- What is a flat fee Multiple Listing Service (MLS) listing?
The MLS is an all-inclusive database shared by local Realtors. Agents can access this database to search for exactly what their buyers are looking for. This one resource provides Realtors with a significant advantage over anyone who is selling on their own. In fact, over 90% of buyers find their new homes through the MLS.
Real estate companies that offer flat fee MLS listings will input the information and pictures to the MLS for a fee which varies from between $99 and $995 depending on the level of services provided. However, a fee is typically offered to an agent who brings in a buyer. This fee can be any amount by law but is typically 2% to 2 ½% versus the 6% to 9% charged for full service listings.
- What is the difference between flat fee listings and full service Realtor listings?
The owner undertakes duties usually provided by a Realtor. These include taking pictures, providing promotional copy, gathering information about the property, identifying repairs and improvements that will promote the sale and increase the return on investment, deciding on the best marketable price, monitoring the market, price adjustments if and when necessary, Arraigning showings, negotiating with buyers directly, obtain legal counsel, facilitating inspections, possible renegotiating and whatever else is necessary to bring the sale to closing.
- What services are typically provided by flat fee brokers? Besides adding your listing to the regional MLS, the listing is typically syndicated to dozens of portal websites like Zillow, Trulia, Homes.com, AOLrealestate.com, etc. plus local real estate companies directly. Owner provided pictures that are added to the MLS and portal sites. A sign &/or lock box is usually provided. Some companies provide free renewal or listings that do not expire. If available in the area, companies will often provide appointment center services which provide a convenient means of scheduling showings. With higher priced listing packages more services are added.
- What are the downsides of flat fee listings? Selling by owner is a lot of work. Over half of owners who were successful report that they would not try to sell on their own again. This is because besides the work involved it may not improve the return on investment. Realtors have years of hard won experience. If they can’t typically provide their clients with a better return on their investment than the owners can themselves they would not survive in the profession. Besides the logistics that can reasonably be handled by an owner, there is a good deal of judgment required. One misstep and the deal often falls through. Inexperience, even in new licensed real estate agents, can cost thousands of dollars or the entire sale. Most brokerages provide close supervision and training for their new agents for at least the first year. The owner does not have this essential advantage. Flat fee brokers who offer remote support cannot do so with the same expertise that a Realtor that has personal knowledge of the local market and property can. Finally, beware of invoking procuring cause claims.
In spite of the work and uncertainty involved many sellers do manage to sell on their own using flat fee broker resources to maximize their housing investment greatly.
- How to proceed.
Contact a reputable flat fee MLS broker who you can speak with directly to answer specific questions. This brief article can only provide an overview of the process.
While for sale by owner packages vary from broker to broker here are some important considerations:
- Broker should be experienced and knowledgeable about local market conditions to provide ready guidance and counsel.
- Broker should be local and able to provide market data and referrals for attorneys, contractors, inspectors, etc.
- Broker should be readily available 12/7.
- Broker should be a direct MLS member where property is located not a portal site that remotely lists properties through affiliates.
- An exclusive website should be included that sends independent buyers directly to the owner to save co-broke commission.
- Appointment center showing scheduling services should be provided at no additional cost.
- Owner should retain right to sell on their own without paying addition commission.
- Changes or pauses to listing should be provided at no additional cost.
- Listing should not expire until home is sold or taken off market by owner.
- Electronic lock box and sign should be provided and delivered at no additional cost.
- All inquires should be directed to the owner.
- Professional quality photographic services should be available.
- Owner supplied photos and videos should be enhanced by broker to the standards typically found on the MLS.
- Broker should also offer full service upgrades with flat fee credited to final commission.
- Steps to closing
- Engage local flat fee broker
- Provide details and pictures
- Approve listing on MLS and submit fee
- Arrange showing with appointment desk
- Negotiate offers
- Obtain legal counsel (recommended)
- Fulfill contact obligations. This is done with the help of the co-broker and your attorney.
- Close with more proceeds than if you had listing full service