From this marketing agreement, you can quickly realize that properties don’t just magically appear on Zillow, Trulia or the MLS. It doesn't occur by fortuitous happenstance... not at all.
Properties are featured on those luxury home search sites because there’s a written listing (negotiated underwritten) arrangement signed well-before the buying public ever sees the news flyer. And the home owner has agreed in advance to pay the listing broker a commission, per that listing agreement.
Commonly, the listing broker will split the commission 50/50 with the buyer's broker, if the buyer has a broker. So, if you’re buying any property without a broker, thinking you’re getting a great deal… think again.
What’s actually happening is: the listing broker is keeping more total commission.
You might be saying to yourself…
“yeah but, what about for-sale-by-owner? Can’t I save there?”
For Sale by Owner—if you're seeing it on the MLS, Zillow or Trulia—is also an underwritten arrangement by a middleman real estate agent.
The only difference is, the listing fee negotiated with the listing broker is what’s called a flat fee (example $600). Like a newspaper ad. Only the Seller publishes it via a real estate agent who has licensed access to syndicate the listing on the MLS (which will then push the data to Zillow and Trulia).
Meanwhile, the commission to the buyer’s broker is already included in the flat fee For Sale by Owner arrangement, as I earlier explained with the Exclusive Listing Agreement scenario. There's no difference.
As an example, the Seller pays a Flat Fee to the listing broker for $600 plus a 3% negotiated commission to cover the buyer’s broker. Simple. Upfront. Honest.
It's in the signed marketing contract—well before the photographer ever shows up to take pictures for the Ad. That's how it works. And yes, the flat-fee-broker could in fact represent the buyer under the flat fee scenario.
Repeat: in a for sale by owner listed thru the MLS... the listing broker only publishes the listing for a flat fee... like a newspaper Ad.
Therefore, it's not uncommon for the flat-fee broker to earn the buy-side commission, if perhaps the buyer did not yet have a hired agent. Here's the legal language you'd find in an actual flat fee for sale by owner contract.