What is Flat Fee Full Service Real Estate?
A Flat Fee Full Service Real Estate Brokerage is a company that will list your home for a fair flat fee while providing a full service experience that includes everything from inclusion on the MLS to a fully executed marketing strategy that markets and sells your home in the fastest amount of time for the most amount of money.
This is an important concept for homeowners to understand because traditionally, the cost of most real estate transactions was tied to the value of the home, rather than the value of the services provided by the real estate agent.
Flat Fee Real Estate Brokers charge a fixed or flat fee for brokerage services instead of a commission based on a percentage of the sales price of the property.
Why would a homeowner choose a Flat Fee Full Service Real Estate Brokerage?
The benefits of listing your home with a flat fee full service brokerage are heavily weighted in favor of the homeowner.
One of the most frustrating things with the traditional model is that while you might know what percentage of your home value you’ll have to give away to your agent at close, you might not know exactly what that money paid for. With a flat fee realtor, you will know the exact list of deliverables and the costs associated with those elements.
When you sell your home with a flat fee you have the transparency to know exactly what you are paying for and the value you can expect to receive in the process of getting your home sold.
A flat fee agent does the same work as a commission-based real estate agent, but they only charge a set amount. This is helpful because as a homeowner you want to know exactly what you are paying for.
Similarly, with a flat fee real estate agent you will never be surprised at the closing table with how much money you have to pay. You will know at the beginning of the relationship what the real estate agent fee will be and that price will not change depending on the final sales price of your home.
A Flat Fee Full Service Real Estate Brokerage gives you the benefit of an experienced agent that can represent your interests in the transaction and help guide and advise you through the process. You will never have to worry about an agent being incentivized to give priority to a different client because their transaction is “worth” more which is something that can happen in the traditional commission-based real estate model.
Having an experienced agent in your corner is a benefit to any person considering selling their home.
Considering that 44% of buyers start their home search by looking online, according to NAR, the MLS is a great way to gain exposure.
A Flat Fee Full Service Real Estate Agent will ensure that your home is loaded to the MLS which populates the online platforms that buyers are looking at when they are on a house hunt.
Keep More Cash at Close
Flat Fee Real Estate Agents understand that it is YOUR HOME and YOUR MONEY. Our goal is to help you maximize the amount of money you put in your pocket.
When you choose to work with a Flat Fee Full Service Real Estate Agent you are protecting your equity and keeping more cash at close.
Let’s take a house that sells for $650,000.
When you list with a traditional real estate agent that has a commission based on the value of your home, you can expect to pay your listing agent about $19,500 in commissions!
With a flat fee full service brokerage, that fee is usually significantly lower.
At Scout, our full service, flat fee Core Plan starts at $7,500.
By selling with Scout, you save an additional $12,000 at closing to do with as you wish!
What are other listing models?
When considering how to list your home it’s important to consider your options. While Flat Fee Full Service Real Estate is a model that has several benefits there are other ways that you can list and sell your home.
Traditional Commission Model
The traditional commission model is what most people are familiar with when it comes to selling and buying a home.
A Real Estate Agent is paid a commission based on the value of your home. That means the amount that is paid can vary depending on how much your house sells for.
According to Bankrate, these old-fashioned agents typically charge their clients about five to six percent of the sales price. Zillow says that commissions can be as high as seven percent. That commission is generally split between the buyer’s and the seller’s agent, but at the end of the day listing with the traditional commission model means that agents will walk away with compensation that was tied to the value of your home, rather than the value of the service they provide.
Here’s another thing to consider, commissions paid on the value of the home erodes the homeowner’s net worth of the homeowner.
Two-thirds of American homeowners’ net worth is tied up in their houses. This means that those families risk a significant portion of their net worth if they choose to sell with the traditional commission model.
Consider this scenario:
Let’s take an average house with a sale price of $500,000. If the homeowner has a $450,000 mortgage and they build up $50,000 in equity, if they choose to sell with the traditional model there is going to be commission paid.
The commission paid on the sale price of the house would be about $30,000 in lost equity.
The $50,000 that they had earned in equity is reduced to $20,000 because of the traditional commission model. In this scenario, the homeowner that pays 6% on the sale of their house is actually paying out 60% of their equity in the traditional commission model.
If two-thirds of Americans have their net worth in their house, to relinquish 60% of their net worth to a traditional commission is unconscionable.
This traditional model that was created before the internet is outdated, harms the homeowner’s net worth and is no longer relevant for the modern homeowner.
Entry MLS Flat Fee
An MLS Flat Fee option is a service by which you pay a very low flat fee to have your property included on the MLS which is a multiple listing service. This service then populates the information about your property across a variety of online platforms.
The main benefit of getting your house listed on the local MLS is that it gets your listing syndicated onto top real estate websites like Zillow and Realtor.com. Websites like Zillow, Trulia, and Realtor.com pull data from these local MLS listings and serve it to their millions of users.
Knowing that 44% of buyers start their home search by looking online it just makes sense to ensure that your property is included in the MLS.
Keep in mind, only an agent can list on the MLS, which is the only thing you’re paying for with a flat fee MLS service. In other words, you won’t get access to the other services usually offered by agents.
The MLS is also sometimes called an “entry only” listing, which means that the agent entering the listing into the MLS is not performing any other tasks for the seller. So, for example, interested parties will know not to contact that agent to arrange a showing. They’ll go directly to you, the seller.
If you choose an entry-only MLS listing you can expect to market your house, host your own open houses, negotiate your own contract, and facilitate the entire contract-to-close process. While getting your house included with a flat fee MLS listing is an important component of marketing your house, you can anticipate that the trade-off for a low upfront cost will cost you in terms of time, energy, and potential money as you work to effectively create leads for your sale and then work to close the deal.
For Sale By Owner
It can be tempting to dive right in and just sell your house without the help of a realtor. The thought of just handing over tens of thousands of dollars to someone simply because you live in a nice home makes even the most seasoned business-minded people squirm.
So while FSBO might feel like a good option to keep more money in your pocket consider this.
It is not a free way to sell your house, you’ll still need to pay a buyer’s agent… which means two to three percent of your sale price and the seller’s closing costs associated with selling the property.
You will not be on the MLS. With a large percentage of homebuyers shopping online before they even reach out to a realtor your home will not be visible to those potential buyers.
You have to do all the work. From filing paperwork to hosting open houses, and marketing your property there is a significant amount of time and attention that goes into selling your property and the hours of attention you’ll need to give your property to get it sale-ready, marketed, sold, and ensuring that all the legal documents are properly executed can really add up!
Scout Offers A Better Way
When we looked at the traditional real estate model and the options that homeowners have to list their homes we realized the flat fee Nashville hypothesis proved the model for the modern brokerage.
The hypothesis was to help customers by driving down the cost by offering services for a fair fixed fee while raising the value to the customer with a full-service experience to get their house sold in the least amount of time for the most amount of money.
This nexus is called value innovation where the new model modern brokerage truly serves the best interests of the customer.
We have proven that our flat fee full service brokerage can sell houses faster than the industry standard and for more money.
We are outpacing the industry average of 30 days on the market whereas ours are on the market for an average of 23. The list price to sales price average in Nashville is 88% and Scout is selling houses in Nashville at 98.7% list price to the sale price.
All of this happens because we realize that the traditional model was no longer serving the client’s best interest and that the real estate industry was due for disruption.
Rather than follow outdated legacy modes of doing business, we decided to take a risk and break the mold of how a brokerage operates in order to provide the most value to our clients.
Our first step was to carefully consider how to best serve our clients.
We believe that our success ought to be measured by what we give rather than what we take and that preserving and growing our client’s net worth was the best thing we could do for them.
Working from the understanding that monies produced from a home sale was the homeowner’s equity and not our commission, we decided to do something radically different and offer a flat fee full service offer to the market.
Scout provides specific services including a proven marketing strategy and a dedicated team to help sell your home in the least amount of time for the most amount of money for a fair flat fee….an amount that you will know upfront and with full transparency as to what you are getting for that fee.
You’ll see that working with a real estate brokerage that is designed to help the homeowner retain their equity it enables our customers to have more cash at close. This gives the homeowner more buying power for their next home or frees up resources to travel, pay tuition, or even put towards retirement. Most importantly, this model protects homeowners’ net worth.
Scout has proven in Nashville that a Flat Fee Real Estate Brokerage is the model for the modern brokerage because it has created a repeatable process for excellence that includes a predictable pipeline of lead generation, excellence in its business operations, and a workforce of full service full-time agents that can cater to customer’s needs at the highest level with a fiduciary obligation to protect the homeowners’ net worth.
Are you interested in hearing more about Scout and our Flat Fee for Service model? Click here https://scoutrealty.com/selling/ to learn more about Selling with Scout.