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Flat Fee vs. Commission Real Estate (In-Depth Comparison)

September 09 2018
by Leisl Bailey

FlatFee Vs Commission Real Estate


Picking the right real estate agent for you is one of the essential parts of the property transfer process.

Your agent is there for you to guide you through the entire process, from showings to closings and everything in between. He is there to answer any questions that you have and make sure you either get the best price for your home or the home you hope to purchase.

You might expect this kind of service to cost a lot of money. But it doesn’t have to.

It doesn’t have to be because there are two types of real estate agents. Those that charge a commission based on the sale of a property and those that charge a flat fee, no matter what the final sales price is.

In this guide, we will explain how both of these pricing structures work and which one is the best fit for you.

Who Pays the Real Estate Agent?

First things first: who pays the real estate agent?

The person selling the home pays the real estate agent. In traditional property transactions, the agent takes his cut from the overall sales price. This is called a commission.

However, as the average commission tends to clock in at 6%, commissions tend to cut deeply into the profits to be made from selling a home.

Good thing there is an alternative. Flat free real estate.

What is Flat Fee Real Estate?

A flat free real estate agent is an agent that charges a set fee for his services. It doesn’t matter how much the home eventually sells for – the amount the agent makes stays precisely the same.

For example, when you list with Clever, you only pay a flat fee of $3,000. If your home sells for over $350,000, you’ll wind up with a measly 1% fee. This is significantly cheaper than the current national average of 6% that other real estate agents charge for the sale of homes.

Think of it this way: your home is typically the most expensive thing that you own. It is your greatest asset. Why should you accept any less for it than you absolutely need to?

How is Flat Fee Real Estate Different that Commission Based Real Estate?

As mentioned, flat fee real estate saves the person selling his property money.

Sellers typically wind up paying the real estate agent a significant portion of the home equity. But the seller is the one that worked so hard to build up over the years. Using a flat fee realtor, however, the seller gets to put the money he would have paid in commission back into his own pocket after the sale closes.

Here are few examples to showcase just how drastic the difference in savings can actually be:

Let’s say you list your house for $204,000. With a traditional, commission-based real estate agent, the fee for listing and selling this property would be roughly $6,120. If you listed this exact same house with Clever, you would only have to pay $3,000.

That’s a savings of $3,120, from merely changing your choice of listing representation.

But the savings on flat fee vs. commission real estate don’t stop there!

The higher the final sales price for a home, the more money that listing with flat fee representation puts into your pocket – right away. That is, if you list your property to the tune of $4,000,000, a traditional, commission-based real estate agent can charge you over $120,000 for this sale.

With Clever, you would only pay $40,000. That’s a savings of $80,000 – just because you picked Clever to list your home.

Why Would You Choose Flat Fee Over Commission Real Estate?

Based on the previous examples, it is pretty clear why someone serious about getting the best sales price for their property would choose a flat fee listing service vs. a traditional commission-based real estate agency.

Why would you want to pay more for the exact same results: a successfully sold property and money in your pocket.

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Are there any Drawbacks to Listing with a Flat Fee Agency?

There are not any real cons for listing with a flat fee real estate agent, as most firms that offer the service are full service agencies with fully licensed Realtors keen to perform their best work for you.

By listing with a flat fee agency, you are not sacrificing the quality of the service or agent you will receive. Realtors that charge exorbitantly large commissions typically do not do better work for their clients that those who follow the flat fee structure.

Are you interested in getting the perks of a full service real estate agency for a flat fee? List with Clever today! Call us today at   1-833-2-CLEVER or fill out our online form to get started.