Keep Your Closing Costs to a Minimum
Posted 08/05/09
Traditionally, real estate commissions have been calculated as a percentage of the sale price of a home. Real estate commission depends on the final sale price and is paid out and split between seller and buyer real estate brokers at closing. Real estate commission amounts are set by the selling broker and tend to range between five and six percent of the selling price. Until now, this system has been the sole method for payment of broker services.Licensed real estate brokers can now choose between charging a flat rate or percentage based real estate commission for their services. This one time real estate commission fee system is known in the real estate industry as Flat Fee MLS (Multiple Listing Service) and allows the seller to list his home on the Multiple Listing Service and other public websites for a one time flat rate that is paid upfront when you list. You will still have to pay the buyer broker a real estate commission, but this amount is only a fraction of the commission you would be responsible for under the percentage system. And, if the buyer does not go through a broker, the flat rate will be your only real estate commission responsibility.
It almost goes without saying that the flat rate real estate commission system is the most cost effective way to sell your home. You will receive the same amount and quality of service as you would under the percentage based real estate commission system. Some of the Multiple Listing Service agencies will even allow you to place a For Sale By Owner sign (with your telephone number) on your property, which can attract buyers directly to you from the website and save you thousands in real estate commission costs. However, most buyers do choose to work with brokers when looking for a home, and some of those brokers may be reluctant to direct their clients to you if no selling agent is involved. Adding an Agent Friendly tag to your For Sale sign can reassure hesitant brokers. Inquiries still come directly to you, but you will direct more traffic to your door if buyer brokers feel comfortable recommending your listing to their clients.
The flat rate real estate commission system gives you more exposure by allowing you to list your property on multiple websites and saves you thousands of dollars in real estate commission costs. With a more effective selling strategy and the prospect of higher net proceeds from the sale of your home, how can you go wrong.