A Flat Rate Real Estate Commission Keeps Your Closing Costs to a Minimum
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by: sarawilliams
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Real estate commission has traditionally been calculated as a percentage of the selling price of a home. Under this system, real estate commission amounts depend on sale price and are split at closing between the seller and buyer real estate brokers from the sale proceeds. Real estate commissions are typically set by the selling broker and range between five and six percent of the sale price. Until now, this system has been the sole method for payment of broker services.
Licensed real estate brokers now have the choice of offering their services for a flat rate instead of a percentage based real estate commission. The one time flat rate real estate commission system is referred to in the real estate industry as Flat Fee MLS (Multiple Listing Service) and allows the seller to list on the Multiple Listing Service and other public real estate websites for a flat fee paid upfront when you list. You will still have to pay a percentage based real estate commission to a buyers broker when you sell your home, but this amount will be only a fraction of the real estate commission you would have paid under the old system. And, if there is no buyer broker, the flat rate ends up being your only real estate commission.
It is clear that the Flat Fee MLS system is the most cost effective way to sell your home. You will receive the same amount and quality of service as you would under the percentage based real estate commission system. Some of the Multiple Listing Service agencies will even allow you to place a For Sale By Owner sign (with your telephone number) on your property, which can attract buyers directly to you from the website and save you thousands in real estate commission costs. However, most buyers do choose to work with brokers when looking for a home, and some of those brokers may be reluctant to direct their clients to you if no selling agent is involved. An Agent Friendly tag on your For Sale sign will reassure those hesitant brokers. Inquiries still come directly to you, but you will direct more traffic to your door if buyer brokers feel comfortable recommending your listing to their clients.
The flat rate real estate commission system gives you more exposure by allowing you to list your property on multiple websites and saves you thousands of dollars in real estate commission costs. With a more effective selling strategy and the prospect of higher net proceeds from the sale of your home, how can you go wrong.
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