Flat fee MLS listing gives home sellers the edge in today's competitive real estate market
When you hear about real estate brokerage you probably think about the typical, traditional real estate agent who provides a bundle of real estate services in exchange for a commission when the house or property sells. Occassionally you might receive calendars or refrigerator magnets from these types of agents performing annual neighborhood farming or canvassing campaigns. Typically these agents receive about 5-6% of your home's selling price when it sells.
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Five or six percent may not seem like a huge amount of your property's sales price, but when you consider that it's estimated that most American's have less than 40% equity (the difference between the market value and upaid mortgage balance on a home) in their homes today, that number becomes a lot bigger proportion of the actual cash value you have in your property. With home equity declining by more than 60% during the recent recession, the median home priced at $173,200 has an average of only $69,280 in equity (or 40%). Many, of course, have much less. But even at that number, a commission of 6% represents 15% of your home's equity! That's a lot to give away to an agent whose commission isn't based on how long it takes them to sell your house or even how much money they spend to market it. You might be better off paying a flat fee to list your property in the MLS and keeping that 15% for yourself.
Online flat fee MLS listing is a real estate brokerage model that's been around since 1997 and has been responsible for millions of homes sold nationwide. With flat fee MLS, instead of paying a real estate commission at settlement, you pay an up-front fee to list your property in the local or regional MLS that services your property's area. With flat fees ranging from $200 to $500, a sale of your home using flat fee MLS listing could save you $9,000.00 on a $300,000 home.
Why Flat Fee MLS
While the commission based model still stands as the most prevalent method of selling in the U.S., the flat fee mls listing model that seems to be getting a lot of attention. Considering that the most important service that a real estate agent can provide is marketing exposure for your property, and that the way real estate agents primarily market real estate is through the MLS, and that over 80% of homes sold nationwide sell through the MLS, a listing in the MLS is obviously a critical factor in selling your home. If you could list your home on the MLS without having to pay a commission of 5-6% of your property's value, it stands to reason that you could save thousands, if not tens of thousands of dollars (depending on your property's sales price), selling your home using flat fee MLS.
Of course, there will be a little more work on your part with flat fee MLS listing, but maybe not as much as you think. The way real estate agents avoid having to attend every showing of their property listings is by using a 'key lockbox'. The lockbox allows agents to show prospective buyers the home without the listing agent having to attend every showing. You can purchase a lockbox along with your flat fee MLS listing and let the agents who are state licensed members of the MLS show the property while your at work or away. When they bring you a contract, you can review the contract with an attorney, or pay a transaction broker to review, prepare and negotiate the contract on your behalf.
Why not FSBO?
Every year thousands of home sellers attempt to sell For Sale By Owner (FSBO) and about 85% end up handing their listing over to a real estate agent after wasting valuable selling time. Selling a home is akin to selling any commodity - just like stock in a company. You wouldn't try to sell your shares in IBM without the New York Stock Exchange, right? Trying to sell a home without an MLS Listing is like trying to sell stock without the stock exchange. You've got the commodity, but you're missing the market. You might be able to sell given enough time, but you would certainly be selling for less than you could have realized had you had been exposed to the entire marketplace of buyers. If you want to sell real estate for the best possible price, you need to list on the Real Estate Exchange - the MLS. The MLS is THE market for real estate.
The Effectiveness of Flat Fee MLS
Recent studies show that home sellers who use MLS entry only listing services, can actually net more money from the sale of their homes than sellers who used traditional listing services. Flat Fee MLS Listing gives your home the exact same marketing exposure enjoyed by homes listed by Realtors® in the Multiple Listing Service. The greater marketing exposure provided by a flat fee MLS listing translates into higher demand for your property and ultimately a higher sales price and more net equity for you.
