It pays to think outside the box. For instance, while many sellers hire traditional agents who charge traditional commissions, savvy homeowners opt for flat-fee real estate brokers to slash commissions almost in half.
If this alternative has piqued your interest, here’s everything you need to know about a flat-fee real estate agent:
What are flat-fee real estate brokers?
The majority of agents you’ll encounter work on a commission basis. More specifically, the seller’s and the buyer’s agent each get a 3% commission based on the property’s final asking price. You, as the seller, will shoulder both of these fees.
While the above-mentioned rate is the industry standard, it does make agent fees a moving target. If you get a higher offer, you might pay a bigger commission than you initially anticipated.
Enter flat-rate agents. As the term suggests, these professionals charge a one-time fee for doing the same work a commission-based agent does. This makes budgeting easier because you’re earmarking a fixed amount. More importantly, these agents can also save you quite a bit of money.
How do flat-fee real estate brokers decide how much to charge you? Some bill a fixed rate whether your property costs $300,000 or $3,000,000. Others collect a 1% commission based on the selling price. Hence, it’s important to clarify what an agent’s rate will be before you hire them.
Why would an agent charge a flat fee instead of a full commission?
Marketing a listing used to be an expensive and time-consuming task, which is why agents charged a hefty commission as compensation for their efforts. Today, however, online advertising allows you to generate more awareness in less time at a lower cost. By working smarter instead of not harder, a flat-fee real estate agent passes on savings to you.
Why should you hire a flat-fee real estate agent?
Savings aside, there are plenty of other reasons to choose flat-fee real estate brokers. These include:
More flexibility— When you sign with a traditional agent, you’ll also have to agree to certain terms and conditions. One of those might be exclusive representation, meaning you can’t list your property with any other realtor. If you’re unsatisfied with your current agent, you’ll have to mutually agree to terminate your contract first before working with a new one. Luckily, there are no such limitations with flat-fee real estate brokers; as long as you’ve paid the commission, you can approach other agents to boost your chances of selling your property.
End-to-end services— Just because you’re paying less commission doesn’t mean you’ll get fewer services. The best flat-fee real estate agents offers the same services you’ll get with a commission-based one, including listing your property, staging it, and creating a marketing campaign to attract buyers. What you won’t get, however, is a bloated commission that eats into your profits.
MLS listing— Hiring flat-fee real estate brokers also grants you access to a multiple listing service (MLS), an online database that realtors use to see available properties in a given area. What’s more, many major real estate websites — including Zillow, NextDoor, and Trulia — pull their listings from an MLS, which gives your home even more exposure to potential buyers.
Less commission, more profits— You can’t sell a house without shelling out some money. And we’re not just talking about agent commissions; you’ll also have to pay for home staging, closing costs, capital gains tax, and packing up and transporting your belongings. When you work with a flat-free agent, you maximize the profit you make, which in turn gives you more money to cover all the associated costs of putting your property on the market.
What else should I know about hiring a flat-fee real estate agent?
With so many perks to hiring a flat-rate agent, you’re likely eager to call up one right now. However, there are a few things you should consider before doing so:
You’re still paying the buying agent’s commission — Even if your agent will be charging a one-time fee, their counterpart on the buyer’s side will likely not. While you’ll be paying lower agent fees overall, it will not be zero. Here’s a sample computation to further illustrate this point:
One-time fees are not one-size-fits-all — A flat-rate will almost always be lower than a traditional commission, but it’s worth whipping out the calculator to verify this assumption. There may be instances where a 3% commission could end up being cheaper than a one-time fee of $3,995, in which case the former option makes more financial sense.
|ASKING PRICE||SELLER’S AGENT COMMISSION||BUYER’S AGENT COMMISSION||TOTAL COMMISSION PAID|
|$500K||starts at $3,995 (HouseKey flat rate)||$15,000(3%)||$18,995|
Ready to work with a flat-fee real estate agent?
With 500 homes sold and $100 million in career sales, the brokerage has helped sellers save a combined $1 million in agent commissions. For its excellent service, HouseKey Flat Fee Realty has received an Award of Excellence from the Greater Springfield Board of Realtors®, as well as media coverage from Ozarks FOX, KOZL 27, and KOLR 10.