Flat Fee Service Advantages
Many flat fee service providers allow the seller to advertise as a For Sale By Owner (FSBO) by using their sign and contact information in the yard. In fact, there is some degree of confusion in the market regarding FSBO signs being used on properties that are also listed in the MLS. Some MLS systems reportedly have issued a rule that disallows FSBO signs if the property is listed in their local MLS - a rule which may draw the ire of the DOJ. Other MLS systems have not.
Another significant advantage to Flat Fee is most service providers stipulate that if the seller finds his own buyer without the use of a buyer's broker, then the buyer's broker commission is eliminated, and the seller owes no broker a commission.
In certain circumstances, flat fee services also allow the use of MLS lock boxes which allow feedback directly from a buyer's broker that may show the property. Some flat fee brokers will even provide representation at closing for a much smaller fee than the normal commission.
Other advantages for the seller may include the option to cancel the listing at anytime without penalty (sellers should investigate this prior to signing any service agreement) and relist with another service provider or full-service broker, effectively eliminating any "minimum length of service" (the listing period) typically required by full-service brokers. Because MLS rules typically have strict requirements of its member brokers, a Flat Fee subscriber may not be able to terminate a listing after a contract with a buyer represented by a Realtor member of that MLS system has been ratified. The reason for disallowing termination or withdrawal from MLS under this scenario is because the entire MLS system is based on its members agreeing to cooperate with each other and ensure payment from their listing clients to each other upon closing. To allow Flat Fee listings any privileges in this regard would undermine the very foundation of the MLS system.
Read more about this topic: Flat-fee MLS
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