Real estate agencies

1% Commission Realtors: How They Work and What to Watch For

What 1% commission realtors really offer, how they charge less, the tradeoffs, and how commission works after the 2024 NAR settlement.

1% Commission Realtors: How They Work and What to Watch For

If you are selling a home, the agent's fee is probably the single biggest cost of the transaction. That is why so many sellers start searching for 1% commission realtors and low-commission brokers before they even interview anyone. The pitch is simple. Pay a listing fee of around 1% instead of the more traditional 2.5% to 3%, and keep the difference for yourself.

The idea is real, and plenty of legitimate agents and brokerages offer it. But the fine print matters a lot. Below is a plain look at how these models work, why they can charge less, what you give up, and how to tell a good discount option from a bad one.

What a 1% Commission Realtor Actually Is

A "1% commission" agent charges you, the seller, a listing-side fee of roughly 1% of the sale price to represent you and market your home. On a $500,000 house, that is about $5,000 for the listing side, versus $12,500 to $15,000 at a traditional 2.5% to 3% rate.

This is only the listing side of the fee. It is the part paid to the agent who represents you. It does not automatically cover what a buyer's agent may be paid, and that distinction became much more important after the 2024 NAR settlement, which I will get to below.

You will see a few flavors of this. Some are true discount brokerages built around lower fees and higher volume. Some are traditional agents who quietly offer a reduced rate to win listings. Some are tech-forward companies that lean on software to cut costs. And some are "limited service" or flat-fee models that only put you on the MLS and leave the rest to you.

How They Can Charge Less

Lower fees are not automatically a gimmick. There are honest reasons a brokerage can run on 1%.

Volume is the big one. An agent who closes 40 or 50 homes a year can accept a smaller fee per deal and still earn a solid living. Efficiency is another. Teams that share transaction coordinators, photographers, and marketing staff spread those costs across many listings.

Technology helps too. Companies that automate scheduling, paperwork, and lead handling need fewer hours per sale. And in strong markets, homes sell faster with less hands-on effort, which makes a lower fee easier to absorb.

The point is that "cheaper" can be a smart business model. It does not have to mean worse. It just means you need to look at what you get for the money.

The Tradeoffs to Weigh

Here is where sellers get surprised. The fee is lower, but something is usually different about the service. Sometimes that is fine. Sometimes it costs you more than you saved.

Marketing. Ask exactly what is included. Professional photography, a floor plan, drone shots, a listing video, paid social promotion, and open houses all cost money. Some discount models include the full package. Others charge extra for each piece or skip them entirely.

Attention and availability. A high-volume agent may be excellent but stretched thin. You might work mostly with an assistant or a call center rather than the person whose name is on the sign. For a straightforward sale in a hot market, that can be perfectly fine. For a tricky property or a nervous first-time seller, hands-on guidance matters.

Pricing and negotiation. This is where an experienced agent earns the fee. Setting the right list price and negotiating well can move the final number by far more than 1% or 2%. A weak negotiator working for a low fee can easily cost you more than a strong one charging a bit more.

Limited-service gaps. Flat-fee MLS products can be a good deal for confident sellers, but you may be handling showings, disclosures, and negotiations yourself. Know what you are signing up for.

How Commission Works After the 2024 NAR Settlement

This is the part that has changed the math. As part of the National Association of Realtors settlement that took effect in 2024, offers of buyer-agent compensation can no longer be posted on the MLS, and buyers are now expected to sign a written agreement with their agent before touring homes.

In plain terms, the old assumption that the seller automatically pays both agents no longer holds. Commissions were always negotiable, but now that is out in the open.

So when you hear "1% commission," ask what it covers. Does your 1% only pay your listing agent? If a buyer's agent is involved, will that buyer ask you to cover some or all of their fee, often in the range of 2% to 3%? Or will the buyer pay their own agent directly?

Your total out-of-pocket cost is the listing fee plus whatever, if anything, you agree to contribute to the buyer's side. A 1% listing fee is genuine savings on your half. Just make sure you are comparing total cost to total cost, not a listing fee against a full traditional commission.

How to Vet a Low-Commission Agent

Treat this like hiring for any important job. The fee is one line item, not the whole decision.

Ask these questions and get the answers in writing:

• What exactly is included in the 1%, and what costs extra?
• Who will I actually work with day to day, and how fast do you respond?
• How do you handle buyer-agent compensation under the current rules?
• Can I see recent sales in my area, plus sale-to-list price ratios and days on market?
• What is your plan to price and market my specific home?

Then check the basics. Confirm the license, read recent third-party reviews, and talk to a past client or two. A good discount agent will answer all of this without flinching. If someone dodges the details or pressures you to sign fast, that tells you something.

For more on choosing and comparing agents, see our real estate guides.

The Practical Takeaway

1% commission realtors can save real money, but the fee is only half the story. Compare total cost after buyer-agent compensation, pin down exactly what service and marketing you get, and judge the agent on pricing and negotiation skill, not the discount alone. The right low-fee agent keeps money in your pocket. The wrong one quietly costs you more than they saved. Interview at least two or three before you decide.