Traditionally, selling commission in most North American markets through MLS have been between 5% an 6% of the sale price. Till the advent of internet, the information on properties, their values, taxes and other factors that affect the values were available only through real estate brokerages who kept and maintained the databases of such valuable information. Brokerages charged a fair price for providing access to such information and selling a property through MLS.
Then the era of free and easy access to information began, internet was in vogue. This also brought in the Flat Fee MLS service in vogue. Though, flat fee MLS service has been around for several decades, its share of the total real estate market was very low. Lately with consumers becoming more concerned about the cost of selling, Flat Fee MLS listing has caught the attention of the public and media.
To really understand selling through MLS, one must know and understand how the process works. When you hire a Real Estate Brokerage to put your property for sale through the multiple listing service, the Real Estate Brokerage becomes the listing Brokerage / Agent of your property.
The information about your properly is processed through the MLS system. All members of the real estate board have access to the MLS system. When a member of the real estate board, acting through the MLS system, brings an offer and the property is sold, he is called a Cooperating Broker.
The fee / commission that you pay for selling is split between the two brokerages, traditionally on a 50/50 basis.
Flat FEE MLS refers to the commission of the Listing Broker, who offers MLS services for a Flat Fee. Flat Fee means, that Listing broker's fee is not a percentage of the selling price, it is fixed. Though the cooperating brokerage can also work on a flat fee, in the current context of Flat Fee, we are only discussing Flat Fee for the Listing Brokerage. The Flat Fee varies from brokerage to brokerage and so do the services offered.
Some brokers, provide you full service at a much lower price than the conventional five or six percent of the sale price. Some offer low Flat Fee MLS but no other support or hardly any support. Many others have a combination of small fee that covers some costs of providing a MLS service and then the total fee is heavily discounted. There is also a trend where instead of buying the bundled MLS service, you can buy only those services that you need.
Marketing through MLS service can be split into several distinct steps and packages of activities.
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