. But you can't ignore the fact that you have to pay a large amount of the sale price to the agent at the closing. So, if you want to save more from the sale, you can look at the other two options discussed below.

Flat-fee Service - You can ignore the commissioned agents and pay a flat fee for listing your property on different listing websites. The price structure of a flat fee starts at around $99, includes MLS listing, a few photos, and other basic services. You can pay a little more money to add more pictures or get a prominent place in the listing.

With all the good reasons to consider a flat fee service, there are downsides too. You won’t have a dedicated resource that will help you with legal documentation, negotiations, home tours, or marketing. You have to manage it all by yourself. So, you’ll have to decide if the flat fee service is for you or not.

2% Commission Agent - Unlike traditional and flat fee service agents, the 2% commission agent is getting quite popular. You’ll save a lot of money on selling your median or luxurious homes. While some agents may not offer you full service for a 2% commission, Jay Thomas is offering full service for a 2% fee while representing a seller.

Before hiring a 2% commission agent, make sure you know what your agent is offering you. Get the list of the services documented and signed after discussing it with your agent. 

If you prefer to save money while you sell, a 2% commission real estate agent is the right choice.

Contact us now at +1 832-889-5607 or drop an email at jay@buywithjaythomas.com. Search the best real estate agent near me and you’ll find us in the list of Top Agents.

Hello! I'm Jay Thomas, A REALTOR in Houston, Texas. Chances are you and I share a similar passion, Real Estate! I also have a passion for building businesses, working out, inspiring others, technology, sports, and people. Connect with me on Facebook and Instagram!

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