Flat Fee or Full Commission Real Estate?

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Buyers and Sellers of real estate today have many more options then they did in the past. Not only can you go FSBO, or with an agent, you now can pick from a variety of agent options. While the trend of late has been a reduction in commissions from the full 6% of past times to 5% and below, the newest mania is in flat-fee commissions. Help-U-Sell and others use this commission strategy.

The full-commission companies claim “you get what you pay for,” in their downplaying of flat-fee companies. They will tell you that you won’t get the same level of service, and that you won’t get the top price that they can get you.

I haven’t used a flat-fee company to do any deals, but I’ve definately had my share of bad agents work with me and charge steep 6% commissions. I’ve seen agents making hundreds of thousands of dollars a year in commissions treat their clients like they were a dime a dozen.

I recommend everyone keep all their options open when considering real estate companies to work with. Don’t let the big brokers scare you away form the new – smaller companies. It is the same tactic the big brokerage firms used when E*Trade, Ameritrade, and the other online discount brokers started to steal market share. Just make sure you know what you’re getting when you interview an agent, and you’ll be fine.

If you’ve got an opinion on the subject, feel free to leave a comment below . . .

Note By BiggerPockets: These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.