How do commissions usually work? How is a flat fee different?
“In residential home sales, the real estate commissions paid by the seller are typically 6% of the sale price of the property. The buyer and seller are represented by real estate agents, and the 6% is split between the brokers that the agents work for. The agents receive a portion of the commission from their broker.
How flat fee real estate agents differ, is they list properties for a low, flat fee for their services while the buyer’s agent continues to receive the traditional commission percentage. It is important to note there are different levels of flat fee service! Some offer a full service experience while others are a la carte. At Flat Fee Redefined, we pride ourselves on offering full service and setting ourselves apart from other flat fee companies, hence “”Redefined””!”
What is not included in the flat fee with Flat Fee Redefined?
For sellers AND buyers, Flat Fee Redefined is a full service team.
For Sellers: We do everything from start to finish including meeting with the seller, conducting a comparative market analysis, hiring a professional photographer, listing the property on the MLS, promoting the property on social media, holding open houses if desired by the seller, assisting in negotiations from contract to close, attending closing and more!
For Buyers: We offer guidance on the home-buying process, send new listings as soon as they come on the MLS and do research on the properties, schedule and attend showings, assist in negotiations from contract to close, attend closing, and more!
How are you able to list homes at such a discounted rate?
Technology has transformed our industry and has made Realtors far more efficient! Because of the Internet, our industry now has the Multiple Listing System (MLS) which is a far more efficient way to enter and review listings. Email and electronic signing* have sped up the home search, as well as the contract and inspection negotiation process. Expensive marketing media like newspapers are a thing of the past and have been replaced with websites that feed from the MLS, plus we can use social media to promote listings! Flat fee is far more common in other countries and it is the belief of Flat Fee Redefined that flat fee is the way of the future for the Midwest as well just like other market disruptors (think Amazon, Uber and Netflix)!
Why wouldn’t I just use an MLS-only flat fee company, or list For Sale By Owner (FSBO)?
“Where do we begin…? Not all flat fee companies are created equally, and many require the seller to do the majority of the work. If a seller lists FSBO or with MLS-only flat fee companies, the seller has to handle all communication with the buyer’s agent including making appointments, letting the buyer and buyer’s agent in for showings, and negotiations from contract to close (including inspection and appraisal, both of which can get pretty hairy!). Because real estate transactions can be emotional and sellers understandably have a sentimental tie to their home, many buyer’s agents attempt to guide their buyers away from these listings because the emotions mean they are statistically more likely to result in a fallthrough.
Also, when listing FSBO, sellers often find that their phones ring constantly, but instead of being buyers many of the calls are real estate agents asking the seller for the opportunity to list their home. If a seller opts not to answer their phone because of these calls, that could result in the loss of a legitimate buyer (and with both FSBO and MLS-only companies, the seller has to do their own due diligence on screening potential buyers)!
With both FSBO and MLS-only companies, the seller has to provide their own signs, marketing remarks, and photography. Many sellers opt to take photos with their phones, and while some think that won’t impact their sales price, professional photography translates into more traffic to the home, which turns into interested buyers and competition. Competition can drive the sales price up and improve terms for sellers! Increasing the sales price is the goal of Flat Fee Redefined, so we provide signs and directionals, professional photography, and spend ample time writing marketing remarks based on information collected during the listing appointment. Listing FSBO also means less exposure so less showings and less competition. The National Association of Realtors found that homes sold by owner sell for an average of 27% less than homes listed on the MLS by real estate agents.”
Can I cut the percentage I pay to the Buyer’s Agent down from the traditional 3%?
Since sellers pay both their own listing agent and the buyer’s agent commissions (usually 3% in Missouri), many ask if they can reduce the commission they pay to the other agent. What many sellers don’t know is that an attempt to save a couple of thousand dollars could result in a loss of tens of thousands! Sellers should never cut the buyer’s agent commission because it will result in fewer showings. Fewer showings result in a longer time on market, and the days on market can create a stigma for the property. Most buyers will think there is something wrong with a home with longer days on market that they can’t see in photos. If the buyer decides to look past the time on market and is interested in the home, the buyer is likely to make a lower offer because of the extended time on market. Many times when our buyers send a home to us and say “Why isn’t this one selling?” upon further investigation we find out that lower commission is the culprit! In the end, the loss on sales price will always overshadow any gain from cutting commissions on the buyer’s agent side!
Will my home be listed on the Multiple Listing Service (MLS)?
Yes! From the MLS, the listing will feed to many third-party services such as Zillow, Realtor.com, Trulia, etc.
Do I have to pay the flat fee up front?
No, there are no upfront fees. Both the flat fee and buyer’s agent commissions are deducted from your proceeds at closing. Both sellers and buyers have the opportunity to review the settlement statement prior to closing.
Will agents from other brokerages show my property if I list with Flat Fee Refined?
“Absolutely! Beyond the buyer’s agent having a legal and ethical obligation to serve their client’s best interest under Missouri law, the agents at Flat Fee Redefined have reputations of being great to work with! We only recruit agents to our team that fit our ideals. With our strong communication skills and attention to detail, other real estate agents WANT to work with us! This is also why it is necessary to offer the buyer’s agent their traditional commission–we make sure they understand that us committing to lower commission on the listing side does not impact the buyer’s agent commission.
Additionally, buyers are often finding the properties they want to see online without their agent’s assistance, and if a home meets the criteria of a buyer and their agent refuses to show the buyer the home, the buyer will terminate that agent and choose an agent who is looking out for their best interest. ”
*To utilize the flat fee, sellers must be willing to e-sign, but it’s easy! We’ll show you how.