The housing market is changing. Is a low-fee real estate agent the way to go?

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5 days ago

When Jonny Ballesteros and his fiancée, Jen, began house-hunting, they weren't sure what to expect. It was the first purchase for the couple, who are both 29, and in the competitive San Diego-area market where they lived, they needed some hands-on guidance.
But the real estate agents they contacted were no help. They appeared to be too busy to offer the kind of service the couple wanted. They decided instead to work with a new company that offers flat-fee brokerage services for buyers.
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While the cost savings was helpful, Ballesteros also felt he and Jen got the support they needed: suggested homes that matched their criteria, viewing appointments, and online chats about everything from scheduling to questions about process.
"We truly needed that hand-holding because it was our first property,' Ballesteros told USA TODAY.
In an age when Americans do everything from writing their wills to ordering their groceries online and without a middleman, the residential real estate industry remains stubbornly entrenched in tradition. But one year after a landmark lawsuit changed the way commissions are negotiated, some upstarts think the time is finally right.
"The settlements haven't actually changed the transaction much yet," said Ben Bear, co-founder and CEO of TurboHome, the company that helped the Ballesteros. "But what it has done is educated buyers that hey, high commissions don't really make sense." At the same time, Bear said, new technology makes it possible for companies "to deliver a high level of service that does have a lot of personal touch, at a lower price point."
TurboHome, which has been around since 2022, is currently only available in California and Texas. Other companies offering similar services for buyers include ShopProp and Arrivva.
The longstanding approach to real estate transactions in America had a commission of roughly 5% to 6% paid by the seller and divided between the agents for the buyer and the seller – a hefty surcharge that some observers believe inflated home sale prices.
For the home that Johnny and Jen bought, which cost $679,000, the buyer's agent's commission traditionally could have been $20,000 or more. TurboHome's fee was less than half that – $7,500. And the seller agreed to pay it, so the couple paid nothing and was able to apply the money to their loan.
How the real estate commission lawsuits changed consumer attitudes
A report released in June by the left-leaning think tank Consumer Policy Center explained how the commission lawsuits have helped erode traditional arrangements.
'By focusing public attention on 5-6 percent commissions through news coverage, the changes persuaded some consumers to question traditional real estate brokerage services,' wrote Stephen Brobeck and Wendy Gilch.
More recently, they added, the industry jockeying between Zillow and other listings portals and brokerages has helped focus attention on how real estate information is displayed, which may persuade homeowners to sell their properties in non-traditional ways.
Douglas Miller is a long-time attorney and real estate industry gadfly who instigated the first of the commission lawsuits filed starting in 2019 against big brokerages and the National Association of Realtors, one of the largest professional lobby groups in the country. A recent analysis shows that commissions paid to real estate agents have barely budged over the past few years.
The new upstarts are not "discount brokers," he said.
'They are 'fair fee brokers,' I think is a better way to put it," Miller said in an interview. "The traditional agents want to label them as, 'You are using somebody who's charging less, you're going to get what you pay for.' I would say no, what you're going to get is an overpaid agent if you use a traditional agent.'
One of Miller's biggest bugaboos is that the vast majority of real estate agents do almost no deals on a regular basis. According to a 2024 analysis from Brobeck, half of all agents reported no or only one sale the previous year, while 70% did five or fewer. 'In terms of personnel, the residential real estate industry is clearly a part-time industry,' the report concluded.
As Miller sees it, the lower-cost companies that focus on transactions probably have more experience than many agents do.
The National Association of Realtors did not respond to a USA TODAY request for comment.
When does it make sense to work with a traditional real estate agent?
Lisa Gill, an analyst with Consumer Reports, thinks that there are advantages to working with traditional agents.
"Real estate is still very much a relationship business," she said. "Particularly in very competitive markets, it can benefit both buyers and sellers to have a representative who's tapped into a network of agents."
TurboHome's Bear agrees. There are plenty of types of transactions where a buyer or seller may want the kind of high-touch experience Gill describes.
But there are also other advantages to companies like TurboHome, which doesn't require that clients be exclusive to them. That means that if another real estate agent is able to find a property, there's no penalty for walking away and choosing to be represented by that agent.
Gill also notes that experienced professionals can bring wisdom and context that go beyond the checklist of transactions involved in a sale. Working without a traditional agent might be akin to 'building a house without hiring a general contractor,' she said. It's likely that many sales can be done without that expertise, but on the rare occasion that things do go wrong it may wind up costing more in time and money to fix.
Still, evidence is mounting that for many Americans, the 'bare-bones' approach works perfectly well. Miller, a practicing lawyer, is also a licensed Realtor who facilitates dozens of sales every year, making him one of the Realtor Association's top producers in Minnesota, he says. He charges half the amount a traditional agent would – 1.5% of the transaction or less – on the home's sale price or list price, whichever is cheaper, to avoid the perceived conflict of interest that comes from a sale price being bid up.
The 2025 Consumer Policy Center report, meanwhile, focuses on the seller experience, evaluating companies Ideal Agent, Houwzer, Trelora, Simple Showing, and 1% Lists, with a special nod for one called Clever, which had more –and more-experienced – agents on its staff.
While consumers using those companies need to do a little extra research, the report says, including being absolutely sure which specific services are offered and evaluating the individual agent that will be involved in the transaction, they conclude that 'low fee brokers do represent a viable alternative for home sellers.'
Read next: Should you sell your own home? Why a FSBO may look more tempting
This article originally appeared on USA TODAY: Housing market is changing. Is a low-fee real estate agent the answer?