Flat Fee MLS
With ListSmartTexas, home sellers are able to save at
least 3% in traditional real estate commissions minus the flat
fee paid upfront. For decades now the Multiple Listing
Service, commonly known as the MLS, has been responsible for
the larger portion of home sales in
America. The MLS is essentially a member-only database of
properties listed by individual real estate brokerage firms.
They cooperatively work with other licensed brokers in the
system to market properties.
A lot of money is made in real estate transactions typically
by the receipt of a “commission,” customarily 6% from the
final price of a home sale. This commission is typically
divided between a selling and a buying broker. If the
commission is negotiated at 6%, it is equally divided between
the two co-operating brokers after closing. A $200,000
property will yield as much as $12,000 in real estate
commissions!
This fee is usually justifiable as Realtors® provide not only
access to a local MLS system but also advice and expertise in
protecting both buyers and sellers best interests in a
transaction. While legal counsel is also readily available
when it comes to contract negotiations, most home sellers
elect to use a real estate broker to handle their marketing
and property selling affairs.
A few years ago, many licensed real estate brokers and MLS
service providers began to offer a “Flat-Fee” MLS selling
model. Essentially, it does away with the listing agent and
his customary 3% listing fee for representing and marketing a
seller’s property. The seller now has access to the Multiple
Listing Service by virtue of paying a flat-fee instead of a
full 6% commission and is allowed to carry on the sale of his
or her own home and the option to pay only 3% to an agent who
produces a qualified buyer.
In spite of many opinions on this subject, flat-fee MLS services
and brokers have proliferated across the
United States and have developed growing popularity among
die-hard for sale by owners and sellers who simply can’t
afford to pay a full 6% commission off their equity. Since
most homes are sold through the MLS, many FSBOs, jargon for
“for sale by owners” seem to like this new selling method and
are willing to pay flat-fees ranging from $499 to $899.
The system seems to benefit many agents working with buyers
since they can often pick up additional transactions by
helping the flat-fee seller purchase another home, thus
creating an additional source of income. Many home sellers,
however, continue to use the professional services of a real
estate agent for convenience, expertise and advice.
Flat-fee programs not only offer access to local MLS systems
but also to the high-traffic Realtor.com site. With 85% of
homebuyers now using the Internet to look for homes, it makes
sense to have as much online exposure as possible.
In conclusion, flat-fee services are not a replacement for the
services of traditional real estate agents or legal counsel
but the Internet and providing limited real estate services
has made it possible to change the one-size-fits-all mentality
when it comes to the typical real estate commission structure.
How
Does Flat Fee MLS Work?
Our Flat
Fee MLS services provide increased exposure without many of
the supplemental services offered by full-service listing
companies. It is up to you to handle showings, open houses,
negotiation, closing, etc. Since we know where our
responsibilities begin and end we can provide our services for
a small fee. We believe this is the natural evolution of the
real estate industry. Home sellers now have more options then
ever before. In fact, we're surprised the old system survived
for so long without a serious challenge. Here in the 21st
Century, we are about efficiency, speed, and cost. The
Internet is what makes this evolution in real estate possible.
The
service we provide accounts for the listing side of the
transaction. It does not account for the buying side of the
transaction. If an agent is involved (if they procure your
buyer) you will have to pay that agent's broker a commission
at the time of closing. This commission is commonly referred
to as the co-broke. We recommend the co-broke be 3% of the
sale price. However, you are free to offer what you choose.
Keep in mind that most realtors will only show those listings
that offer a competitive fee to most of the other homes in
MLS.
It gets
better. Unlike most real estate listings, our Flat Fee MLS
allows you to retain "for sale by owner" status. This means
that you can advertise your property in any way that you think
will help you find a buyer. If you find a buyer yourself you
don't owe the 3% co-broke fee to anyone. For example, if a
buyer sees your listing and contacts you directly, with no
other agents involved in any way, then the co-broke commission
does not apply. The same goes for any buyer who sees your yard
sign or your listing on our site, so long as you deal directly
with the buyer and not an agent.
Flat
Fee MLS vs. FSBO?
Our
services provide greater exposure than traditional For Sale By
Owner (FSBO) marketing services. The cost savings can range
from good (you pay our flat fee + selling agent commission)
when an agent is involved in the transaction, to great (you
pay only our flat fee) when you deal with the buyer directly.
Listing your home on the MLS not only increases your exposure,
it also opens up a large pool of buyers who use real estate
agents and generally avoid FSBO listings. Remember, a lot of
buyers peruse Realtor.com who aren’t working with an
agent and could easily call you directly since that is what
the instructions are in the MLS remarks section.  |
