"Take a glimpse at the future in real estate--take the fat out of real estate commissions," reads Los Angeles area real estate firm CataList Homes' print ad that sports a "fat free" milk carton "formulated for the empowered consumer."

The ad appears to tout another fast-shoe real estate discounter. But in fact the brains behind this business is commercial realty giant Harold Ellis and the investors include Bill Millichap of Marcus & Millishap' and Chris Brahm of bainlab, a wholly owned subsidiary of international management consulting firm Bain & Co. The company has a vision of the future of real estate and it doesn't include hefty buyer-side commission fees.

Despite the industry's negative view of discounters, some sophisticated companies are eyeballing the opportunity in cut-rate commissions. For a 2 percent fee, Coldwell Banker's BlueEdge Realty dabbles in discounting by providing sellers with enough know-how and direction to embellish what would likely otherwise be a for-sale-by-owner. Publicly traded LendingTree also cuts into commission by providing buyers and sellers a HomeDepot "gift card" for as much as $4,000.

Though some of these companies use kinder words like "rebates," the idea is the same: lower fees paid by the seller.

CataList is betting that technology and Internet-accessible MLS listings have shifted power from the buyer's agent to the buyer in a move that will significantly reduce buyer-side commissions.

The company is led by a think tank of commercial realty giants who've watched technology facilitate the growth of sophisticated buyer databases that by 1999 contained the names of all buyers most likely to purchase multi-million dollar commercial properties. Sellers turned to these buyer databases and virtually eliminated the need for buyer agents, said CataList co-founder and EVP Michael Davin. He believes Internet-accessible MLS listings will similarly impact residential buyer's agent commissions.

"The industry is going to go through some changes, some of them will be smooth and some of them could be rough....Will discounters in five years threaten the business model? I would not want to be operating in the traditional format when that time comes," Davin said.

CataList's test-pilot office in Hermosa Beach will celebrate its two-year anniversary next week and according to Davin, the company has managed to secure a 5 percent market share in the high-end South Bay area near Los Angeles. The sellers-only company charges 3 percent for full-service representation, marketing and MLS exposure, including a 1.5 percent buyer-side co-op commission split. Its agents are compensated with a combination of salary and commission.

The company's milk carton marketing slogan makes no bones about the excesses CataList believes cushion the industry and Davin cites buyer-side rebates as the proof in the pudding. He questioned why sellers paid buyer's agents so they could pay buyers and suggested sellers take the extra money off the table.

"The 1 percent back to the buyer is an interesting (business model) that backs up my claim that commissions have a lot of fat in them," he said.

Skyrocketing home values have in part allowed discounters to slash commission costs. In CataList's area, the median home price is $600,000, twice what it was 1996. That boils down to an $18,000 commission today at 3 percent compared with a $15,000 commission in 1996 at 5 percent.

Davin isn't concerned about competitors blackballing the company's listings in part because the housing market is in a frenzy and buyers will find the homes on their own.

"Buyers' agents have virtually no control over their buyers. It's a rat race to find homes. The buyers are on the Internet, they're driving by open homes, yard signs, they're talking to their friends. Dead serious buyers looking in a specific marketplace doesn't sit idly by waiting for their agent to fax or e-mail a new listing, they're proactive," Davin said.

But he is aware of efforts to steer business away from his company. He said it's "reprehensible" for agents to steer business away from CataList listings for the sake of earning an additional 1.5 percent commission.

The company rewards its repeat business buyer's agents by featuring them on CataList's Web site in a "buyer's agent hall of fame" that doubles as a free referral service. CataList also tries to trim their workload by overseeing the paperwork and escrow process.

"All (a buyer's agent) needs to do is write the offer," Davin said.

Being a sellers-only firm bodes well for buyer's agents in Los Angeles' hot housing market where homes are still landing multiple offers. Each offer is treated the same because CataList doesn't profit from "double-ending" transactions, Davin said.

Those who shun CataList feel threatened because they don't have an established client base, he said. "They cry the loudest and frankly everybody knows there are too many agents in the field. The fat in the business feeds a lot of extra people."