How Does a Flat Fee Listing Service Work?
Flat fee listing services typically come in a two different flavors:
- Those with an upfront fee (flat fee MLS), and
- Those with a flat fee paid at closing (only when it sells).
With flat fee listing services, the agent or company you’ve hired only charges you a flat fee commission. However, there are other commissions you’ll likely need to pay to buyers agents.
Let’s dig in to these two different models. But first, let’s explain how that buyer agent commission works.
Don’t Forget About Buyers Agents
Regardless of the type of flat fee listing service you choose, you’ll need to determine what to offer a buyers agent if they bring you a qualified buyer. You might not be willing to pay any commission, and that’s okay. But if you don’t offer it, you will not be able to list your home in the MLS.
The typical buyer agent commissions range from 2% to 3%. It’s best to factor that into your sale listing price, regardless of which flat fee listing model you choose.
Flat Fee MLS (Upfront) Model
A flat fee MLS service charges an upfront fee to list your home in the MLS for a period of time, regardless of whether the home sells or not. These types of services range anywhere from $99 to $799 depending on the number of services and features that come with it. The types of services that may, or may not, come with it include signage, lockboxes, photography, contract paperwork, and negotiation assistance.
Be sure you know what you’re signing up for with a flat fee mls listing service. If you’re confident your home will sell, and don’t mind putting in a little work, these are a great way to save thousands in commission fees.
Flat Fee at Closing Model
Real estate commissions are usually split between the listing agent and a buyer agent, and paid when the home sells. In a traditional 6% listing, 3% is paid to the listing agent, and 3% goes to a buyers agent. With a flat fee commission paid at closing, the 3% commission that goes to the listing agent is simply replaced with a flat fee.
Flat fee commissions charged at the closing can range anywhere from $2000 to $3500, while offering all the same services as the traditional 3% (out of 6%). REALTORs® are highly competitive these days, and use cutting-edge technology to increase efficiencies and pass these savings onto their clients (you).
What if a Buyer Agents Isn’t Involved?
If you choose a flat fee listing service to sell your home, be sure to ask your agent about the buyer agent commission. Is it still charged if a buyer agent isn’t involved? You should be able to negotiate the ability to waive that portion of the commission if you find the buyer on your own. Flat fee listing services are often utilized by previous for sale by owners, so this is a normal request.
Don’t Forget About Closing Costs
Commissions aren’t the only thing charged when you sell your home. There may be a handful of other fees involved. And one of those fees are and are the title company or attorney closing costs. The closing costs for home sellers are much less than what home buyers have to pay. They range from $300 to $700, and they are negotiable. You can shop and negotiate with title companies, just like you can with any other service in this industry.
Ready to Sell?
Whether you decide to use a flat fee MLS service or a traditional full service agent, we recommend one that utilizes a transaction coordinator. That way, you can be assured a smooth and seamless transaction – all the way from contract to close!