Listing with a traditional real estate firm, you usually agree to pay a listing commission (say for example 6%) which is due at settlement and deducted from the proceeds of your sale. Half of that fee is the "listing portion" of the commission (3% in this example) and this amount goes directly to the firm that lists your home in the MLS.
The other half, the "selling portion" or "buyer agent's fee" of 3% goes to the real estate agent who procures a buyer for your home. If the listing agent sells your home without a buyer agent's involvement, their company gets the entire 6%.
Instead of paying the "listing portion" of the commission (3% of the gross sales price of your home) you pay a flat rate listing fee.
With savings like these, it's easy to see why flat rate fee MLS listing have become more popular.
With the USA median average sales prices approaching $300,000, many sellers are simply unwilling to pay a real estate agent a commission of $18,000 to sell their home. Because while 6% of the sales price of your home may not seem like a large percentage, it usually translates into a much larger percentage of your home's equity. Equity is the amount of cash you get to keep after the expenses of the sale have been paid. It's the bottom line.