Flat Fee vs Full Service

Wondering what your options are in the real estate market if you are selling a house, and which of the decisions will benefit you most in the long run? Let's take a look at using a flat fee vs a full service brokerage for the sale of your home.

Flat Fee

People like flat fee services because they pay one fee, up front, in exchange for the most powerful real estate marketing tool of all, placement on an MLS. The fee can be anywhere from $300 to $1000, depending on the brokerage, but is almost always less expensive than paying for a full service agent to sell your house for you.

Of course, that flat fee means every other detail of the transaction is up to you, and this can eat away a lot of your time. You have to arrange showings with buyers and their agents, you have to shoulder any costs and details of additional advertising, you are responsible for negotiations and closing. And, of course, you don't have the ear of an experienced agent to bounce things off of.

Full Service

With full service, on the other hand, you have that practiced ear. You agree to pay a fee which gives you full access to that agent throughout the process, a fee which is only paid once the house is actually sold. Your home gets marketed using all the tools at the agent's disposal, including listings, word of mouth, print ads, open houses, lawn signs, and so on. There's a person there to arrange showings for you, explain contracts and terminology, provide ancillary services, and help you with negotiations.

But then there is the cost of full service. Standard full service brokerages charge 6% commission on the sale of a home. That means for every $100,000 on the home sale, you are paying $6,000. If your house sells for $300,000, you are paying an incredible $18,000 to agents and brokerages.

Many people find that a bit tough to take, particularly considering that agents are doing the same work now as they did ten years ago (if not less thanks to the digital age) and being paid twice as much.

However, there are many people who prefer to forego the hassle of selling their homes on their own (and that hassle may include legalities after the sale) and pay a brokerage for full service. The choice really comes down to time vs money. If you want to save money, go for flat fee services. If you want to save time, pay the commission to a full service brokerage.