Flat Fees for the Buyer

One of the goals of this website is to facilitate a better connection between buyers, sellers, brokers and agents who believe in the possibility of using the new world of real estate to better meet the needs of everyone involved in a transaction. We discuss options such as menu programs, buyer rebates, consulting, and other innovations in realty for the New Millennium.

One such innovation is the concept of the flat fee real estate service. While flat fee is being expanded on in regards to the real estate world, the most common definition is payment on behalf of the home seller to a broker in order to list their property on the broker's MLS. We've discussed why flat fee is of benefit to the seller in another article, now it's time to look at how flat fee real estate works for the other half of the transaction equation, the buyer.

It's important for buyers to understand a basic concept of marketing in order to understand the big benefits of a seller who uses the flat fee system. Basically, no matter what is being sold, the costs of advertising and other tactics will always be passed on to the buyer.

Real estate is no exception. Though most of the country is currently experiencing a buyer's market, buyers can't expect to avoid all of the hidden costs of traditional real estate transactions.

One of the biggest hidden costs is the commission paid to a realtor. This commission is usually around 6%, and as you can imagine that adds up to quite a lot of money spent by many sellers when the sale of their home is complete. In order to compensate, a seller will often include the dollar amount of the commission when negotiating the final price of a home.

If a seller has used a flat fee system, however, neither buyer nor seller has to worry about that extra 6% being built into the cost of the home. Instead, the seller has paid a much lower fee to have a piece of property placed on the MLS of a broker. The buyer then finds the home on their own, or with the assistance of a buyer's agent. The cost of the commission is cut considerably, and along with that the overall cost of the house for the buyer.