How Does MLS Work? What You Need to Know
How Does Flat Fee MLS Work?
When you are ready to sell real estate you have options, I know many of you think you have to list with a broker and pay outrageous commissions. That is not true. You can sell by owner or you can sell by owner and take advantage of Multiple listing services as well.
Let me compare the two services for you, then you decide.
What do brokers do for 6%?
They do a number of services. The most common of these is:
1. List your property on the local Multiple Listing Service
2. Review and/or write your purchase agreement.
3. Act as a transaction coordinator who follows your contract through to closing.
4. They usually set showings.
5. They will give you a sign with their number on it
6. They usually provide a lockbox
7. Most will prepare flyers, with their contact information on it.
On a $200,000 dollar property you commission would be $12,000 or more.
What do flat fee brokers do?
1. List your property on the local Multiple Listing Service for a Flat Fee, usually around $200.00 Some services charge considerably more than that. Do some research to find the best service and the best price.
2. Review and/or write your purchase agreement. This is a separate fee, usually around $279.00.
3. Act as a transaction coordinator who follows your contract through to closing. A separate fee, usually around $379.00
4. You set the showings around what is convenient for you and the buyer.
5. You have your own sign with your phone number as contact.
6.You have a key box, and you control who has access to it.
7. You create your own flyers with your contact number or you can get free flyers from a local title company or a lender.
The great thing about the flat fee service is you can pick and choose the services you want and pay only for those you need.
What will you do with all the money you save?
If you bought all the separate services, your cost would be less than $1,000. If sold by a MLS broker and you paid a coop fee, you would still save between $5,000 and $6,000 thousand dollars. Since you can still sell by owner, if you were able to find your own buyer, you would pay no coop fee. This would not be an option with the 6% listing. You could save more than $11,000 dollars. Not bad.
Benefits of using Flat Fee MLS:
1. You save time – properties usually sell faster
2. You save money – properties usually sell for top dollar
3. You maintain control – Brokers have a lot of control with 6% listings
4. You can sell by owner and owe no commission – No so with full service listings.
5. You can cancel at any time – May or may not be true with full service listings
6. You get far greater exposure to qualified buyers
7. You get thousands of Brokers with qualified buyers to help sell your house 8. You most likely will get listed on Realtor.com as well as the local MLS
What to look for in your Flat Fee broker
All flat fee brokerages are not alike and there are many scams. Some call their service MLS when in fact they are not even members of the MLS. They may not be licensed real estate agents. They take your money and put you on their web site but not on the Realtor’s MLS.
So do some investigating. Find out:
1. Do the have experience with for sale by owners?
2. Are they members of your local MLS?
3. Are they licensed Brokers in your state?
4. Do they maintain an office locally? And do they have a local phone and address?
5. Are they easily accessible by phone, fax, email and mail?
6. Avoid large franchise companies and Multilevel Marketing scams
Things you need to do as a FSBO:
1. Detach from the property.
2. Clean house and garage.
3. Learn how to stage the property
4. Research other properties in your neighborhood so you can price it right.
5. Put away all valuables while you’re on the market
6. Get flyers for your buyers
So why wouldn’t you do Flat Fee MLS instead of full service 6% commission? There are lots of reasons people choose to go with a higher commission and I respect their choice.
I think you’d be wise to look into Flat Fee MLS services in your area first and then compare the two and make an informed decision.
Copyright © Wee Dilts 2010