What is a flat fee in real estate?

What is a flat fee?

A flat fee refers to a fixed charge that a home seller pays to have their home listed on the market, instead of a percentage-based commission based on the final sale price of the home. With a flat-fee agreement, the amount your home sells for does not impact the final fee you pay.

“A flat fee in real estate is when an agent charges a set amount of money rather than a percentage of the sale,” says Rick Albert, a broker associate with LAMERICA Real Estate in Los Angeles. “For example, instead of paying a 3 percent commission on a $500,000 sale, there could be a flat fee of $5,000 that goes to the agent. No matter what the home sells for, the seller pays the agent the same amount.”

How does a flat fee differ from commission-based real estate?

The main difference between a commission-based transaction and a flat-fee one is that the agent or broker gets paid the same fee regardless of the final sale price of the home.

“Using the $500,000 example, if an agent were to get paid a commission of 3 percent, that agent would receive $15,000 — versus a flat-fee agreement where the agent gets paid the same fee whether the home sells for $100,000 or $1 million,” says Albert.

Another variation on the flat-fee approach to selling your home is known as a flat-fee MLS listing. This involves a home seller purchasing a “listing plan” from a flat-fee agent in exchange for the home being listed on the local multiple listing service, or MLS. MLS listings are typically aggregated on real estate search websites such as Zillow, Trulia and others. But the agent typically does not provide any additional services as part of the package.

Are flat-fee Realtors good?

Flat-fee Realtors can be a good choice depending on your goals and needs. Opting to work with this type of professional, for instance, can be worth it if your goal is to minimize costs. By saving on agent commissions, you’ll be able to keep more of the proceeds from a home sale in your pocket.

There are some potential drawbacks to consider however. A flat-fee model generally does not provide the same level of service as working with a commission-based Realtor. In addition, the final sale price of your home might not be as high as it would be with a traditional sale.

Pros and cons of a flat-fee structure

Flat fees can be an attractive option, but it’s essential to understand the advantages and disadvantages.

Pros

• Costs are clear upfront
• May save you money
• More control over the process

Cons

• Limited service options
• Less profit
• Potential liabilities

Pros

Costs are clear up front

Flat fees are fixed and usually outlined in writing in a listing agreement. They will not vary or increase based on the price your home sells for. As a result, you’ll know exactly what you’re paying upfront.

May save you money

Because flat fees are not tied to the final sale price of your home, this approach can be less costly. “In some cases, flat fees save you money, as most of the time a flat fee ends up being lower than commission,” says Rodgers. “But it all depends on the terms of the deal worked out with your broker.”

The typical flat fee might run between $3,000 and $5,000, while agent commissions are 5 to 6 percent of the sale price. As of February 2025, the national median home sale price was $425,061, according to Redfin; 6 percent of that would amount to more than $25,500. That’s far higher than a flat fee.

More control over the process

When selling your house with a flat-fee company, you are the one who sets the price for the home. In addition, similar to a for sale by owner situation, you are in control of when showings take place and you handle price negotiations. For some, this may be preferable to handing over such matters to an agent.

Disadvantages

Limited service options

Agents who work on a flat-fee basis may not provide the same level of service as those working on commission. Some flat-fee agents will simply list your home on the local MLS and nothing more. “There may not be enough margin for the agent to hire a photographer, conduct open houses, create video tours and more,” says Albert.

Less profit

Sellers avoid paying a steep commission when going the flat-fee route — but they may also sacrifice on profit. “The flat-fee agent has no incentive to get the seller the best price, because typically, the agent gets paid less than a traditional one,” says Albert. “The business model with flat fees is all about volume.”

Potential liabilities

Opting for a flat-fee listing often means you will be doing much of the work on your own, without the expertise of a pro by your side. This includes completing all the paperwork associated with a real estate sale transaction, such as seller’s disclosures. If you complete any of this paperwork incorrectly, there could be consequences.

Flat-fee companies and alternatives

If you’re interested in exploring the possibility of selling your home for a flat fee, there are various options to choose from. Here are two popular companies to consider:

• Houzeo: This online platform offers flat-fee MLS listing services. It has three tiers of packages, ranging in price from $199 to $299 or more, plus an additional percentage at close.
• ISoldMyHouse.com: This site also offers MLS listing packages for a flat fee of $299 (with fewer photos) or $399 (with more photos).

Some companies also offer discounted or low-commission services. Companies using this model include Clever, a service that matches home sellers with agents who charge just a 1.5 percent commission, and Redfin, whose program charges just a 1 percent fee.

Listing with a traditional real estate agent might be the most expensive approach, in terms of commission paid. However, for the price you will typically get a great deal of service, attention and professional advice — which can help you secure the most lucrative price for your home.

What sellers should know about flat fees in real estate today

Real estate commissions are a costly part of the home selling process for a homeowner, but a landmark lawsuit settlement in 2024 has reduced this expense somewhat.

As part of the settlement, the National Association of Realtors (NAR) agreed to new rules surrounding real estate agent commissions. Those changes mean sellers are no longer necessarily on the hook for paying the buyer’s agent commission — on top of paying their own seller’s agent commission. While home sellers may still offer to pay the buyer’s agent’s fee as part of negotiations to close a deal, there is no requirement that they do so. This development has the potential to make home selling less costly.

This development, and the potential reduction in the cost for home sellers, is worth considering when deciding whether to work with a flat-fee Realtor or a traditional commission-based agent.

FAQs

• What is a flat fee in real estate versus a regular agent’s commissions?

  A flat fee is a fixed charge that a home seller pays to list their home for sale. The price for this service does not change regardless of how much the home sells for. A typical agent’s commission, however, is percentage-based — they make more or less money depending on how much the home sells for. Real estate commissions usually total 5 to 6 percent of a home’s final sale price.

• How much does it normally cost to list on an MLS?

  Access to a market’s local MLS, or multiple listing service, typically requires having a real estate license — in a typical sale, your listing agent will list the home on the MLS for you. However, sellers can purchase an MLS-listing package directly from services such as Houzeo and Isoldmyhouse.com, which list your home on the MLS for a fee. The cost can range from $199 to several hundred dollars or more.

• Are flat-fee real estate companies legitimate?

  Yes, flat-fee companies are legitimate businesses. They can save sellers money by listing their home on the market for a fixed fee, offering a cheaper alternative to the typical commission-based real estate business model. However, these companies will usually provide far less service than a commission-based agent.