Personally I don't see fee for service displacing the traditional commission anytime soon.

Commissions are only paid when a sale happens. I think the average consumer is not yet in favor of paying in advance or locking himself into paying on an hourly basis.

Sure there are some that are thrifty enough or computer literate enough to do a lot of their own research in neighborhoods but, like online appraisals, nothing can replace actually being inside the homes and knowing the neighborhoods that comes with experience.

Here's an example. One of my listings just sold in a neighborhood of about 80 homes that are all very similiar. My listing was priced at 204,900 and the home directly across the street is also on the market for $205,000, it has a full unfinished basement and mine does not. More potential square footage equals higher sale price right?
Not in this case. The home across the street in on an outside lot and the backyard is almost non-existent, not a great selling point for a home in this neighborhood with a very high concentration of young children. There will always be significant differences in seemingly similiar homes that have a tremendous effect on value, lot, condition, orientation, and several other factors that a price per square foot comparision will not reveal.

Additionally I believe there are many, many more "equity rich, cash poor" sellers as well as cash poor buyers out there, these people need to buy or sell but simply don't have the money to pay up front fees or retainer fees.

Maybe when Y3K rolls around fee for service will be the norm instead of the exception.