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Flat Rate Realty Explained

Real Estate

Flat fee realty refers to a real estate transaction in which the real estate agent is paid a flat fee instead of a percentage of the sale. It is a less common form of real estate transaction, although flat fee realty is possible and is popular among some buyers and sellers.

What is Flat Fee Realty?

Flat fee realty is an alternative to commission based real estate sales. Normally, the seller will pay six percent of the amount of the sale of his home to the real estate agents involved in the deal. Three percent will go to the seller's agent- the person who listed the home- while the other three percent will go to the buyer's agent.

When a seller is required to pay six percent commission, this can add up to a rather large number. Flat fee realty, on the other hand, doesn't charge on the basis of the percent of sale. The flat fee real estate company will spell out a fee for services before the property is listed. These fees are normally outlined in the contract the seller signs in order to permit the realtor to sell his home. Generally, the fees will be based on a number of factors including the type of sale, the amount of work the realtor expects to have to do, the market conditions, and the value of the home being sold.

Flat fee realty is more common on the buyer's side. Some buyer's prefer to work with an agent that charge flat fee payment for his services instead of one that takes a percentage of the sale. Although a buyer will generally have to pay a flat fee realtor himself instead of having the agent paid by the home seller, this can still be an advantageous decision for some buyers. Since buyers are trying to lower the price of a home as much as possible, opting for flat fee realty can be a great way to ensure that the agent's interests are aligned with their own because instead of making more money as a result of the buyer paying more- which happens when an agent is paid on a percentage commission- a flat fee realty agent makes the same amount regardless of the dollar value of the buyer's offer. Furthermore, the buyer may be able to ask the seller to reduce the price of the home, since the seller will not have to pay commission to a buyer's agent.

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