Discount Flat Fee versus Low Commission Real Estate Agents in Charlotte & North Carolina
We are sometimes asked if White Stag Realty handles flat fee real estate transactions. Flat fee transactions require a client to pay an up front fee at the start of the transaction. The real estate agent retains this fee, whether the home sells or not. Some flat fee real estate brokers charge additional fees for certain services. The key difference between a flat fee real estate transaction and a low commission real estate transaction is when and if the agent receives compensation.
In a transaction where a realtor makes a percentage-based commission, the real estate agent receives compensation only if your home sells. If the home does not sell, the agent receives nothing. Additionally, the real estate broker is paid only upon the completion of the transaction.
In a flat fee real estate transaction, the real estate agent receives compensation whether your home sells or not. The real estate broker gets paid the exact same amount, even if your home does not sell. Additionally, if your home does not sell, the real estate agent actually has far less work to do. The realtor receives compensation before any work begins, and keeps this fee regardless of whether you are satisfied with the services provided.
For real estate transactions in North Carolina, White Stag Realty strongly discourages flat fee transactions. We will consider a flat fee transaction in some very limited circumstances. However, approval to handle any real estate transaction on a flat fee basis is discouraged and requires express approval from the owner of White Stag Realty.
White Stag Realty is aware that some home sellers in North Carolina are interested in pursuing flat fee transactions. However, as a general policy, we discourage our realtors from engaging in such transactions. The business of real estate is largely word of mouth and relies heavily on customer satisfaction. Simply put, we need satisfied clients who will refer their friends and family to work with us. Happy clients are good for business.
Unfortunately, many flat fee real estate transactions end in disappointment. If you do a quick google search for flat fee real estate agents, you will find that most either have no reviews, or very few reviews. This is often because flat fee real estate brokers receive so many negative reviews that they constantly have to delete their business profile and start from scratch.
As the owner of White Stag Realty, I am somewhat embarrassed to admit that before I entered the field of real estate, I myself used a flat fee service to sell my first home. It was not a positive experience. However, my own disappointment in the transaction is what later inspired me to start White Stag Realty as a real estate office that offered reasonable transaction fees – but if and only if your home sells.
If you are interested in talking to one of our real estate agents about a real estate transaction in North Carolina, please call us at 980-777-4440, email us at [email protected], or visit our home page.
We look forward to working with you.
Frequently asked Questions and additional information about working with a low commission real estate agent versus a flat fee real estate agent:
What is a Low Commission Real Estate Agent?
A low commission real estate agent is a licensed real estate professional who charges a lower commission rate than the traditional 6%. Commission rates for low commission agents can vary, but they typically range from 1-3%.
What is a Flat Fee Real Estate Agent?
A flat fee real estate agent is a licensed real estate professional who charges a fixed fee for their services, regardless of the sale price of the home. Flat fee rates can also vary, but they typically range from $3,000-$5,000.
Advantages of Using a Low Commission Real Estate Agent Over a Flat Fee Real Estate Agent
1. Save Money
The most obvious advantage of using a low commission real estate agent is that you can save money on commission fees. For example, if you sell your home for $500,000, you could save $15,000 in commission fees by using a low commission agent who charges 3% instead of a traditional agent who charges 6%.
2. Get More Services
Low commission real estate agents typically offer the same services as traditional agents, but for a lower commission rate. This means that you can get all the benefits of working with a real estate agent, such as help with pricing your home, marketing your home, and negotiating offers, without having to pay the high commission rates that traditional agents charge.
3. Get More Experienced Agents
Many low commission real estate agents are experienced agents who are looking for ways to save their clients money. This means that you can be confident that you are working with a qualified agent who has the knowledge and expertise to help you sell your home quickly and for the best possible price.
4. Get More Flexible Terms
Some low commission real estate agents offer flexible terms, such as the ability to cancel your listing agreement at any time without penalty. This can be a big advantage if you are not sure how long you want to stay on the market or if you decide to sell your home yourself.
5. Get More Personalized Service
Low commission real estate agents typically have fewer clients than traditional agents, which means that they can provide more personalized service. This means that you will have more access to your agent and your agent will be able to devote more time to your home sale.
Disadvantages of Using a Flat Fee Real Estate Agent
1. Limited Services
Flat fee real estate agents typically offer a limited range of services. For example, some flat fee agents may only list your home on the MLS and help you show your home to potential buyers. Others may offer additional services, such as help with pricing your home and negotiating offers, but for an additional fee.
2. Less Experienced Agents
Some flat fee real estate agents are less experienced than traditional agents. This is because flat fee agents are typically paid less, so they may be less motivated to provide high-quality service.
3. Less Flexible Terms
Flat fee real estate agents typically have less flexible terms than traditional agents. For example, some flat fee agents may require you to sign a listing agreement for a certain period of time, even if you are not satisfied with their services.
4. Less Personalized Service
Flat fee real estate agents typically have more clients than low commission agents, which means that they may not be able to provide as much personalized service. This is because flat fee agents are charging a lower fee, so they need to handle a higher volume of clients in order to make a profit.
Which Type of Agent is Right for You?
The best type of agent for you depends on your individual needs and budget. If you are looking to save the most money on commission fees, then a flat fee agent may be a good option for you. However, if you are looking for a more experienced agent who can provide you with more personalized service, then a low commission agent may be a better choice.
Here is a table that summarizes the key advantages and disadvantages of low commission real estate agents and flat fee real estate agents:
|Characteristic||Low Commission Real Estate Agent||Flat Fee Real Estate Agent|
|Commission rate||Lower than traditional agents (typically 1-3%)||Fixed fee (typically $3,000-$5,000)|
|Services offered||Full range of services, same as traditional agents||Limited range of services|
|Agent experience||Varies, but many low commission agents are experienced agents||Varies, but some flat fee agents may be less experienced|
|Flexible terms||Some low commission agents offer flexible terms, such as the ability to cancel your listing agreement at any time without penalty||Flat fee agents typically have less flexible terms|
|Personalized service||Low commission agents typically have fewer clients than traditional agents, which means that they can provide more personalized service.||Flat fee agents typically have more clients than low commission agents, which means that they may not be able to provide as much personalized service. Flat fee agents generally have to take on a higher volume of clients in order to make a profit.|