Having a real estate broker by your side is exceedingly indispensable when trying to sell your home. You need several networks and the real estate market know-how to crack a good deal. You have to search for the Flat Fee Real Estate Broker.
However, it isn’t so favorable to pay hefty commissions to these real estate brokers to get your job done. Especially if the commission rates are too high.
Here’s where having a flat fee real estate broker can be your go-to strategy to sell your home. But how far is selling your home through a flat fee real estate broker beneficial for you?
Let’s try digging more into this.
How Does The Flat Fee Model Of Real Estate Brokers Work?
When a real estate broker charges a fixed fee rather than a percentage of the sale, it’s a flat fee.
For instance, in a commission-based transaction, you may pay 5% as a commission on a sale amount of $200,000 to the broker. However, in a flat-fee transaction, you will pay a fixed amount for the above sale, which could be $3,500.
So basically, if you pay the broker a commission of 5% on the sale of $200,000 you would pay $10,000.
While, if you are paying a flat fee, you may pay the same amount which is $3,500 no matter if the house sells for $100,000 or $1,000,000.
Pros Of Using A Flat Fee Real Estate Broker
You can win a great deal for your home using a flat fee broker. Below are some pros of flat fee real estate brokers that you must consider.
1. Getting More Control:
At times having more control over the selling process can be advantageous for you. As a result, you could have the ability to make several decisions following your preferences and convenience.
By using a flat fee broker, you may get control over many important selling aspects such as deciding the home price, handling negotiations, or selecting options to market it.
You may also get control to decide if you want to have an open house and not to be at the mercy of the broker’s schedule.
Not only this but with some flat fee brokers you may also get the authority to decide if you want to sell the home with the full support of an agent or with a limited one.
2. Saving More Money
As the flat fee charged by the broker does not depend upon the selling price, it can potentially be less and you may end up saving more money. In other words, you may save more of the proceeds from your final sale amount after paying a fixed fee.
In the above example, whether your sale amount is $100,000 or $1,000,000, you shall pay a fixed flat fee that is $3,500. If your sale amount is greater you may save more under the flat fee model.
It is also observed that usually flat fees are lower than commissions. Hence, you may save money. However, it also depends on the terms that you agree upon with your broker.
3. Proper Budgeting:
Flat fees are mentioned in the listing agreement and usually do not vary as per the final sale amount of your home.
Hence, as a seller, this helps you to do proper budgeting to make things fall in place properly.
It’s especially helpful when your budget is tight. You know what fee exactly you will pay the broker and plan accordingly on your net proceeds.
If you are a seller who is tight on budget and prefers knowing promptly what you will have to pay the broker before your sale to avoid any kind of uncertainty, you should go for a flat fee real estate broker.
Cons Of Using a Flat Fee Real Estate Broker
Even if you may potentially pay less using a flat fee model, it has drawbacks too. Here’s what you need to consider.
1. Getting Limited Services:
Getting more while paying less is something very rare, as you usually get what you have paid for.
A flat fee broker may not provide all the services that he/she would have while working on a commission-based model.
You may get very limited services. The broker may also list your home only on the local MLS which is just not enough to get a good deal.
However, it is not bad to get a few services for paying less, but it still depends on your selling goals and the current situation that you might be in.
2. Earning Less Profit:
You may sacrifice your profit if you choose to use a flat fee real estate broker.
This is so because flat fee real estate brokers have less motivation (no incentive) to negotiate and get you the best deal with top dollar for your home.
Flat fee brokers usually consider volume to make it big and hence, they may not dedicate much time and effort to negotiating for increasing your profit.
3. Paying For Additional Expenses:
You can save more money by paying a flat fee and not high commissions, but you may also have to incur some additional expenses.
You may require to spend on marketing, pricing, and other closing activities, which otherwise a commission-based agent would have done.
Your flat fee agreement may include only listing your home on MLS. For attracting more buyers you are required to incur additional expenses. Hence, it is recommended to consider these expenses before you go for flat fee brokers.
A flat fee model can help save money, but on the other hand, you also need to be ready to handle other activities associated with selling on your own.
So, depending on your goals you could thoroughly analyze both the pros and cons and decide as per your situation and objectives whether to go for a flat fee real estate broker or not.
For expert opinion contact Elite Properties today!