What are “traditional” real estate brokerage services?

For decades, the Multiple Listing Service (MLS) has been responsible for facilitating the largest portion of home sales in America.  The MLS is essentially a member-only database of properties listed by individual real estate brokerage firms.  These real estate brokerage firms cooperatively work with other licensed brokerage firms in the network to market and sell properties.

With “traditional” real estate brokerage services, the brokerage firm, which represents you (the Seller), earns a lot of money by the receipt of a ‘commission’ (customarily 6% from the final price of a home sale).  However, the six percent (6%) commission is typically not retained by your broker (Seller's Broker) but rather equally shared with another co-operating brokerage firm, which represents the Buyer (Buyer's Broker). 

For example, if the commission is negotiated at six percent (6%), a $300,000 property will yield as much as $18,000 in real estate commission ($300,000 x 6% = $18,000), which is then equally shared ($9,000) between the two (2) agents (Seller's Agent & Buyer's Agent). 

This fee is usually justifiable as Realtors® provide not only access to a local MLS system but also advice and expertise in protecting both the Buyer and Seller best interest in a transaction.  While legal counsel is also readily available when it comes to contract negotiations, most home Sellers elect to use a real estate broker to handle their marketing and property selling affairs.

Typically with “traditional” real estate brokerage services, you (the Seller) give up your right to sell your home to a Buyer, who you have procured on your own (without the assistance of a Seller’s or Buyer’s Agent). 

Typically, you (the Seller) are still required to pay the Seller’s Agent a three (3%) commission despite procuring the Buyer yourself.