Is Flat-Fee MLS the Right Way to Save on Commission?

If you want to sell your home through the multiple listing service but don’t want to hire a listing agent, a flat-fee MLS may be right for you.

The MLS, or multiple listing service, is one of the most effective marketing tools when selling your home. Buyer’s agents use the local MLS to find houses for their clients and many popular real estate sites pull their listings from MLSes.

However, only licensed real estate brokers can make listings on the MLS, so if you don’t want to pay a hefty 6% commission fee to work with a traditional Realtor, you’ll need an alternative.

Flat-fee MLS services provide a way for sellers to list their homes on the MLS without handing over a large chunk of their equity in commission fees. However, flat-fee listing services have their own downsides and frugal sellers should understand all their options to make the right choice for their situation.

Let’s take a deeper look at what a flat-fee MLS does and how it might work for you.

What is a flat-fee MLS?

A flat-fee MLS is a service that allows you to list your home on the MLS for a one time, flat fee that’s typically significantly less than a realtor’s commission.

Generally, when you list your home with a full-service real estate agent, your agent will list your home on the local MLS, hire a professional photographer, put a sign in your yard, and write a listing description. This package also usually includes a comparative market analysis (CMA), marketing, negotiation assistance, and guidance throughout the entirety of the home sale.

If you don’t need all those services, or thinking their price is too high, you can go to a flat-fee MLS listing service instead. You’ll pay a broker to list your home on the MLS — which only a licensed agent can do — and take care of most of the selling steps yourself.

That said, every individual flat-fee MLS service will differ in the amount of support provided. Some will help you with legal contracts or offer additional marketing services, while others will simply list your home and provide you with a “For Sale” yard sign.

You can expect to pay $100-$500 for a typical flat-fee MLS listing service. However, some companies that offer greater levels of assistance will charge significantly more.

Advantages of flat-fee MLS services

  • Save on commission fees: A typical flat-fee MLS listing will cost far less than listing your home with a traditional realtor. Instead of paying 3% of your final sales price, you’ll pay a set fee of a couple of hundred dollars.
  • Complete control over your listing: When you use a flat-fee MLS service, you’ll write your own listing and take care of your home sale completely on your own. Some homeowners enjoy taking the reins themselves.

Disadvantages of flat-fee MLS services

  • No guidance: Selling a home is complicated, and most sellers appreciate the guidance and advice that a professional realtor brings to the table.
  • Reduced services: When you list with a flat-fee MLS service, you’ll miss out on a professional CMA, negotiation assistance, and marketing help — all services that help your home sell faster and for a better price.
  • Buyer’s agent commission: Remember that even if you use a flat-fee MLS service, you’ll still need to pay the buyer’s agent’s commission fees, which typically run 2.5-3% of the home’s sale price.

Alternatives to Flat-Fee MLS Listings

Flat-fee MLS services aren’t the only way to save on realtor commissions. Here are a few other options to consider.

Discount Realtors. They're real estate agents who offer their services at a reduced price. A discount Realtor could be a full-service real estate agent who simply charges a lower commission fee, or a Realtor who offers fewer services and charges a reduced price accordingly.

Some flat-fee MLS services straddle the line between a discount Realtor and flat-fee MLS.

When you list with a discount Realtor, you’ll save on commission fees, albeit it not as much as you would listing with a flat-fee MLS. Many discount Realtors charge around 1% to 2% in commission fees, for example.

However, you’ll still need to pay the buyer’s agent’s commission fee, which will bring your total commission cost to approximately 4% to 5%.

FSBO. If you want the ultimate in savings, you can list our home For Sale By Owner, or FSBO. When you list your home FSBO, you’ll take care of every aspect of your home sale completely on your own.

True FSBO owners will forego an MLS listing entirely, and instead will list on free sites, like Zillow’s For Sale By Owner option.

However, bear in mind that even though you’ll save on commission fees, getting a great deal on your house takes skill. If you’re inexperienced in real estate or don’t have enough time to dedicate to selling your home, it may take longer to sell or you may have to settle for a lower price.

Full-service Realtors. They take care of every part of the selling process. They perform a CMA, market the house on multiple platforms, offer staging advice, negotiate on your behalf, and help with closing paperwork.

Typically, you’ll pay 6% in total commission fees when working with a traditional Realtor. However, commission rates are always negotiable. If you can prove your home will take less effort from the agent — for instance, if you’re in a hot market — you can persuade agents to lower their listing commission by 1% to 2%.

When it comes to real estate, there’s no-size-fits all solution. In the end, the right selling option is the one that best fits your personal preferences and financial situation. You’ll need to consider all the choices before you and weigh which is most beneficial for you and your home.