The Problem With the Flat Fee Broker Concept
The flat fee broker represents a low cost option for sellers wishing to make their homes available to Realtors by utilizing the Multiple Listing Service. They can save on real estate commissions by taking on much of the work involved in marketing the home. The "flat fee broker" is often referred to as a "fee for service broker" that charges an up front fee to let a For Sale by Owner access the multiple listing service. It looks good on paper, but usually doesn't pan out in practice. The fee for service broker provides no services for the fee other than data entry on the MLS. The seller is responsible for all other aspects of the listing and sale process. Unless the seller is experienced, like an attorney or retired real estate agent, it is difficult for them to provide the quality of marketing that their competition will have.
The flat fee broker makes his money on the front end by entering data, not
selling a house. Also, other services, such as enhancements to the listing,
signs, lock boxes, flyers, photography, call forwarding, document preparation,
buyer's agent's commission, etc. are typically sold individually, even those
services that are required by law! Another disadvantage to the program is the
amount of commission paid to the buyer's agent is often higher than average.
Many times the buyer's agent has to act in both capacities, as a selling agent
and a listing agent, because under the fee for service model the seller is
normally representing themselves. The higher commission helps to entice agents
to show the property.
Below is a comparison between the typical flat fee, also known as a fee
for service, program and Berkshire Real Estate's Seller Assistance Program +
|Service||Flat - Fee
|Listing Fee||$ 400
||Six month listing
with unrestricted amount of photos
|Buyers Agent Commission
||Based on the most common
rates per listing type
|Commission at Closing
||We only get paid when you do|
|Document Prep Fee||$ 200||$
||Assumes 4 documents total|
|Signs, lock box, flyer holder, etc.||$ 100||$ 0||Important essentials|
|Photography costs||$ 100||$ 0||Our Selling Tips page instructs you on how to take quality photographs|
The illustration above assumes a $150,000 sale price and a buyer's agent selling the property. Not included in the analysis is the seller's costs for the time invested in the process or other incidental costs with the flat fee option. Berkshire Real Estate's program is full service once the listing hits the MLS, so we spend the time instead of you.
Our FSBO programs offer great savings with none of the pitfalls of flat fee or fee for service. With us, you get great service and an experienced agent at a comparable cost.
Prefer full service? We have great discount commission options that can save sellers thousands of dollars on real estate commissions and fees without sacrificing service or market
exposure. For more information on Berkshire Real Estate's full service discount
brokerage services visit our page, Discount Programs.
Discount commissions for sellers.
Cash rebates for buyers.