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What is a Flat-Fee Realtor?

Working with a flat-fee realtor to cut down the cost of agents’ commission presents a way to maximize profits on a home sale. Read on to find out what’s involved — and what’s at stake — before signing a contract with a flat-fee realtor.
What is a Flat-Fee Realtor?

Whether you're downsizing, upgrading, or relocating, as a homeowner you want to make as much money as possible when it's time to sell.

A full-service agent will take care of the heavy lifting involved in selling a home — including pricing the house competitively and promoting it to buyers. But their expertise also comes at the cost of a 5% to 6% commission fee paid out to the listing and buying agents.

Working with a flat-fee realtor will cut the commission fees, but it also leaves sellers responsible for more aspects of the sale.

It is possible to get the benefits of a full-service agent without paying a full commission price.

> [popup-modal text=“Contact Clever to learn more"] about how you can save up to 50% in commissions without sacrificing service.

In the meantime, take a moment to learn more about what a flat-fee realtor is and what you can expect when working with one.

What is a flat-fee realtor?

A flat-fee realtor offers a set list of services for a fixed cost. There are a few options available if you'd like to list with a flat-fee agent:

  • Flat-fee real estate brokerages that offer flat-fee listings and limited services.
  • Flat-fee agents who will list your home on a multiple listing service (MLS) and provide limited support.
  • Full-service, low-commission agents who work with a lead referral network and in exchange for a steady flow of clients, offer their full services for less.

In most cases, a flat-fee agent will list your home on an MLS and leave the other details of a sale — such as marketing and negotiating — to you. Other agents might agree to handle a few additional services for an added price.

What's the difference between a flat-fee realtor and a traditional agent?

The main difference between a flat-fee realtor and a traditional listing agent comes down to their costs and services. While both flat-fee and traditional realtors are licensed agents or brokers, their services — and prices — vary.

A full-service listing agent offers just that: a full list of services from the beginning to the end of the selling process.

The support starts before a home goes on the market. A full-service agent will help with staging a house and professionally photographing it to show off its best features.

With their expertise of local markets and trends, they'll create a compelling listing and set an asking price that appeals to potential buyers and maximizes profit for the seller.

They'll submit the home to MLS and manage its profile. During the selling process, they will advertise the home, hold open houses, oversee showings — basically everything it takes to find a potential buyer.

They represent the seller throughout negotiations and manage the paperwork until the final signatures appear on closing documentation.

Flat-fee agents (unless they're full service flat-fee agents) provide limited support based on the agreement made between the homeowner and the agent. They are paid upfront for their services while a traditional agent is paid at closing.

What is standard real estate commission?

While there is no official standard rate, real estate commission is typically about 5% to 6% of the home sale with half going to the listing agent and half to the buyer's agent. A homeowner who sells for $200,000 can expect to pay $12,000 in real estate commissions.

Real estate commissions for both the listing and buyer's agents are typically paid by the seller in addition to closing costs. Closing costs include the expenses of transferring the title, notarization, and related fees.

Can you negotiate real estate commission?

It is possible to negotiate a real estate commission. According to Zillow, one in three sellers negotiated with their agents before listing in 2018. Of those homeowners, 57% successfully changed some or all of their terms with the agent.

However, there is more at stake than the commission rate when negotiating with a realtor. In exchange for charging less, an agent will likely reduce the number of services they provide. It's also possible for a new realtor to lower their rate — while providing the same services — while building their business. You may be asked to make referrals on their behalf as part of the deal.

You can also try to bring down the total commission paid by working with the same agent to sell your old home and buy the new. If you go that route, and later decide not to buy, you may be in breach of that contract.

A note of caution for negotiations: Any discount you make will only apply to the listing agent's portion of the commission. A buyer's agent will be less likely to show your home if they won't receive a buyer's agent commission.

Should you choose a flat-fee realtor?

Deciding whether to work with a flat-fee realtor in lieu of a full-service agent comes down to your needs as a homeowner. If you have top-notch photography and marketing skills, or are skilled in contract negotiations, you may well be served by a flat-fee realtor who will oversee fewer of the details. Before signing with any flat-fee real estate agent or broker, ask exactly what services you'll be getting in exchange for their fee.

By comparison, if the thought of coordinating showings, creating Facebook ads, or managing offers gives you the hives, paying for the realtors' commission will be worth the expense.

You could also work with a Clever Partner Agent. The best of both worlds, Clever partners with agents who are top-rated and from major brands — like Century 21 or Keller Williams. They are experts in their local markets and provide all of the services, like a traditional agent, every step of the way.

The only difference is that they have agreed to work for a flat fee of $3,000, or 1% if your home sells for more than $350,000. That means instead of paying up to $12,000 in commission fees for a $200,000 home ($6,000 to your agent and $6,000 to the buyer's), you'll save $3,000 while still receiving the support and care of a full-service agent.

> Start interviewing top, local agents now.

FAQs About Flat-Fee Realtors

Can I put my house on the MLS without a realtor?

Only a licensed real estate broker can list a home on an MLS. Most MLS services are operated by local realtor associations or the National Association of Realtors. Before joining any of these organizations — or gaining full access to list on an MLS — a person must present a real estate license.

You can list a home on an MLS by partnering with a licensed broker or agent. Be sure the wording on the contract specifies you are paying a one-time flat fee for the listing and you are not entering into an agreement that will require you to pay out a commission upon selling your home.

If you go this route, you will also be responsible for writing your own listing to draw the attention of prospective buyers in your market and at the right price. You will also be responsible for notifying the flat-fee agent of any changes to the home's listing — such as a price reduction or if an offer has been made — as per your agreement.

Do flat-fee MLS listings work?

The National Association of Realtors found that homes sold through MLS sold 20 days faster than those without. Flat-fee MLS listings work by exposing your home to agents in your local area as well as qualified buyers.

While other services — such as Zillow and Trulia — allow homeowners to list their homes without an agent, those sites are often frequented by casual lookers rather than serious buyers. Instead of paying a full commission to a realtor, you pay for the MLS listing and manage the rest of the details on your own.

However, it is important to remember you will still end up paying a 2-3% commission to the buyer's agent as well as closing costs.

It's also possible you may have to pay for some services out of pocket. You will be solely responsible for paying for advertising, photography, signage and other materials needed to promote a home sale.

You may also leave some money on the table during negotiations. According to the National Association of Realtors, the average home sold by a full-service realtor went for $265,500 while those sold without averaged $200,000.

Can real estate agents take less commission?

While it is possible for a realtor to take less of a commission, a real estate agent will need a good incentive for lowering their rates. Realtors are paid by their commissions and only after a deal closes.

A buyer's agent may show their customers dozens of homes before finding the perfect home. That takes a lot of time, research, and effort. Listing agents likewise invest a lot into a home sale before taking their payday. Besides listing the home and running showings, the agent uses their skills and connections to ensure the homeowner receives the best offer for their home.

Some agents will agree to work for a reduced commission, but you have to negotiate the lower rate yourself.

Clever has partnered with agents who have agreed to provide their full services for a flat rate. You can [popup-modal text="connect to Clever now for a no-obligation consultation”] to find out what's the best fit for you and how you can save 50% on commissions.


Andrew Schmeerbauch
Andrew Schmeerbauch

Andrew Schmeerbauch is the Director of Marketing at Clever Real Estate, the free online service that connects you top agents to save on commission. His focus is educating home buyers and sellers on navigating the complex world of real estate with confidence and ease. Andrew has worked on projects for the United Nations and USC and has a particular passion for investing and finance. Andrew's writing has been featured in Mashvisor, L&T, Ideal REI, and Rentometer.

See all Andrew's Posts

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