The rise of flat fee buyer agent brokerage

[Carlos Ptriawan]

Considering the current circumstances, what is stopping me if I create brokerage that is offering buyer agent only with flat fee of 5k-10k ? My job is to submit bid and negotiate only.  Buyer go to open house directly.

[Stuart Udis]

Most attention has been directed towards buyers and buyer agency in response to the agreed upon settlement which introduces the possibility of fee shifting depending on whether a cooperating fee is offered. However, expect greater transparency and heightened consumer awareness that has come out of media attention and NAR settlement to impact the listing component of seller agency as well. Lost in all of this has been the significant role technology now plays in listing and selling real estate. I am not knocking listing agents, but majority of their time and effort is spent getting the listing. Once the property is on the MLS, it is visible through any number of consumer websites. Expect to see more brokerages reduce their fees for listing real estate as they move towards fee models that not only recognizes but accounts for the role technology plays. Especially now that consumer awareness and knowledge is at an all time high, expect the consumer to arrive at this same conclusion and ultimately demand this. I beleive offering buyer agency fees will ultimately be where sellers should allocate most of their marketing money, not in listing fees.

[Carlos Ptriawan]

Quote from @Stuart Udis:

Most attention has been directed towards buyers and buyer agency in response to the agreed upon settlement which introduces the possibility of fee shifting depending on whether a cooperating fee is offered. However, expect greater transparency and heightened consumer awareness that has come out of media attention and NAR settlement to impact the listing component of seller agency as well. Lost in all of this has been the significant role technology now plays in listing and selling real estate. I am not knocking listing agents, but majority of their time and effort is spent getting the listing. Once the property is on the MLS, it is visible through any number of consumer websites. Expect to see more brokerages reduce their fees for listing real estate as they move towards fee models that not only recognizes but accounts for the role technology plays. Especially now that consumer awareness and knowledge is at an all time high, expect the consumer to arrive at this same conclusion and ultimately demand this. I beleive offering buyer agency fees will ultimately be where sellers should allocate most of their marketing money, not in listing fees.

[Sebastian Bennett]

I've been thinking about getting a real estate license. Not necessarily to represent buyers and sellers but more so for my own research. Do you believe it will now be more cost effective to hold a license or do you believe the expenses will go up with what I assume will be a flight from the business by low producing real estate agents?

[Russell Brazil]

Quote from @Sebastian Bennett:

I've been thinking about getting a real estate license. Not necessarily to represent buyers and sellers but more so for my own research. Do you believe it will now be more cost effective to hold a license or do you believe the expenses will go up with what I assume will be a flight from the business by low producing real estate agents?

 Expenses are about to go up considerably.

[Manny Vasquez]

Quote from @Sebastian Bennett:

I've been thinking about getting a real estate license. Not necessarily to represent buyers and sellers but more so for my own research. Do you believe it will now be more cost effective to hold a license or do you believe the expenses will go up with what I assume will be a flight from the business by low producing real estate agents?

 If you are getting a license just for "research" purposes, save your money.  There are many, many tools out there that you can use that don't require a real estate license.

[Brian Kloft]

Quote from @Carlos Ptriawan:

Considering the current circumstances, what is stopping me if I create brokerage that is offering buyer agent only with flat fee of 5k-10k ? My job is to submit bid and negotiate only.  Buyer go to open house directly.

Why would a buyer pay you $5-10k and have to go to open houses only? They would miss out on seeing a big percentage of the houses on the market. 

[Mark Brown]

Quote from @Carlos Ptriawan:

Considering the current circumstances, what is stopping me if I create brokerage that is offering buyer agent only with flat fee of 5k-10k ? My job is to submit bid and negotiate only.  Buyer go to open house directly.

So I think there could be plenty "stopping you". For one is that an appropriate price point for the supply/demand curve intersection? Is this job worth this flat fee without any value being demonstrated. This means you essentially have to save buyers 3x(5k-10k) = $15k to $30k through negotiating, finding the best deals, adding value with your property management or contractor contacts, etc.

Lawyers use flat fee, hourly, and contingency pay structures primarily. 

In place of a flat fee I can see the transition being something based on referral (did my buyer agent get me a trades person, lender, home inspector, etc. I couldn't have gotten myself?) or best on deal value add (how many offers did I need to submit before going under contract? Did I have to waive many contingencies? Did my realtor not even advocate for me?)

[Sebastian Bennett]

@Russell Brazil Why do you expect expenses to go up? I appreciate your insight on these forums, thanks in advance!

[Russell Brazil]

Quote from @Sebastian Bennett:

@Russell Brazil Why do you expect expenses to go up? I appreciate your insight on these forums, thanks in advance!

E&O insurance, MLS fees, electronic lockbox fees, association dues, contract fees, every software agents use.

Many of these fees could be close to doubling by the end of 2026.

[Russell Brazil]

Quote from @Russell Brazil:

Quote from @Sebastian Bennett:

@Russell Brazil Why do you expect expenses to go up? I appreciate your insight on these forums, thanks in advance!

E&O insurance, MLS fees, electronic lockbox fees, association dues, contract fees, every software agents use.

Many of these fees could be close to doubling by the end of 2026.

 My bad. You said, why, not what.

Because there is going to be a large drop in licensees. Less licensees paying into the pot means everyone's costs go up. Combine that with insurance raising rates not just for dropping licensee count, but also to cover increased lawsuit risks.

[Nadiyah M.]

Quote from @Sebastian Bennett:

I've been thinking about getting a real estate license. Not necessarily to represent buyers and sellers but more so for my own research. Do you believe it will now be more cost effective to hold a license or do you believe the expenses will go up with what I assume will be a flight from the business by low producing real estate agents?

 I wouldn't recommend this for research purposes.  Holding a license requires fees.  You can simply build a relationship with a great Real Estate agent or sign up for Propstream. 

[Michael Smythe]

@Carlos Ptriawan doubt many would hire you based upon exactly what you've proposed!

If it was me, I'd look at it this way:

1) Paperwork: I can hire an attorney at an hourly rate to write up a purchase contract, etc. 
-So, I'd only be willing to pay you a flat fee for that service that is CHEAPER than an attorney.

2) Negotiating Price: theoretically, I can negotiate myself and MAY just need someone to communicate my offer(s) to seller. Not sure how well any given agent can actually assist a buyer in negotiations. If you actually can, then "put your money where your mouth is" and I'd only expect to pay you a percentage of what you could actually save me.

3) Property Tours: not sure who much value you could add to #2 above if you didn't walk thru a property?

I wouldn't have any problems paying an agent under terms like this for their service(s).

[Carlos Ptriawan]

Quote from @Michael Smythe:

@Carlos Ptriawan doubt many would hire you based upon exactly what you've proposed!

If it was me, I'd look at it this way:

1) Paperwork: I can hire an attorney at an hourly rate to write up a purchase contract, etc. 
-So, I'd only be willing to pay you a flat fee for that service that is CHEAPER than an attorney.

2) Negotiating Price: theoretically, I can negotiate myself and MAY just need someone to communicate my offer(s) to seller. Not sure how well any given agent can actually assist a buyer in negotiations. If you actually can, then "put your money where your mouth is" and I'd only expect to pay you a percentage of what you could actually save me.

3) Property Tours: not sure who much value you could add to #2 above if you didn't walk thru a property?

I wouldn't have any problems paying an agent under terms like this for their service(s).

 So this is not something new, I've used Flat Fee agency before and I know how these guys are working.
It' small shop operation, 3-6 guys, with 1 TC. No open house offered, no problemo. Paperworks is not problem because to submit the bid we only need to get one docusign template. It's standard contract. There's always typical question like contingency etc etc, that's easy to solve.  Negotiation, I could use zoom/webex meeting and give advice. Flat fee Buyer agent never needs to go to the house itself. Everything is done by buyer. If they want referral, I can give some names, but they can take a look at themselves too.

So in reality, buyer agent is doing like transaction coordinator only. I can still do my other job, LOL. 

[Carlos Ptriawan]

Quote from @Nadiyah M.:

Quote from @Sebastian Bennett:

I've been thinking about getting a real estate license. Not necessarily to represent buyers and sellers but more so for my own research. Do you believe it will now be more cost effective to hold a license or do you believe the expenses will go up with what I assume will be a flight from the business by low producing real estate agents?

 I wouldn't recommend this for research purposes.  Holding a license requires fees.  You can simply build a relationship with a great Real Estate agent or sign up for Propstream. 

well yea, i used to use software like propstream and i've been telling you folks I know my market much way better than my licensed real estate agent. Usually my agent is the one asking me to how to calculate ARV and find cost to fix the bathroom,etc. With software like propstream I can even look at seller mortgage details and MLS private remark.

Getting license you only know the legality aspect of being an agent but doesn't necessarily means you would be a smarter one to get to know the market.

The only thing that I can not do with propstream is I can not download all disclosures when I try to purchase. But I can always ask listing agent to send the link to me.

Usually I am analyzing 2-3 disclosures every other week before I even visit the property. Most of the time it's "mehhhh"....

I can literally selling this service to buyer lol

[Rick Albert]

There have been brokerages offering flat fees and failed. One example is Purple Bricks. They barely lasted in California (they are based on London).

The challenge is (1) you are assuming all listings have open houses and (2) there are a lot of moving parts that can happen behind the scenes. It will ultimately depend on price point and what level of service you want to provide. 

I don't know of any top producing agents who are with discount brokers. This is mostly because they can't provide the high level of service that Buyers deserve and for now Sellers are still generally paying. 

I think there will be a market for it and you will gain some market share, but I don't think there will be tons of profits coming in.