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Brokers without the commission

You may have heard about flat fee brokers or discount real estate agents. Typically, a commissioned real estate agent will charge a fixed percentage of the actual sale price (typically 7%). If the listing agent sells the property himself, they (agent and his office) will take the full percentage. If another agent from a different company provides the buyer, then the percentage is split between both real estate companies. The seller pays the commission in either event.

A flat-fee broker charges a set price regardless of the final selling price. If the house does not sell within the listing contract period, then the fee is usually not paid. However, there are variations on this and the actual terms will depend on the company you are working with.

A commissioned real estate agent is motivated to get the best price for the seller because this results in the most money for them. Theoretically, a flat fee agent does not have that motivation. In fact, their only motivation is to consumate the sale-- whatever the price, higher or lower, their money will be the same.

Some flat fee brokers only provide certain services such as a listing in the MLS. They typically do not actually go to the property, have open houses, or do any other marketing.

If you use a flat fee broker and another commissioned agent brings in the buyer, a 3% commission may be payable to that agent's office.

A flat fee broker may also provide you with typical selling forms to use in the selling process. Flat fee brokers do not typically have open houses or do other marketing other than listing your property on their web site or listing it in the MLS. Make sure your flat-fee broker promises to put your listing on the appropriate MLS for your county or region. If a broker lists you on an out-of-area MLS, you’ll get very few responses from local buyers’ agents.

Many of the internet websites advertise companies that have a network of brokers that implement the programs on their behalf. Often, with just a litte more searching, the seller can find the actual Flat Fee Real Estate company and go direct. Usually you will get more specific answers to how the programs work in the home sellers specific state.

Some states have enacted legislation regulating the amount of service a real estate broker must provide a seller. This legislation has forced flat fee brokers in these states to put stricter controls on such things as the length of time they will list the property in the MLS. They also may charge more for consultations to the seller.

We are now beginning to see hybrid business models that have upfront flat-fee charges and then additional fees paid at the time of closing.

Some flat fee brokers will provide signage for the house and others do not. Flat fee brokers are an additional option for those house sellers wanting to do most of the selling themselves. This service provides the much needed exposure that FSBO options can not provide. Over 80% of all properties are sold through a local MLS listing.

Multiple Listing Service (MLS)

The Multiple Listing Service (MLS) is the Association of REALTOR®s computerized list of homes currently for sale. This is an exclusive tool, only available to REALTOR®s. The MLS is the primary tool used by REALTOR®s to find homes for their buyers, and for most REALTOR®s and buyers, it is the only tool they need to find the right home for them.

An MLS listing will include all the important information about your property and one photograph. You can upgrade your photo option by selecting a Virtual Tour option for about $200 extra that can include additional images.