How does flat rate MLS work?

Introduction

When you are ready to sell real estate, you have options, I know many of you think that you should 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 the 6%?

They do various services. The most common of these is:

1. List your property in the local Multiple Listing Service
2. Review and / or write your purchase contract.
3. Act as a transaction coordinator who follows your contract until closing.
4. They usually fix projections.
5. They will give you a sign with their number.
6. They usually provide a safe deposit box
7. Most will prepare brochures with your contact information.

On a $ 200,000 property, the commission would be $ 12,000 or more.

What do flat fee brokers do?

1. List your property in 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 contract. This is a separate fee, generally around $ 279.00.
3. Act as a transaction coordinator who follows your contract until closing. A separate fee, usually around $ 379.00
4. Establish projections around what is convenient for you and the buyer.
5. Has your own sign with your phone number as a contact.
6. You have a key box and you control who has access to it.
7. You create your own brochures with your contact number or you can obtain free brochures from a local title company or lender.

The best thing about the flat rate service is that you can choose the services you want and pay only for the ones you need.

What are you going to do with all the money you save?

If you bought all the services separately, your cost would be less than $ 1,000. If it is sold by an MLS broker and you pay a co-op fee, you would still save between $ 5,000 and $ 6,000 thousand. Since you can still sell by owner, if you could find your own buyer, you wouldn’t pay any co-op fees. This would not be an option with the 6% list. You could save more than $ 11,000. Nothing bad.

Benefits of using flat rate MLS:

1. You save time: properties tend to sell faster
2. Save money: properties tend to sell for the best price
3. You are in control: brokers have a lot of control with 6% lists
4. You can sell by owner and owe no commission. Not so with full service listings.
5. You can cancel at any time – it may or may not be true with full service lists
6. You get much more exposure to qualified buyers
7. You get thousands of brokers with qualified buyers to help you sell your home. 8. Most likely listed on Realtor.com and local MLS.

What to look for in your flat rate broker

All flat rate brokerage agencies are not the same and there are many scams. Some call their service MLS when in reality they are not even members of MLS. They cannot be licensed real estate agents. They take your money and put it on their website, but not on the Realtor MLS.

So do some research. Discover:

1. Do you have experience in selling by owners?
2. Are they a member of your local MLS?
3. Are they licensed brokers in your state?
4. Do you maintain an office locally? Do they have a local phone and address?
5. Are they easily accessible by phone, fax, email, and mail?
6. Avoid Big Franchise Companies and Multi-Level Marketing Scams

Things to do as FSBO:

1. Separate from the property.
2. Clean the house and garage.
3. Learn to organize the property.
4. Research other properties in your neighborhood so you can determine the correct price.
5. Store all valuables while at the market
6. Get brochures for your buyers

Summary

So why wouldn’t MLS Flat Fee instead of 6% full service commission? There are many reasons why people choose to go with a higher commission and I respect their choice.

I think it would be wise to first look for the flat rate MLS services in your area and then compare the two and make an informed decision.

Copyright © Wee Dilts 2010

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