By-owner sites

C - Flat Fee: What's that all about?

By-owners can advertise on the MLS and realtor.com:

The Realtor's argument for listing your home is that they will post it on the MLS (Multiple Listing Service) and on their nationwide site, realtor.com, providing you with increased advertising.    

Some Realtors and also some selected web sites will place your home on the MLS for a small fee of only a few hundred dollars. This means you are agreeing to have local Realtors show your home to their buyers. If the agent sells your home, you will only owe a partial commission, usually an agreed upon 2 1/2%  to 3% to this agent (as opposed to a full 5% to 6%).  

This fee that gets you this additional exposure is referred to as a "flat fee". By saving a home seller about 50% of a typical commission, this option is becoming extremely popular. 

How it works: 

You decide that you want more buyer exposure.   You sign-up with a company that offers a "Flat Fee".  This company would either be a local real estate agency or an internet company that would assign you a Realtor in your area. The agent would post your home, pictures, detailed info, etc. onto the MLS and you would pay them a flat fee, upfront. 

The fee would typically be in the $300 to $500 range. The appeal is that you do not have to pay your agent a listing commission when your home sells. 

Your commission obligation is typically limited to only paying the agent who produces the buyer. The amount is whatever you agree upon to offer buyer agents (usually 2% to 3%). This is quite a money saving arrangement compared to paying a full commission (one where a 5% to 6% commission goes to pay both the listing agent and the agent that represents the buyers).

Some "flat fees" may even go up to a few thousand dollars but they still offer a significant savings over commission based pricing. When these higher fees are used, they are almost always paid only when the house is sold and closed. 

Benefits:  For a relatively small fee, your home will be on the MLS and /or realtor.com. Be sure to check to see if your house will be posted on both sites.

Drawbacks: This option is not for everyone. Do not expect much service from your assigned agent. They may not do a CMA (Comparative Market Analysis), which provides an educated estimate of your home's value, nor recommend an asking price. Even negotiation and closing help will be minimal.

It's a "get what you pay for" approach and works well with sellers who have been through the process. It's for sellers wiling to pay a smaller commission and just want more advertising exposure. It's often referred to as "MLS Only" because getting on the MLS is really what you're paying for, plus there's little expectation your agent will provide much assistance.

However, most flat fee agents will provide more services for extra payment. Although you won’t be getting “full service” using a flat fee approach, HelpingHomeSellers works to fill that void with a wealth of insider info to help you sell your home faster and for more profit.  

Key question: How much service does the traditional, full service, full commission listing agent offer–balanced against how much you'll need? If you’re an average home seller and don’t feel you need handholding from a listing agent, this is a great money saver.

As with most real estate transactions, be sure to line-up an attorney who is familiar with real estate.                       

Flat Fee sites in your area: 

Included in HelpingHomeSellers commission saving resources (Your Local Resources) are web sites where you can find out who offers a flat fee to list your home. Click here to see them.  

                      SO WHAT'S IN IT FOR THIS "LISTING AGENT"?

He or she gets free advertising from the sign–with their name and picture. 

The agent can then send out fliers and cultivate neighborhood prospects.

They meet buyers and new clients from open houses and the for sale sign.

Your agent can sell your home and earn the buyer agent’s commission.

The agent could sell you, your next home (ka-ching).

TAKE NOTE: 

Many Flat Fee programs allow you to "list your home" and also retain the right to sell by-owner, with the potential of not owing any commission. You find the buyer. You don't pay a commission.

In some states if you are listed on the MLS, you are not allowed to have a for-sale-by-owner sign in your yard. Check your local laws. In the past, the states included were Georgia, Indiana, Kentucky, Louisiana, Mississippi, New Mexico and South Carolina. You have to display the listing broker's sign, but only if you’re displaying any sign at all.