I’m often asked if there is really any difference between flat fee companies and whether there’s anything to compare, other than price, when selecting a flat fee MLS provider. The answer, of course, depends on the owner/seller’s motivation. If you just want to list or advertise your property for sale in the MLS, then cost really is your only concern. However, if you want to actually sell your home, then here are some other factors to consider:
- How long has the company been in business?
The market does a pretty good of weeding out bad eggs. If a flat-fee MLS broker has been in business for a number of years, there’s at least some reason to believe that other sellers have found them to be trustworthy and capable of doing what they say they’ll do. Especially if they’ve survived a couple of down markets and the recent real estate recession, the company has established a business that’s robust enough to succeed regardless of market conditions. Since the real estate market downturn, lots of agents have taken to flat-fee MLS listing just to be able to stay in the business. So new flat-fee MLS listing companies are poping up everyday. However, if the company just started last month and they can’t give you the names or addresses of lots of other properties they’ve actually SOLD, they probably won’t be able to provide the level of service and support you need. Their track record for successfully assisting by owner sellers hasn’t really been established.
- What kind of support do they provide?
A good flat-fee company should provide several methods of support. While most online companies want to communicate through email, this may not be the method that works best for you. Top online flat-fee MLS listing providers, like Bloomkey.com, offer telephone support, an Online Help Desk, Online Chat and dynamic FAQ’s so that you can get the support you need when you need it.
- What other websites will your property appear on and what strategic partnerships have they established? A good flat-fee company should be able to have your home or property listed on ALL of the leading real estate websites. Since over 80% of buyers now start their search for a home online, it pays to be listed everywhere buyers might be looking. While all flat-fee brokers list properties on Realtor.com and the Broker IDX by virtue of the MLS feed distribution, few have taken the time to establish relationships and proprietary RSS/XML feeds to the larger real estate portals like Trulia.com, Zillow.com, Yahoo Real Estate and GoogleBase, to name a few. Bloomkey has even created an automated posting system on Craigslist to provide your property with an HTML formatted advertisement on the world’s largest classified website.
- What other tools does the broker provide to help make sure that your property not only gets listed, but has a better than average chance of selling?
Any agent who has been in the business for any length of time (or owner who has sold a number of properties) will tell you that it takes more than a sign in the yard and an ad in the MLS to sell a home. If you take the average online flat-fee MLS company today, you’ll find that most of them offer little more than the opportunity to take your money online and stick your property’s data and photos into the MLS – never to be heard from again. They’re really more like online business cards with a cash register. Very few have gone to the expense and trouble of creating feature-filled back end web applications that give sellers access to online real estate selling tools and services to assist with the home selling process.
These are just a few of the questions owners should be asking when determining with whom to list their properties. Remember, anyone can list your home for sale, but that’s probably not where you want it to stop. A successful sale requires more than minimal effort – especially in today’s buyer’s market.
For more information on what top flat-fee MLS listing companies can provide in terms of service and benefits, visit Bloomkey.com
About the Author
Lawrence Bunnell is a partner at Bloomkey. In 1997, Mr. Bunnell co-founded the first national online real estate brokerage (and the first real estate company to ever become licensed in all 50 states). He has been responsible for creating several online flat fee real estate companies and is largely responsible for the advent of the Internet based flat-fee MLS listing segment of the real estate industry. Mr. Bunnell started his career in real estate in 1984. Prior to creating the online flat-fee MLS listing industry, Mr. Bunnell was one of the nation’s top selling real estate brokers at the RE/MAX, ERA, and Coldwell-Banker real estate franchises.
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When home sellers start looking for advice on how to choose a real estate agent, there’s plenty of it available:
- take the time to talk with different agents
- look at agents’ websites
- make sure that the agents you are considering offer the services that you are looking for
- make sure that your home will be listed in the appropriate MLS
What many people don’t realize when they are thinking about selling with flat fee MLS and choosing a flat fee broker is that it’s a good idea to do your “homework” there too.
Make sure that you look at the experience the broker has and take the time to become aware of the different services that are available to you. Know which MLS (or which services) your home can be added to. Check the reputation of the service by looking into testimonials from past clients.
Choosing the right flat fee broker can ensure that you have a great experience selling your home.
The competition between traditional agents and limited service companies increases
With the slowing real estate market nationally, the battle for listings is getting more intense. Consumers have more options than ever before and are weighing them before making any decisions. It is no longer a given that homeowners are going to enlist the services of a full service broker as the number of online flat fee MLS brokers, real estate discounters and for sale by owner forums have increased drastically over the last 5 years. With all the choices the debate begins which method is better? Full service brokers argue they offer a more focused marketing campaign, while flat fee MLS brokers argue the sellers are paying too much for the negligible marketing difference. Flat fee brokers save sellers thousands in equity, but full service agents claim they are worth the 5-6 percent. Ultimately, the debate will be settled by home sellers over time and only then will we see what the end effect of technology has had on the industry.
Real estate websites report marked increase in website traffic
Statistics have indicated that 80 percent of home shoppers begin their search online. comScore Media Metrix released its monthly analysis of consumer activity at top online properties and categories today. Among the top trends in April was the increased traffic to real estate sites, up 12 percent from the March, and up 23 percent from a year ago. Peter Daboll, CEO of comScore, says interest "ballooned" due to overal angst in the market and new industry web site innovations. As inventories and rates have risen innovations like flat fee MLS companies, discount realtors and home valuation sites have been the benefactor. This marked increase in real estate website traffic only proves the trend in the real estate industry is toward consumer control. This consumer control is attainable on both sides of the transaction. Flat fee brokers and discount brokers are providing expansive marketing advantages to home sellers in a cost effective while home buyers are afforded the opportunity to enjoy open houses from the comfort of their own PC via virtual tours and multiple photo showcases. The industry is changing and here are some numbers to back it up.
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Maximize your marketing efforts without sacrificing thousands in commissions
A recent article published by CNNMoney.com provided tips for home seller and home flippers, but to my disappointment was very outdated and stale. As a proponent of choice and alternative to the traditional real estate model, I had to completely disagree with the advice to hire a full service agent. One thing I do think she was right about is homeowners "hate the idea of parting with 6 percent of [their] home’s value." Especially when there is growing awareness of discount realtors and flat fee MLS companies that serve as a much better avenue for home sellers to capitalize on marketing exposure in a "tougher environment" while maximizing their equity. When a home owner has to fork over 6 percent of the sales price of their home at closing you better believe that is being reflected in the asking price, which as the article stated is the most important aspect to getting the home sold. Because flat fee MLS charges a low, one-time fee to list the home in the MLS, homeowners are saving 3 percent at a minimum during the sales transaction freeing them to price their home far more competitively than anyone listed with a full service broker.
While a full service agent may run classified ads or send postcards to neighbors, flat fee brokers provide an MLS listing whereby the home will get the same marketing exposure through public websites like realtor.com for the low fee freeing up additional pocket change for the seller to run ads themselves where they have the opportunity to attract unrepresented buyers and save on the full 6 percent of broker commissions. As the industry continues to see lower sales prices, sellers should be encouraged to seek alternative models that provide similar exposure without sacrificing thousands in commissions.
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Alternative models are a growing Trend in real estate
Finally a front page article addressing the changing trend in the real estate structure. The USA Today just published an article detailing the different advantages of discount and flat fee brokers, as well as the advantages of having your home published on the internet. It seems the USA Today has hit the nail on the head with their recent title "It’s always ‘Open House’ as real estate goes online." As home owners become more familiar with the sales transaction courtesy of the internet, savvy home sellers are turning to alternative models like discount MLS brokers and flat fee MLS brokers that provide services on an a la carte basis while allowing sellers to maintain all the rights of a For Sale By Owner. With flat fee MLS the home seller maintains control over the transaction and can monitor who sees the home and how quickly inquiry calls are returned. There is no waiting for the agent to, hopefully, do the work.
As discount brokers and flat fee MLS companies gain market share realtors continue to work to persuade state lawmakers to pass laws limiting the ability of the agents to give rebates or offer services on an a la carte basis.
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Virginia turns to Buyers’ market
Virginia home sales have dropped 12 percent from March 2005 marking the seventh consecutive month of decline. While some areas reported increases in the number of closed transactions overall the state declined. "Home price appreciation is cooling with a single-digit change in median price appreciation from last year" according to VAR President Kit Hale. Inventory is up and urgency is down leaving buyers with more choices and a longer timeframe for decision making. In a buyers’ market sellers flat fee MLS can be an advantageous way to market a home for sale. Flat fee MLS allows a seller to keep the most equity from there home sale, so in a buyers’ market when prices may drop flat fee MLS provides maximum equity. Not only that, but flat fee MLS provides a way to strategically price your home more competitively than other homes in the area compensating for exaggerated realtor fees. Pricing is not the only advantageous tool of flat fee MLS and flat fee brokers, as virtual tours, multiple photos, and public websites are another perck of flat fee MLS.
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Flat fee MLS brokers can save home sellers thousands
Don’t give away your hard earned equity unnecessarily! 6 percent is alot of money to sacrifice when chances are you could have sold your home on your own. While it is true over 75 percent of homes sold are sold through the MLS, you can choose to utilize the MLS and MLS listings all the while retaining your rights as a for sale by owner. Selling your home is a lot easier when you can broaden its exposure through time tested avenues like the MLS. With flat fee MLS, and flat fee brokers you can capitalize on the marketing exposure offered by the MLS and still save up to 6 percent. In order to enter the realtor MLS you must offer some incentive, or compensation, to any agent providing a prospective buyer. But with the additional marketing exposure your home will receive from public websites through its inclusion in the MLS it is likely you could sell your home with no agent involved saving 6 percent of your equity.
Maximizing your marketing efforts
When getting your home sold an MLS Listing is crucial. Placing your home for sale with a Flat Fee MLS broker can be a cost effective way of advertising the home to thousands of potential customers. MLS listings not only reach those realtors in the listed area but also reach the public through websites like Realtor.com. With a flat flee broker the cost to list a home is just a small fraction of the cost of marketing through classifieds and other print ads, not to mention the 5-6 percent traditionally rendered to list in the local MLS. With available enhancement packages, the broker can post open houses, multiple photos, customized remarks and showcase your home on websites like Realtor.com.
As the number of home buyers beginning their home search on the internet continues to grow, be sure you are taking advantage of the available avenues to better expose your home and the best method available is the Multiple Listing Service (MLS).
Realtor.com tallies more unique visitors than any real estate website
The internet’s effect on marketing homes for sale is nearly immeasurable. If your home is not listed on public websites like Realtor.com through your local MLS there is literally no telling how many potential buyers are missing your home…35 million? If real estate commissions are the deterrent for listing your home with an agent, than enlist the services of a flat fee broker in order to maximize the marketing potential. By taking advantage of flat fee MLS brokers you will be marketing your home in the local MLS, in turn getting the marketing exposure of public websites like Realtor.com and local brokerage websites – Realtor.com alone receives more than 35 million unique visitors monthly. Moreover, Realtor.com’s enhanced listing tools allow you to customize your remarks, customize your listing headline, display multiple photos of your property and advertise open houses, drastically enhancing the chances of selling your home to an unrepresented buyer saving you additional thousands in commissions on the buyer side of the transaction.
Industry Vets Move to Discount Brokerages
The former CEO of Realtor.com and executive for Remax International, Steve Ozonian, is just one of many real estate veterans leaving the old for new. Because the internet has empowered its consumers, flat fee MLS and discount brokers are assuming a larger market share in the industry. Consumers are aware of the added control they can assume during the home sale/purchase transaction bringing question to the current commission structure. Though some consumers see no problem with the commission structure of 5.5% to 6%, consumers should not have to use the current model. The offerings of flat fee MLS companies and discount brokers are providing services as they are wanted – you pay for what you get, not pay for what you don’t want or need.
Given the state of the MLS systems it is likely they will become more consumer friendly and less guarded. The Department of Justice is working to ensure the National Association of Realtors doesn’t discriminate against any form of competition. Advisory boards are currently in meetings to discuss the future of the MLS display of information. If the MLS information becomes even more consumer available, then it is likely we will see a continued growth in market share for flat fee MLS brokers and discount brokerages.
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The Advantages of Flat Fee MLS
With the changes in the housing market sellers are beginning to see more negotiation situations, fewer multiple offer situations, more days on market, and some listings are just not selling. Beat the changing market trend with a flat fee MLS broker. The following are the top reasons to use a flat fee broker when selling your home.
- You maintain complete control over your home sale. With flat fee MLS you will know which agents are showing your home, you set your own price, and you set your own Buyer Agent commission.
- You can market your home locally in newspapers and other print ads, just as any traditional agent would, without having to shell out 6% in commissions when you sell.
- You will capitalize on the marketing exposure offered by the Multiple Listing Service for a low fee. Statistics show over 75% of homes nationally sell through their local MLS.
- By listing in the MLS your home will appear on websites like Realtor.com, Yahoo! Real Estate, WallStreetJournal.com, and AOL.com. Your home will also appear on all brokerage websites participating with the MLS. With this added marketing exposure you are drastically improving the chances your home could sell to an unrepresented buyer saving you thousands more in commission on the buyer end of the transaction.
- Your asking price can reflect the 3% you are saving on the listing side of the transaction. Your asking price will be more competitive than any other in the neighborhood while you still keep more equity after the sale (i.e. you can lower your asking price by 1% and still keep 2% more equity than your neighbor using a traditional agent.)
- By taking advantage of all marketing avenues offered through a flat fee MLS broker your home has a greater chance of selling to an unrepresented buyer than trying to sell your home For Sale By Owner (FSBO).
- If your home sells to an unrepresented buyer and you are listed with a flat fee MLS broker, you will keep all 6% that you would have otherwise paid out in commissions. Meaning you would save $18,000 if your home sold for $300,000. If you list your home with a tradtional agent that $18,000 goes to commissions no matter what.
Are Real Estate Commissions on the Decline?
Could the six-percent commission standard become a thing of the past? Economist Steven Levitt along with industry expert Brad Inman have reason to believe the commission structure of the real estate industry is going to change, and change drastically. With the alternative fee for service or flat fee MLS models in conjunction with the evolution of the internet and the way information is being displayed, home sellers and home buyers are ascertaining more control over the real estate transaction. With the recent development and launch of websites performing functions of a traditional agent the internet has literally become the new sales agent according to Brad Inman. It is estimated that 90 percent of the buy side work is done by the purchaser. That being said, how much longer can buyer agents expect to earn 3 percent on a sale?
Home buyers are not alone in their abilities to find useful resources and alternatives to the traditional model, home sellers now not only have the opportunity to list their homes in their local Multiple Listing Service for a low flat fee – broadening the market potential exponentially – they have the opportunity to take advantage of websites offering home appraisals, valuations, neighborhood information and advice on how to properly market their homes.
Not only is the competition becoming fiercer for traditional brokers, but they are continuing to turn more attention to the commission structure through ongoing legal battles with the Department of Justice. The DoJ has claimed real estate agents “collude to prop up commission rates through such anti-competitive actions as ‘boycotting’ the listings of discount brokers.” The DoJ has also charged that attempts by the National Association of Realtors (NAR) to raise the minimum requirements laws of the listing agent is also anti-competitive as it attempts to divest the industry of discount and flat-fee brokers.
Scott Levitt doesn’t stop with declining commission he offers his parallel to the fading profession of travel agents. With the Multiple Listing Service the main service agents offer their clients Levitt believes alternative models will win out, driving down the commissions and possibly driving out the traditional agents.
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Real estate commission eliminates limited service model
As expected, the real estate commission in New Mexico has effectively eliminated the rights of consumers in that state to purchase real estate services "a la carte". Deeming the citizens of New Mexico just too dull witted to understand and comprehend the the real estate services that they might want to purchase, the N.M Real Estate commission voted to approve a measure banning any real estate brokerage model that doesn’t provide a bundle of services and props up the traditional real estate commission model.
Opposed by the United States Department of Justice as anti-competitive and restricting to consumer choice, the rule change will go into effect in the next 30 days (apparently a real estate emergency is at hand). John R. Read, chief of the Justice Department’s Litigation III section, said, "Our view is consumers should have choices. For example, if you’re a (for-sale-by-owner) and would like to get listed on the MLS, you ought to be able to buy that service without having to buy everything else that goes along with it." Read also said, "We have found no filed complaints regarding fee-for-service brokers."
No longer will New Mexican home owners be able to sell their homes using a flat fee MLS listing service. The new rule requires that anyone who purchases services from a real estate agent also be required to purchase contract negotiation and presentation services and transaction follow-up as well.
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MLS Lion offers nationwide flat fee MLS listing
www.MLSLion.com has just added Alabama, Florida and Nevada to its growing list of states offering flat fee mls listing services. The website is now the nation’s largest cooperative of flat fee brokers offering MLS listing packages to for sale by owner – fsbo – home sellers looking for the added exposure offered through a Realtor MLS listing.
In addition to providing flat fee brokers with a national presence, the website allows affiliate brokers to send flat fee MLS listing referrals anywhere in the country. There is no fee to join and flat fee brokers pay an administrative fee when one of their packages sells through the website. There is no need for the brokers to have their own website or merchant account. Interactive templates allow affiliates to create their own offerings and even provide customers with complete MLS listing documentation at the time of purchase.
Unlike other national flat fee MLS listing websites MLSLion.com allows customers to preview the exact services for their locale BEFORE making payment. With MLSLion.com Home sellers benefit from dealing directly with the actual brokers who list their home in the MLS instead of an unlicensed website operator.
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How selling with flat fee MLS listing brokers can save home sellers thousands.
Home owners looking to save on real estate sales fees may consider Flat Fee MLS listing as an alternative to paying an agent a real estate commission of 5% or more. Unlike traditional real estate brokerage, Flat Fee MLS allows home sellers the option to sell on their own without paying a commission.
Called "Flat Fee" MLS because home sellers are able to place their homes in the same Mutliple Listing Service used by real estate agents and brokers for a one-time fee rather than paying a percentage of the sales price. The MLS is a database of homes for sale that is used by Realtor members who cooperate to sell each other’s home listings.
Because of the rise in home prices, many home owners are looking for alternatives to paying commissions that can easily equal more than the equity in a home. For a fee of somewhere between $300.00 to $1,000.00, home sellers list their home with a flat fee broker.
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Pros & Cons
Jean Chatzky, Financial Editor for NBC’s The Today Show, discusses the advantages of using Discount or Flat Fee brokers when selling a home. The significant cost savings, particularly in hot markets, are driving more and more sellers to explore these options.
Consumers have more and more information at their disposal and are increasingly the drivers of the real estate transaction. Even as traditional brokers fight against these emerging models, consumers will continue to seek out service providers who better meet their individual needs.
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