Which of the following statements about commission rates is incorrect?

The statement that flat fee charging is illegal in most states is incorrect because, in fact, many states allow brokers to charge a flat fee for services. This approach can provide clients with a clear understanding of costs upfront while allowing brokers to offer various pricing structures that suit the needs of different clients.

Flat fee arrangements are a legitimate and often used method in the real estate industry, especially in competitive markets where clients may prefer to pay a set amount rather than a percentage of the sale price. Both traditional commission structures and flat fees exist side by side, giving clients options based on their specific needs and preferences.

The other options describe correct practices in real estate commission structures. Brokers can indeed offer discounted commission rates to clients, reflecting the competitive nature of the market and the varying levels of service offered. Moreover, the notion that real estate commissions are negotiable is widely accepted, as most commissions can be discussed and adjusted based on the agreement between the broker and the client.