Considering a Flat-Fee Real Estate Agent? What You Need to Know
What Is a Flat-Fee Real Estate Broker?
We’re all used to a traditional real estate agent: they provide home sellers with comprehensive services to price, market and sell a home for around 3% commission. While 3% may not sound like much considering all they do, when you’re talking about a $350,000 home, for instance, that’s $10,500 that’s taken out of your profit. That doesn’t even cover the buyer’s real estate agent who requires an additional 3% for bringing a buyer to the table.
For many homeowners, forking over tens of thousands of dollars to sell their home is unimaginable. They are willing to pay something for the real estate help but are looking for something more reasonable.
Enter flat-fee real estate services. Flat-fee real estate brokers offer clients some or all of the services of a traditional real estate agent for a lower commission. Even though these agents make a percent or more less per transaction, they often have more volume of clients to make up the difference. It’s an option any home seller should consider if that 3% commission is too much to swallow.
What Are The Benefits of Using Flat-Fee Real Estate Services
You may be wondering why everyone doesn’t switch from a traditional real estate agent to a flat fee real estate agent. It comes down to what’s most important to you. If saving money is your number one goal, you may be willing to forego certain available real estate services. If you aren’t sure you can commit a lot of time into selling your own home, you may opt to pay an agent a certain price to do it for you.
Here are a few reasons why people choose a flat-fee real estate service:
Flat-fee real estate agents can save home sellers thousands of dollars and this is why they have become so popular. Shaving off even a percent from the commission can enable the homeowner to keep an additional $3,500 for a home selling for $350,000. Some flat-fee real estate services offer a flat rate upfront rather than a percentage-based commission. Rates vary widely and usually tied to how many services the flat rate real estate broker will offer.
The agent’s primary obligation is to represent the home seller in the home sale transaction. Some of the services they may or may not provide for this discounted rate are:
- Pricing the home
- Staging and photographing the property
- Putting the property on the MLS
- Providing a key lockbox and yard sign
- Marketing the home on various channels
- Scheduling and showing the home to prospective buyers
- Negotiating offers
- Scheduling and managing inspections and repairs
- Working up the contract
- Scheduling and attending the closing
While flat-fee real estate agents may not offer all of the above services, some homeowners find they can easily fill in the gaps themselves, even negotiating down the fee if they use fewer services. For instance, doing a quick online search for “how to stage a home” will generate hundreds of blogs and articles that offer tips and tricks of the trade. They may also be willing to show their own home to prospective buyers or allow the buyer’s agent to do so.
Another benefit of using a flat-fee real estate service is the homeowner is not locked into a long-term contract in most cases. Unlike a traditional real estate agent, flat-fee real estate brokers allow their clients to come and go as they see fit. If the home isn’t selling fast enough, there are personality clashes or the homeowner doesn’t feel like the agent is working in their best interest, for instance, they are not obligated to keep that agent.
With many flat-fee real estate brokers, the homeowner can pay for only the most basic services and do the rest themselves. Maybe the home seller only needs to hire a flat-fee real estate agent to gain access to the MLS to list the property. The MLS is a searchable database where the majority of all for-sale properties are listed. The only people who have access to the MLS are real estate agents and brokers. Everyone else must pay an agent or broker to give them access.
Related: How to Get the Most Out of Flat Fee MLS
In this case, the homeowner is deciding to sell their own home, a process called For Sale by Owner. The homeowner is the agent and can dedicate as much time as they want to sell their home, often faster than a flat-fee real estate agent can. Why? Because any real estate agent, traditional or flat-fee, has other clients to tend to and all of them are sharing a single agent. There’s only so much time in the day and if an agent is working on multiple properties at once, there’s a good chance they aren’t putting in as much time into your property as you would.
The MLS and Market Data
The MLS is critical in selling a property in most situations. Unless the property sells off-market, as when there are interested buyers who make an offer before the property goes into the MLS, there is no better place for a for-sale property to be discovered. Yes, you need to pay a licensed real estate broker or service to grant you access, but the price is more than accounted for with what the MLS does to market the property to the widest possible audience.
Related: Is the Cost to List on MLS Worth It?
Market data is another agent value-add but unlike the MLS, requires no special permission to access. While a home seller may be able to dig into the Internet to find their own market data to help price their home accurately, a flat-fee real estate agent will be able to provide accurate comps to save time.
How to Choose a Flat-Fee Real Estate Service
While saving money is the number one reason why home sellers choose a flat-fee real estate agent over a traditional agent, there are other benefits that come with it. Decide how much you are willing to pay to gain access to the MLS and go from there.
Understand that flat-fee real estate brokers are trying to make a living, too, and every service you think you may need should come at a price – a fair price, but a price, nonetheless. Compare different flat-fee real estate companies to see how much they charge for which services. Go through every service for which they charge and see if it’s something you think is worth paying for or if you have the knowledge and bandwidth to do it yourself. With flat-fee real estate services, you can pay only for the services you need.
Something to note: even if the flat-fee real estate service claims they offer certain services for a set price or a set percentage commission, you need to ask two important questions – how many clients are they currently working for and how much attention will the flat-fee real estate agent be able to dedicate to you? This is such an important differentiator. You may be attracted to a broker who says they can do XY and Z for $X, but if it’s going to take them months longer to get it done because they are so overwhelmed with other clients, it may be worth it to spend a few more dollars to get an agent who will commit more time to you.
The good news is your decision to use a flat-fee real estate agent isn’t set in stone. If for any reason it isn’t working for you, because you aren’t under contract, you can easily jump ship and hire a traditional real estate agent to take over. Many home sellers find great success using flat-fee real estate brokers. It’s worth it to give them a try before you fork over so much of your money at closing.
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