Docstoc

Flat Fee MLS Listings Is this the future of real estate

Document Sample
Flat Fee MLS Listings Is this the future of real estate Powered By Docstoc
					by: Richard Massey

Realtors are all a buzz about this new form of listing houses on the MLS (multiple listing
service). Some feel it creates more work for the buyers agent, while others see this as a way to
tap into the For Sale By Owner market.

It use to be when you made the decision to sell your home, you essentially had two methods
available to you. You could list your home with a traditional real estate company and pay 6-7%
commission or you could try selling on your own "for sale buy owner".

Research shows that nearly 50% of all home sellers start out trying to sell their property on their
own. Although some home owners are successful with FSBO, according to the National
Association of Realtors (NAR) home seller survey, only sixteen percent o f sellers actually sell
their home without exposure on the MLS. And many of them end up giving away their
commission savings to the buyer to close the deal.

Realtors tend avoid for sale by owner properties because they are working with buyers and have
no written agreement to be compensated. If the seller has not agreed in writing to pay a
commission to the agent, the buyer could cut the agent right out of the deal and negotiate directly
with the seller. It happens....

With flat fee MLS service, the seller has agreed in writing to pay a commission, usually 3%, to
the buyers agent. This motivates Realtors to bring the seller a buyer.

How it works:

Real estate commissions by law are negotiable. In a flat fee listing, the listing agent agrees to a
flat fee instead of a percentage of the sale price. This can be anywhere from $300-$600 for the
service of adding your house to the MLS. Then you choose how much to pay the buyers agent in
commission for bringing you a buyer (typically 3%). So in the sale of a $200,000 house you
would pay $6,000 plus the flat listing fee, saving a close to $5,700 in commissions. The plus side
is in the listing agents contract, the right to continue advertising you house FSBO. So in the
event you find a buyer without an agent you save on all commissions and only pay the flat listing
fee.

      What do you get with flat fee MLS listing:
      Advertise your home on Realtor.com
      Market to buyers working with a Realtor through the MLS
      Market to Buyers working without a Realtor
      Retain your right to sell your property by owner
      Avoid paying any real estate listing commission by paying a flat rate or fixed fee upfront
      Only pay a commission if a buyer's agent sells your home
      Why would a listing agent want to do this?

For real estate agents this can be an opportunity to increase revenue by listing more homes.
There are many people who refuse to use realtors because of the 6-7% commissions, but are
more than willing to pay 3%. With the increase of internet marketing, realtors can reach more
people because all they are offering is to list the house on the MLS. Services are minimal and the
listing agent really won't be trying to find a buyer for you, but rely on the buyers agents. This
allows them to list properties in a larger area and in some cases in other states.

With the increase of house prices, is the 6% sales commission going to survive or will flat fee
listings be the wave of the future. Only time will tell...

This article was posted on March 17, 2004

				
DOCUMENT INFO