What Is Flat Fee Listing? 

In a "flat fee" listing, the seller of the house will sign a Listing Agreement with a real estate broker or agent. However, instead of agreeing to pay a percentage of the total sales 

price of the house (typically 5-7%) the seller agrees to pay a flat fee (typically between $250 and $750). The seller also agrees to pay a commission to the agent who brings the buyer (typically 2.5% to 3% of the total sales price of the house).

Let's make this clearer.

Let's assume the flat fee to the listing broker is $500 and that the commission to the selling broker is 2.5%.

If your home sells for $300,000 you will ultimately pay $500 PLUS $7,500 to the selling broker for a total of $8,000. This is about half of the amount you would pay on a 6% traditional basis.

Remember that you will pay the listing broker his flat fee upfront at the beginning of the sales cycle. The listing broker earns his fee immediately and there is no refund after you sign the agreement. The $8,000 commission to the selling broker is earned only after the house is sold and the closing is completed. 

The flat fee broker will put your house for sale in the local MLS (Multiple Listing Service). Since a large majority of homes are sold through the MLS by itself, in most cases that is all you need to sell your house. The statistics kept by professional real estate organizations bear out the truth that using the MLS is the primary way people sell their houses.

For Sale signs, newspaper advertising, internet advertising and a host of other traditional real estate services pale in significance to the power of an MLS listing.

Greg Cryns is the owner of Flat Fee Real Estate Guide - http://www.flatfeerealestateguide.com