The Flat Fee commission option
The Realtor's advantage in marketing a home is: experience and that they post homes on the Multiple Listing Service and on realtor.com, creating increased buyer exposure.
By-owners can advertise on the MLS and realtor.com:
Some Realtors and also some web sites will place your home on the MLS for a small fee of only a hundred to a few hundred dollars. This means that agents can show your home to their buyers. If an agent sells your home, you will only owe a partial commission, usually 2 1/2% to 3% to this agent (as opposed to a full 5% to 6%).
This fee that gets you on the Realtor's sites is referred to as a "flat fee". By saving a home seller about 50% of a typical commission, this option is very popular in a good market. In a down market, buyers are usually afraid to venture into anything that isn’t traditional in order to get their home sold.
How it works:
You want to sell on your own but want more buyer exposure. Contact an agency or internet company that offers a "Flat Fee". You or an agent would post your home, pictures, detailed info, etc. onto the MLS and you would pay them a small flat fee - upfront.
The appeal is that you do not have to pay an agent a listing commission when your home sells - quite a money saving incentive.
Benefits: For a "flat fee" ($100-$500), your home will be on the MLS and usually, realtor.com.
Drawbacks: Limited service. You won't get a CMA (Comparative Market Analysis), which provides an educated estimate of your home's value, nor a recommended asking price. Even negotiation and closing help could be minimal.
It's a "get what you pay for" approach. It works well with sellers who have been through the process and just want more advertising/buyer exposure.
It's often referred to as "MLS Only" because getting on the MLS is really the only service you get.
Often you can arrange for more services for a higher fee. Although you won’t be getting “full service”, we work to fill that void with information 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 don’t feel you need much guidance from a listing agent, this is an option worth considering.
As with most home sales, be sure to line-up an attorney (typical cost is $350 to $500) who is familiar with real estate.
Flat Fee sites in your area:
In our commission saving resources (Your Local Resources - on the Home page) are web sites offering a flat fee to list your home. Click here to see them.
SO, WHY WOULD AN AGENT OFFER A "FLAT FEE"?
Agent gets free advertising from their sign–with their name and picture.
The agent sends out fliers to cultivate neighborhood prospects.
They meet new buyer prospects from open houses and from their for-sale sign.
The agent can sell your home and earn the buyer agent’s commission.
The agent could sell you your next house and make a commission.
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, only the agent's sign. Check your local laws. In the past, the states included were Georgia, Indiana, Kentucky, Louisiana, Mississippi, New Mexico and South Carolina.
A smart owner will only use the agent's sign. Agents are reluctant to show a home that has an owner's own sign in the front yard. They are concerned that their client will approach the owner directly and lose a potential commission.
More info on BY-OWNER SITES