One among my goals for 2025 is to simplify life by promoting a rental property. A key choice on this course of is whether or not to rent a top-tier actual property agent, who expenses a better fee, or go for a mean agent to save lots of on prices.
By “top-tier actual property agent,” I’m referring to an agent within the high 10% of gross sales quantity or transaction numbers inside their native market. These brokers are sometimes a part of the High Agent Community (TAN), bringing extra expertise and intensive connections to the desk in comparison with a mean agent who isn’t within the high 10%. It’s nothing private.
It is a frequent dilemma for a lot of owners. To start out, I’ll share my scenario. Then, I’ll wrap up the put up by outlining the professionals and cons of every possibility to assist all of us make a extra knowledgeable choice.
The Backstory: Why I Waited to Promote
I’ve held onto this property, as a substitute of promoting it after I vacated it in October 2023, partly as a result of I’m bullish on the San Francisco actual property market, one of many cheapest international cities on the planet. The resurgence in tech shares and the speedy progress of AI make me optimistic about demand.
Additional, there are an incredible variety of native financial catalysts on the west side of San Francisco. Like shares, the longer you’ll be able to personal your property, usually the extra worthwhile. Producing semi-passive earnings is a precedence for me given I don’t wish to work a day job.
However I additionally waited for an additional motive: the Nationwide Affiliation of Realtors (NAR) price-fixing settlement, which I anticipated would result in decrease actual property fee charges.
True to kind, fee charges have began to say no—from the usual 5% to 4% in more cases. As a vendor, that is excellent news, nevertheless it provides a layer of complexity to my choice.
How rather more is a top-tier agent actually price in comparison with one charging a decrease fee?
The Distinction In Actual Property Fee Is About 1%
Based mostly on all my interviews, top-producing actual property brokers usually purpose to take care of a 5% fee charge—2.5% for themselves and a couple of.5% for the customer’s agent. In distinction, common brokers are extra prepared to cost a 4% fee to win enterprise, taking dwelling between 2% and a couple of.5% themselves.
After the NAR settlement, what the vendor pays the customer’s agent is now extremely variable, ranging anyplace from 0% to 2.5%, relying on the supply the customer’s agent presents. This shift makes it important for the customer’s agent and their shopper to have a transparent understanding of the customer’s agent compensation earlier than working collectively, as no agent will work without spending a dime.
Is paying an additional 1% fee to a high agent price it? To place this into perspective, right here’s a breakdown of the further value of going with a top-tier agent (or financial savings if going with a mid-tier agent) by property worth:
- 1% of $500,000: $5,000
- 1% of $750,000: $7,500
- 1% of $1,000,000: $10,000
- 1% of $1,500,000: $15,000
- 1% of $2,000,000: $20,000
- 1% of $2,500,000: $25,000
- 1% of $3,000,000: $30,000
- 1% of $3,500,000: $35,000
- 1% of $4,000,000: $40,000
- 1% of $4,500,000: $45,000
- 1% of $5,000,000: $50,000
As property costs rise, so do the stakes. The upper the property worth, the better the monetary impression of that 1% fee distinction.
My preliminary response to seeing these larger fee prices is reluctance—I merely don’t wish to pay them. Let’s discover a number of the the reason why.
Know-how Has Revolutionized Property Discovery
Earlier than the rise of the web and platforms like Redfin, Zillow, and different property web sites, discovering properties to buy was a time-consuming course of. At this time, practically everybody begins their property search on-line, exploring neighborhoods and houses from the consolation of their gadgets.
For sellers, a reliable actual property agent ensures their property is well-presented on-line by importing high-quality photographs, detailed descriptions, and all obligatory disclosures for potential patrons to overview.
Personally, I’ve found all of my properties both on-line or just by strolling by way of neighborhoods and inquiring. Because of this, the worth of an actual property agent’s function in advertising and marketing a property or serving to patrons discover one has diminished considerably. Customers now have the instruments to deal with a lot of the method themselves.
Know-how Simplifies Submitting and Reviewing Affords
Individuals who have by no means purchased or bought actual property earlier than would possibly really feel intimidated by the transaction course of. Nonetheless, with instruments like DocuSign and different digital platforms, submitting offers is now a breeze.
After the phrases are finalized, it takes lower than 5 minutes for you or your actual property agent to ship a suggestion electronically and get the pages signed. As a vendor, you may as well overview and signal such paperwork straight out of your cellphone or laptop computer, or counteroffer with minimal problem.
A reliable actual property agent ensures that every one obligatory paperwork and disclosures are ready for patrons to overview. They’ll additionally confirm compliance with native ordinances to make sure a easy sale. Whereas these paperwork are largely standardized throughout listings, the satan is within the particulars. And a talented agent will take note of the nuances that matter most.
Promoting A Property Ought to Be Simpler At this time If Correctly Marketed
Due to the effectivity of recent expertise, a well-listed property ought to promote for regardless of the market dictates. Consumers now have immediate entry to all related data, making the method sooner and extra clear than ever.
Sure, some high actual property brokers have entry to coveted off-market properties they solely share with different high brokers or folks they like. Nonetheless, it is unsure whether or not selling a property off market will command a premium or low cost. It is a case-by-case foundation.
This leads us to the subsequent key monetary query: How rather more worth can a top-tier actual property agent ship in comparison with a mean agent? Is a top-tier agent higher at negotiating and producing demand to safe the best doable worth in your property? That’s definitely the hope.
The last word comparability comes right down to estimating the added worth a top-tier agent can present versus the upper fee they cost.
Sadly, it’s inconceivable to check promoting the identical property concurrently with two completely different brokers. Nonetheless, we will look at numerous components and concerns that may affect your choice.
The Case for a High-Tier Agent at a 5% Fee
Whereas saving on fee is essential, listed below are some further components to weigh:
1) Increased Gross sales Worth Potential
High-tier brokers usually have a confirmed observe document of promoting houses at or above market worth. They usually come geared up with superior negotiation expertise, market information, and a community of connections that may drive aggressive presents. As an example, if your property is price $1 million, even a 2-3% larger promoting worth may offset the additional 1% fee payment.
Instance: A top-tier agent would possibly promote your property for $1.03 million, whereas a mid-tier agent sells it for $1 million. That $30,000 premium greater than covers the $10,000 distinction in fee charges.
Even should you promote at a disappointing worth, you would possibly relaxation simpler realizing that you simply employed one of the best agent doable to get you the absolute best worth on the time. A mid-tier agent would unlikely have accomplished higher.
2) Agent Responsiveness and Effort
A hardworking and responsive agent could make the promoting expertise significantly better. Paying a better fee could also be price it in case your agent is hustling for you, addressing considerations promptly, and dealing more durable than somebody who takes days to reply.
3) Better Peace of Thoughts That All the things Will Be Dealt with Correctly
Promoting a house is worrying, particularly should you’re juggling work, household, or different commitments. High-tier brokers usually have devoted groups or assistants who deal with the main points—from staging consultations to scheduling showings—permitting you to focus in your priorities.
In case you worth comfort, you’ll be able to hand over the keys and belief them to handle every little thing. I’ve met loads of competent brokers who promote properties even when their purchasers are touring abroad.
4) Business Popularity
High-tier brokers are inclined to have higher connections and are well-regarded locally. Promoting is a relationship-driven enterprise, and patrons’ brokers might belief a revered agent extra, growing the perceived worth of your property.
5) Information and Savvy
Working with a educated and skilled agent is a pleasure in comparison with coping with somebody much less competent. They’ll anticipate potential points and supply strategic recommendation. Such recommendation might be price greater than the additional 0.5% – 1% in fee they cost in comparison with a mid-tier actual property agent.
6) Service High quality Issues Extra as You Develop Older and Wealthier
As we age, paying for premium service turns into extra interesting. Consider it like paying for Apple merchandise: you pay a premium for ease of use, reliability, and glorious help. It’s comforting to know you’ll be able to simply go to the Apple Retailer to get your machine mounted. Equally, you might be prepared to pay further for an actual property agent who can ship a seamless expertise.
7) Experience in Robust Markets
In a gradual or declining market, a top-tier agent’s expertise may be invaluable. They’re higher geared up to navigate pricing methods, purchaser objections, and market dynamics to make sure your property doesn’t languish unsold.
The San Francisco market is heating up, partly due to huge tech wealth that has been created and the rise in return to workplace. Subsequently, it must be simpler to promote in such a market in comparison with when tech was falling aside in 2022 and extra folks had been working from dwelling.
Cons Of Hiring A Extra Costly Actual Property Agent
After every little thing I’ve written, hiring a top-tier agent for five% would possibly now sound like the popular alternative. However wait, there are some cons to contemplate as effectively.
1) Increased Price
The plain draw back is the 5% fee charge. On a $3 million dwelling, that’s $150,000 in comparison with $120,000 with a 4% charge. If the agent doesn’t ship a better gross sales worth or sooner sale, you’ll find yourself paying $30,000 extra for a similar outcome.
Like with most transaction prices, due to the web, they need to come down. In case you nonetheless find yourself paying a 5% fee charge to promote your property, regardless of expertise and the Nationwide Affiliation of Realtors worth fixing ruling, you would possibly perpetually really feel unhealthy in your choice.
2) Potential for Overpromising And Underdelivering
Some top-tier brokers rely closely on their popularity to safe listings however might overpromise on what they’ll ship. They may quote an unrealistically excessive sale worth to win your online business—very like a general contractor might offer the lowest bid to safe a mission. When you’ve signed with the agent, you’re locked into the itemizing settlement for its period and have to consider sunk prices.
To keep away from this, all the time confirm their current efficiency, not simply their historic popularity. A real top-tier agent will underpromise and overdeliver. The problem for these brokers, nevertheless, is discovering the stability—underpromising an excessive amount of dangers dropping enterprise altogether.
3) Much less Private Consideration
If the agent is managing a number of high-profile listings, you would possibly end up competing for his or her time and a focus. They could not even present up in your open homes, sending an affiliate you’ve by no means met as a substitute.
I’ve encountered loads of associates at open homes who couldn’t reply primary questions just like the lot dimension or when the roof or water heater was put in. This lack of expertise displays poorly on the property and may make patrons hesitant to submit a suggestion.
If the top-tier agent works with a group, it’s essential to satisfy all of the members who shall be concerned in promoting your property earlier than deciding to rent them.

Promoting a Residence Can Be Extremely Worrying
I bought a house in 2017, and it was one of the crucial worrying experiences of my life. You’ll be able to learn concerning the challenges I faced and why I sold. Regardless of utilizing a top-tier agent, the method was tough as a result of:
- It was my first sale.
- I had simply turn into a father in 2017.
- The home’s complete worth represented a good portion of my web price, about 40%.
Quick ahead to at present, issues are completely different. The home I’m contemplating promoting now represents lower than 15% of my web price. I’m a extra skilled vendor, having gone by way of 4 further actual property transactions since 2017. Additional, I am now not a sleep-deprived, anxious father.
With expertise comes readability. I really feel like paying further for a high agent in any case that’s occurred appears pointless. Then again, realizing {that a} extremely competent agent is in your nook may be extremely reassuring. I can afford to pay extra for peace of thoughts.
One other Purpose I’m Torn About Hiring a High-Tier Agent
Once I purchased this home, I made a decision to not use a purchaser’s agent. As a substitute, I worked directly with the listing agent, and we bonded over hours of dialog throughout the top of the pandemic. He is a pleasant and sincere particular person.
In the end, this itemizing agent advocated for the vendor to just accept my supply, although it was decrease than one other competing supply. My supply was clear, with a big 40% down fee. From the vendor’s perspective, my supply was additionally engaging as a result of it allowed them to keep away from paying a 2.5% fee to a purchaser’s agent.
For instance, if the property was listed at $1 million and the vendor agreed to pay a 5% fee ($50,000), my supply—although $25,000 much less—would nonetheless web the vendor the identical quantity. It’s because they wouldn’t owe a $25,000 fee to a purchaser’s agent. Plus, the decrease sale worth lowered the vendor’s capital positive aspects and switch taxes. It was a win-win, due to the dual-agent setup.
My Common Agent Has Some Shortcomings
Nonetheless, in the case of promoting the identical property, I’m uncertain about working with this agent once more. Whereas he is aware of the home effectively and helped save me cash throughout the buy, he has some shortcomings:
- He’s not a part of the High Agent Community, due to this fact, does not have the intensive connections
- He doesn’t specialize on this neighborhood, although he’s dealt with a number of transactions right here.
- He’s not significantly responsive and misses some particulars.
- I am undecided how nice of a negotiator he’s given I felt like I acquired a very good deal as a purchaser
I place a excessive worth on effort and communication, so his lack of an in depth recreation plan leaves me feeling unsure. That stated, he’s providing a 1% decrease fee to 4%, which is tempting.
Regardless of some shortcomings, which all of us have, I additionally really feel a way of loyalty since he fought for me as a purchaser and helped me safe this dwelling. Moreover, his familiarity with the property might be a possible benefit.
With these ideas in thoughts, let’s transfer on to discover the professionals and cons of hiring a mean agent who expenses a decrease fee charge.
The Case for a Mid-Tier Agent at a 4% Fee
1) Price Financial savings
A 4% fee can prevent a big sum of money. On a $2 million sale, that’s a $20,000 distinction in comparison with a 5% fee. For sellers with tight margins or who’ve already invested closely in repairs or upgrades, this financial savings may be essential.
2) Good Sufficient for Simple Gross sales
In case your property is in a sizzling market with frequent bidding wars, priced competitively, and doesn’t require intensive advertising and marketing or reworking, a mid-tier agent can get the job accomplished with out the additional bells and whistles. For instance, in fascinating neighborhoods the place houses promote rapidly, the agent’s community and advertising and marketing sources might matter much less.
3) Potential for Extra Personalised Service
Mid-tier brokers usually have fewer listings than their top-tier counterparts. This could translate to extra hands-on consideration and sooner communication.
4) You Are An Skilled Vendor Who Wants Much less Hand-Holding
In case you’ve been by way of a number of actual property transactions, you possible don’t want as a lot handholding or steering to promote your property. You’re already expert at crafting compelling real estate love letters, compiling detailed logs of dwelling enhancements with before-and-after photographs, and understanding the market dynamics in and out.
Moreover, when you have a sturdy community or a big platform to achieve potential patrons, hiring a mid-tier actual property agent or perhaps a actual property lawyer for a flat payment is likely to be enough.
Cons Of Hiring A Much less Costly Mid-Tier Actual Property Agent
1) Decrease Gross sales Worth Potential
A mid-tier agent might lack the negotiation expertise, market information, or community to safe top-dollar presents. In the event that they promote your property for $980,000 as a substitute of $1 million, the $20,000 shortfall far outweighs the $10,000 fee financial savings.
I wouldn’t rent a mean agent who lives out of city and hasn’t accomplished any transactions within the neighborhood earlier than.
2) Restricted Advertising Price range
A 4% fee leaves much less room for strong advertising and marketing efforts. This might imply fewer skilled photographs, restricted on-line publicity, or much less aggressive promoting, all of which may have an effect on the ultimate sale worth.
3) Danger of Longer Time on Market
If the agent isn’t as proactive or efficient in attracting patrons, your property may sit in the marketplace longer. This not solely delays your plans however will possible additionally result in worth reductions. Having an agent worth your correctly appropriately from the get-go is essential to stop a stale fish itemizing.
4) Fewer Assets
Mid-tier brokers usually function as solo practitioners with no help group. This might imply delays in scheduling showings, dealing with paperwork, or addressing purchaser inquiries. That fairly custom-made web site you need will not be accessible.
Dialog With Mike Ketchmark, Trial Legal professional for the Worth-Fixing Go well with
Last Components to Contemplate When Deciding Who to Rent
We’ve lined many points to assist determine which kind of actual property agent to rent. Listed here are three closing components to weigh earlier than making your choice:
Your Timeline
If it’s essential promote rapidly because of private or monetary causes, a top-tier agent with a powerful community and intensive sources can expedite the method. If time isn’t a urgent issue, a mid-tier agent would possibly obtain related outcomes at a decrease value.
In my case, I don’t must promote rapidly. My mortgage charge is locked in at 2.125%, and my 7/1 ARM doesn’t reset till mid-2027. If the property doesn’t promote for an inexpensive worth, I’ll search for tenants throughout the strong summer time rental season. I am assured I can lease out the home at a better charge to a steady tenant for extra semi-passive income.
Your Property’s Situation
Properties requiring vital repairs or staging usually profit from the experience and connections of a top-tier agent. They’re higher geared up to information you thru the method and make the property market-ready. A mid-tier agent might lack the identical degree of sources or expertise.
Luckily, my property is in pristine situation. I’ve meticulously maintained and up to date every little thing, with detailed data to again it up. It’s move-in prepared, which ought to make it simpler to promote since patrons usually favor avoiding lengthy remodeling projects. It’s nice situation as one of many the reason why we purchased the house.
Your Consolation with Danger
Are you prepared to take an opportunity on saving cash with a mean agent, realizing there’s a chance of a decrease gross sales worth or an extended time in the marketplace? Or do you worth the peace of thoughts that comes with hiring a confirmed top-tier skilled?
For me, the property’s complete worth (not simply the fairness) accounts for less than 15% of our net worth, so I’m much less burdened about maximizing each greenback. Plus, my stock-heavy retirement portfolio and the truth that I walked away from a a number of six-figure job in my 30s present I’m comfy taking calculated dangers.
Ideally suited State of affairs: Negotiate Your High-Tier Agent Down on Fee
The best answer is to rent a top-tier agent at a lowered fee charge. In at present’s market, 5% feels extreme. Intention to barter the speed right down to 4.5% at most, hanging a good compromise for either side.
One of the best ways to do that is by organising an incentive-based fee construction. The upper the value your agent can safe, the upper their fee charge. This aligns the pursuits of each the itemizing agent and the vendor. As the vendor, you’ll really feel higher about paying a better fee charge if it leads to a better sale worth.
If an agent is actually top-tier, they need to be open to a performance-based compensation construction.
Instance of an incentive-based pricing fee construction:
- $1,000,000 and underneath: 4%
- $1,100,000 – $1,200,000: 4.25%
- $1,201,000 and up: 4.5%
For a 0.5% premium, I’d possible select the top-tier agent, particularly since promoting a house is a worrying course of that most individuals don’t navigate usually. Plus, you’ll sleep higher realizing you took each step to organize and market your property successfully.
Nonetheless, if the fee distinction is 1% or extra, the additional payment doesn’t really feel justified. With standardized paperwork and the benefit of promoting by way of actual property web sites and the web, the worth of paying considerably extra diminishes.
In the end, it is essential to totally vet your choices. Interview a number of brokers, request references, and consider their current gross sales efficiency. Whether or not you select a top-tier or mid-tier agent, discovering the proper match in your wants will guarantee a smoother, extra profitable promoting expertise.
Readers, which kind of agent would you select to promote your property, and why? How has your expertise been with promoting by way of your agent? What did you recognize most about them, and what may have been higher? Lastly, what different components ought to potential sellers contemplate earlier than hiring an actual property agent?
Diversify Into Excessive-High quality Personal Actual Property
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Rent A High-Tier Actual Property Agent And Pay A Increased Fee is a Monetary Samurai unique put up. All rights reserved. Monetary Samurai started in 2009 and is likely one of the high independently-owned private finance sits at present. All the things is written based mostly off firsthand expertise. Be part of 60,000+ others reaching monetary freedom by subscribing to my free weekly newsletter.