Flat fee MLS is a growing trend in the real estate industry. Flat fee MLS means listing a property for sale in the local Multiple Listing Service (MLS) database for a flat fee, instead of paying a commission based on the sales price of the home.
A local MLS is a standard database that every real estate agent and broker uses to determine what homes are for sale in a given city or town. Typically there is one MLS for each large metro area in the United States. Homes within surrounding smaller towns are included in the larger nearby city or metro area MLS database. Usually a seller would agree to pay a 6% commission to list their home in the MLS when they use a real estate agent – 3% to their seller’s agent and 3% to the buyer’s agent – upon the closing of the sale.
For flat fee MLS listings, a listing contract between the real estate broker and the property owner typically requires the broker only to enter the property into the MLS. For this service, the seller agrees to pay the broker a flat fee up front, rather than a full commission upon sale of the home. For home owners wanting to sell their home “For Sale By Owner” (or FSBO – pronounced “fizz-bo”), this is a great benefit, as it makes the real estate industry’s standard MLS available as a marketing tool without having to pay a seller’s agent commission.
Flat fee MLS service is far less expensive than using a full commission real estate agent to list a home. The listing fee for a “flat fee MLS” can range anywhere from $300 – $1,000, depending on the website or agent providing the service. When a seller chooses a flat fee MLS service, in addition to the flat fee, they still must include a buyer’s agent commission. Depending on the area of the country, the buyer’s agent commission can be anywhere from 2% – 3%. The flat fee plus the buyer’s agent commission is much less than a full 6% commission that would normally be split 3%/3% for the seller’s agent and buyer’s agent, as the seller’s agent commission is eliminated. For FSBO home sellers willing to do the work of the seller’s agent, flat fee MLS can provide all the exposure for the home necessary to find buyers while saving the home owner thousands of dollars.