What Is Flat Fee Real Estate and How Does It Work?

5.34 million existing homes in the U.S. were sold in 2018. Add in 667,000 new construction residences for a picture of total real estate sales.  Each one of those completed sales probably involved an agent or two.

Agent commissions in 2019 remain stuck at 6%, the same as since the mid-1950s. This is despite the internet and automation fundamentally changing the way that real estate agents do business.  What exactly do agents do to deserve 6% of the sales price?

Flat fee real estate listings turn the fee structure around to favor buyers and sellers, not agents. But do they mean less service or slower sales?  Learn more ahead.

Who Says That Real Estate Commissions are 6%

You can skip commissions on the purchase or sale of your home. There are no laws restricting transactions in most states. In fact, the use of the Multiple Listing Service (in most states) isn’t restricted to Realtors only.

What’s the difference between real estate agents and Realtors? Membership in a professional association. Anyone who passes their state’s licensing requirements can be a real estate agent. Not all agents can use the term Realtor. Realtors must have membership in the National Association of Realtors.

If you take on tasks associated with selling your home, you can save yourself the commissions!

What Do Real Estate Agents Do for 6% of the Sales Price?

The national average for real estate commissions is around 3% of the sales price to the agent listing the house plus 3% to the agent who represents the buyer.

An agent earns their commission through:

  • Offering expert advice
  • Doing market research about the home price
  • Preparing and distributing marketing materials
  • Placing a sign on the property
  • Placing the property on the local MLS
  • Showing the home
  • Preparing or taking offers
  • Assisting in negotiations
  • Preparing the contract
  • Following through with vendors (inspection, escrow, etc.) to close the sale

If you undertake these functions, you can save the fees paid to an agent. This means you save thousands of dollars. The national median price for a single-family home sold is now $272,200. It’s much higher in major cities like Los Angeles, Austin, and Dallas!

Is For Sale By Owner the Right Choice?

As a seller, you do all the work on your own. The research to determine a home’s property value, for example. Then you market the house, attract a buyer and write a contract. Simple, right?

It sounds easy, but in a litigation-hungry market like California or Texas, the process can be daunting. Even setting a price is nerve-racking.

It’s too easy to place a too-low value on your home and leave good money unclaimed. List a too-high price and your property will have a lengthy stay on the market. Attracting some potential buyers is another problem to solve.

You’re going to need marketing and an MLS listing. Most buyers now find prospective houses via internet searches.  Where do the popular search engines find homes for sale?  The local MLS. Almost no one wastes time and gas driving through neighborhoods to find Open House signs.

If you choose to sell on your own, you are the one responsible. You write an attractive and accurate house description, show the house, and negotiate any offers. You will also have to file all the required forms for disclosure.  Consult an attorney for expert advice to avoid problems.

Flat Fee Real Estate Listing Lets You Onto MLS

To get to an agent’s most used marketing tool, you need a way onto the MLS. A flat fee real estate listing-only service does that for you. MLS platforms are limited to members only (licensed real estate brokers and agents, usually, Realtors-only in some states.)

The local MLS (Multiple Listing Service) is the database of homes for sale, historical sales figures, days on market calculations and more. The MLS exposes your home for potential sale on thousands of real estate webpages.

With MLS listing-only service, a licensed real estate broker enters your data onto the proprietary platform. You provide the description, photos, and price. They enter your home onto the list. Your personal contact information is listed instead of their broker information.

In exchange, instead of a 3% commission to a listing agent, you pay a flat fee.  Multiply 3% by the median price of a home and you realize $8,160 in savings.  Offer 3% of the sales price to a buyer’s agent to attract buyers represented by an agent. Skip that and you leave many prospective buyers behind.

A “full-service” realtor writes your listing, helps you set your price, etc. The question is whether that service has earned the $10,000 or more paycheck.

Pay-As-You-Go or Ala-Carte Service

You can pay as little as $299 for MLS listing service. Watch out for visibility limiters like restrictions on the number of photos or truncated descriptions. Data-entry only listings tend to be “ala carte” and each individual task has its own cost.

This poses no difficulty if you can perform all of the work selling your home. Charges for additional photographs, price changes, listing open houses, telephone forwarding, etc. accumulate quickly.

1. Entry-Only Charges

If there is a problem with your listing, you face a fine from the MLS if the correction is not prompt. You will be charged for every change and data entry after the initial listing.

Your name and contact information are listed. That means that all calls and contacts go directly to your phone number. The brokerage provides no services.

MLS listing service depends on a cooperating agent. The agent is then responsible for placing your entry into the correct geographical MLS. There might be several MLS, each with specific neighborhoods. Make sure you have the correct area.

Stay on top of any status changes and follow up with your cooperating agent to ensure prompt updates. There are fees and fines if the status updates are not current.


  • Is the listing broker experienced?
  • How many transactions do they enter per week?
  • How many days do listings spend on the MLS?
  • Are the cooperating agents local?
  • How many status changes do they process per listing?
  • Is help available and prompt?

For best results, look for a MLS listing service with a good reputation.

2. Marketing Expenses

Photos and descriptions add interest to your MLS entry. Attract prospective buyers with professional work. The local MLS dictates the number of photos required or allowed. There may be a minimum or maximum. Descriptions also have length limits.

You don’t have to provide professional photographs, although they do help. Look for clear, well-lit photos of each room. Shoot day and evening exterior photos including gardens, water features or other amenities. Photographs are key to attracting potential buyers.

No need to stage your home, although it may help sell your home faster in some markets. Instead, walk through your home and remove clutter, sweep surfaces clean and turn on every light. Remove personal items from camera view. Use photos that focus on desirable features of your home.

Don’t use too dark, unfocused or poorly framed shots. They make your home look like you are hiding something or something is wrong. Take shots with a high-quality camera and lighting equipment.

3. Hire a Writer, If Needed

Pictures bring people to your listing. Make your descriptive copy interesting, too. Use benefits to describe your home. A bathroom is a feature. “Plenty of room for a relaxing soak in the oversized tub while watching the trees sway” lets buyers appreciate a benefit.

Descriptions need to be truthful and positive, while still attracting people willing to pay full-price. Feature the new patio, granite counters, or brand new water purification system.  Avoid words that bargain hunting vultures love, like  “as-is” “recently repaired” or “motivated seller”.

4.  Set the Price

There are two prices to research and consider. What you ask for your home and what the market will bear.  A too-high asking price and your home spends days or weeks on the market until you relent and reduce the price.

Assign a too-low listing price and you have no room for negotiation. A full price offer may still be beneath market expectations. To make an informed guess on price, you need to act like an agent.

Take a look at other recently sold homes with the similar attributes as your home. The location, condition, age, quality of construction, etc. make a difference. Look closely at comp homes.

It’s easy to compare houses from similar neighborhoods, but look out for homes that are completely different, even if they are just a short distance apart. A major street or railway tracks can make all the difference.

Use a six-month collection of data in your area to set the price.  Add and subtract features to get a reasonable price range. For example, the school district or number of bathrooms affects value.

If comps show 3 bedroom/2 bathroom houses are selling and you only have one bath, then you adjust the market value downwards by the one bathroom. The number of bedrooms works the same way. Special features such as a corner lot, a pool or certain school districts make a difference.

5. Show Your House

With luck and proper pricing, your marketing efforts should see plenty of interest. All inquiries come straight to you, so you vet prospective buyers and show the house.

Again, think like an agent:

  • Qualify prospective buyers before they enter your home
  • Keep your home show and sell ready
  • Consider curb appeal
  • Clean and declutter the front walk and entryway
  • Touch up the landscaping.
  • Clean and declutter the interior
  • Remove fingerprints and footprints

Expect visitors on a moment’s notice. To be safe, try not to be alone in the house while showing.

Consider letting buyer’s agents show the house without your presence. Also:

  • Lock up valuables
  • Remove private materials
  • Secure prescription drugs, jewelry or art
  • Remove pets

Take precautions with yourself and with your possessions.

6. Negotiate Offers and Close the Sale

Even though offers and contracts do not pass through your flat fee listing agent,  you need to keep them informed.  You must update the listing within 24 hours of a change in status. If you are fined for missing a status change, you are responsible.

You prepare the purchase agreement and negotiate with your buyer’s agent or with the buyer if they have no agent. Offers contain more information than the amount the buyer is willing to pay.

In many states, the written offer is a draft purchase agreement. It includes things like:

  • A valid time period for the offer
  • An amount of earnest money for the seller to consider the offer
  • Address and legal description of the property
  • The amount offered
  • Items to be included or excluded in the sale, such as appliances, window coverings, etc.
  • Terms for inspections and contingencies
  • Escrow instructions
  • Penalties and damages for breach of contract
  • Terms for paying taxes fees and commissions through closing

Have the contract documents reviewed by a real estate professional or an attorney.  If you wish to present a counteroffer, download the required disclosures and contract templates from your state office or obtain them from your real estate professional.

Counter Offer Your Terms

You can counteroffer if you don’t like the terms of the buyer’s offer. This negotiation can go back and forth several times. You might want more money or a longer escrow, for example. You do not need to write a whole new purchase contract each time.

For minor negotiations, a simple update to the relevant clause on the original purchase contract is sufficient. Just have both parties initial the change. More extensive changes can be addressed through an addendum.

Contract Preparation and Title

FSBO also means that you are responsible for the preparation of the documents. You choose a title company, who provides the deed transfer. These tasks may be priced individually or bundled by some flat fee MLS real estate listing services.

Bluematch Offers a Better Flat Fee Alternative

When you don’t need a full-service, full-commission listing and the stripped-down listing-only service isn’t enough, there’s the Bluematch commission-free alternative.

Our flat fee real estate service offers you a MLS listing, help with showing requests, your document preparation, and a legal compliance check. We use data and technology to reduce the cost of selling your home.

Ready to list your home now? Contact us today!

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