FLAT FEE  REALTOR®  LISTINGS

a useful tool for FSBOs

Broadly speaking, a Multiple Listing Service (MLS) is any site that has many listings of real properties for sale.  However, real estate brokers and agents have established local MLSs through their associations to facilitate sales by making all broker's listings available to all other brokers to sell.  They then share the commissions earned.  Generally, half the commission goes to the listing broker, and half the commission goes to the selling broker at settlement.  Most states have several of the local MLSs within the state. 

At the present time, it is very hard for a person selling his/her own home or other property to get the quick exposure to prospects that thousands of real estate agents have.  Yet, the traditional fee for agents to sell your property is a percentage of the sales price of the property and is usually in the thousands of dollars. 

Over time, a hybrid has developed in which the owner does a lot of the work usually done by the seller's agent, and the listing agent charges a relatively low, flat fee up front instead of the usual larger listing agent's commission which is paid at settlement. 

That still leaves the buyer's agent who must be paid a commission, but it does cut the commission, usually in half.  Think of it, a few hundred dollars instead of a few thousand to get your "for sale by owner" property listed in the realtors' MLS.  Then, if an agent brings you a buyer, the buyer's side of the commission is typically half the usual full commission in your area.  That is generally 2% to 3% (half of 4% to 6%), and the percentage you pay is typically negotiable at the time you contract for your flat rate listing.  (However, keep in mind that it must be high enough to "get a selling agent's attention," or you're just wasting your listing fee.)

In addition, there is still the possibility of finding a buyer not represented by an agent and avoiding that commission, too.  Give the broker willing to accept a flat rate to list your property and put it in the local realtor MLS an "Exclusive Agency Listing."  That means any realtor who brings you a buyer is covered by the terms of the listing agreement, but you reserve the right to sell your property to a buyer you find yourself.  Then market the house yourself in all the ways a FSBO seller can, and if you find a buyer, you contract directly with that buyer for the sale of your property and owe no commission.

      Plus, there's more info on our site at Q & A.