"You get what you pay for"
I am not a "flat rate" broker but also respect the consumers right to choose who they do business with. If a consumer is fully aware and educated of the buying process, choosing a "flat rate" broker may have some advantages. Using one without an understanding of the buying process can have dire consequences and lead to much frustration.
I don't get paid by a buyer. I don't charge buyers for information so, "you get what you pay for" would seem to make my services worthless. You don't pay me so you must get nothing in return. A "flat rate broker" appears to be paying you so.....Does it make them less than worthless since not only are you not paying them, they must pay you in order to gain business? Depends on your point of view.
When offering on a property with someone who is simply submitting an offer based on your direction, you could end up paying more for the property than necessary. If you are a very educated buyer, this may not end up being the case but, an overlooked part of the process is the negotiation between the "buyers agent" and the sellers agent. I know when an offer is being presented by a "flat rate broker", an uneducated agent, an uneducated buyer or....all three. It is my job to know. When representing a seller, it is my fiduciary responsibilities to know and, to get the highest and best price and terms for my client. When representing a buyer, my responsibility is to obtain the lowest price and best terms possible.
The buyers motivation, when representing a seller, is an important part of determining how the seller will....or will not, respond. Buyers that are using a "rebate" type program to make offers, in my opinion, will pay more. They pay more, in the majority of cases I have seen, because they seem to be more concerned with the rebate than the actual price. This is a very good thing for my seller so, when I am representing a seller, part of my marketing includes direct marketing specifically to "flat rate" and "rebate" brokers and agents. Since their buyers seem to pay more, in exchange for a very small percentage "rebate", my sellers can make more, I make more and everyone is happy. Well, everyone that I am concerned with anyway.
The negotiation process is so much more than submitting an offer. Many deals are made simply because of the agents reputation, the agents ability to negotiate and how they present an offer and, the timing of the offer. Aspects that could be missing when using a "flat rate" or "rebate"based brokerage.
Do I discourage use of "flat rate" or "rebate" brokerages? No. I respect your choice and understand that you have your reasons for doing so. To answer your question about hiring an attorney when using those services....YES. Consider this though: Doesn't increasing your costs by having to hire a competent real estate attorney outweigh any advantage you may perceive buy using a "rebate" agent? If you are also considering finding a "rebate" attorney, you may want to rethink the advantages.
Use your rebate agent of choice, hire a competent and experienced real estate attorney (They wont be cheap if they are good at what they do) and let us know how things turn out. Remember also that, most sellers, will view a transaction involving an attorney in a very different way. If one of my clients is considering a transaction involving an attorney, my first suggestion is that they also hire an attorney. This will increase their costs and will be reflected in our counter offer back to the buyer.