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 you’ve made a commitment to selling your home, it’s important to look at all of your options (selling with a real estate agent, going it alone, or selling with flat fee mls). In each case, you’ll find that there’s a certain amount of information that’s available to you.
The problem is FSBO sellers need to find all of their information on their own – just as they sell their homes on their own. Selling with a real estate puts you on a “need to know basis” – your agent will tell you what you need to know, nothing more and sometimes less. When you’re working with a flat fee broker it’s far easier to find the information you need.
What information can flat fee brokers give you? Here’s a sampling:
- Marketing info – your broker can help you find the best ways of marketing your property
- Showing info – your home will sell faster if you show it right
- Details about what repairs you should make and which upgrades you might want to overlook
- Access to home inspectors
- Tips about home warranties
- Specifics that can help you with the closing process
If your flat fee broker can’t give you the info you need, it just might be time to find a better broker.
Conflict of interest for state regulatory commissions
The Consumer Federation of America is on the offensive again, attacking state real estate regulatory commissions for their "blatant conflict of interest." How has this been swept under the rug during the ongoing disputes involving the FTC and DOJ? This seems to be one of those "no-brainer" topics needing to be addressed in order to facilitate fair, unbiased industry regulation. Currently, traditional full-service agents are serving as the lawmakers for almost 70 percent of states across the nation. It’s no wonder why minimum service laws are being created! Commissioners are doing whatever they can to eliminate competition in the form of alternative models like flat fee brokers, arguing the industry is already more competitive than any other. The competition is there in numbers but not in choice. The industry is not "competitive" unless consumers have an opportunity to choose from a bevy of different levels of service. Some consumers may need "full representation" and contract negotiation assistance while others have enough experience to handle all aspects of the transaction short of marketing exposure provided by the MLS. If the rules are created for the benefit of the consumer, give them the gift of choice and let them decide.
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Author Danielle Babb has announced she will be releasing her book, "Commissions at Risk: A Real Estate Professionals Guide to Beating Online Competition," in October 2006. This book will help position agents on how to re-invent thier business based on the use of technology. The book comes as a response to the growing popularity of "low cost and flat fee brokers, as well as automated systems that cause distress for real estate agents." Flat fee MLS and discount brokers serve as a valuable tool in marketing a home for sale as it maximizes a homeowners potential exposure and allows sellers to retain all the rights of a for sale by owner.
Limited service brokerages under fire again
Another state real estate commission has succumbed, at least temporarily, to pressure from the Department of Justice and Federal Trade Commission’s warnings against the imposition of minimum service regulations for real estate brokers. The effect of such regulations is to limit consumer choice regarding real estate services.
State officials have scheduled a meeting in Las Cruces, N.M. at the real estate brokerage office of David Steinborn, who also just happens to be the president of the New Mexico Real Estate Commission. Local flat fee brokers claim that the meeting is being held some 230 miles away from the real estate commissions office in order to make it difficult for opponents of the measures to attend the meeting.
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National MLS Coverage Expanded
Flat fee mls services are now available in additional states through nationwide discount brokerage services website www.MLSLion.com. After a recent article in Inman News, more flat fee brokers around the country registered for membership with this fast growing portal for home sellers seeking to obtain the exposure of the Realtor MLS for their home sales without giving up thousands of dollars in real estate commissions. MLSLion now offers flat fee listing to consumers in approximately 40 states including Alabama, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Washington, D.C., Florida, Georgia, Illinois, Kansas, Kentucky, Louisianna, Massachusetts, Maryland, Michigan, Maryland, Minnesota, Mississippi, Missouri, North Carolina, New Jersey, Nevada, New York, Oklahoma, Oregon, Pennsylvania, South Carolina, Tennessee, Texas, Utah, Virginia Washington, Wisconsin.
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Minimum service legislation shot down
Hooray for Kentucky! Consumers just narrowly missed being subjected to a new law that would have all but eliminated "a la carte" real estate brokerage services in the state when Senate Bill 43 was amended at the last minute.
As has happened in several states around the country, old guard real estate forces in KY have, through their virtual stranglehold on the real estate regulatory body in that state, pushed for legislation aimed at protecting the traditional real estate commission structure. Luckily for home sellers in Kentucky, the U.S. Department of Justice and Federal Trade Commission have been vigilant in their opposition to proposed laws that would mandate that consumers purchase a bundle of real estate services.
Of course, this battle isn’t over and is being replayed in state after state as real estate commissions face downward pressure from new, low-cost alternative business models.
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Steps You Can Take When the Market Softens
While economists debate whether the housing industry bubble will burst, there is no doubt that home prices have stopped their rapid ascent. The number of home sales has also dropped with the National Association of Realtors predicting a 4% decrease for next year. With increased inventory, sellers face longer marketing times and increased pressure on price.
There are, however, steps sellers can take to better position themselves when the markets cools. The most obvious factor is price. Sellers should explore all options that provide flexibility when pricing their home. There are several brokerage firms now offering homesellers marketing services at a significantly reduced cost. These savings can be utilized to better price your home against the competition.
Many of these flat fee brokers also allow the sellers to set the amount of commission to be paid the agent that brings a buyer. By adjusting your price and commission, you not only compete on price but also work to better promote your property to the local real estate agents.
“Consumer Protection” or “Industry Protectionism”
Brokers in Texas are facing new restrictions on the way they provide real estate services. No longer are limited service and MLS entry-only brokers able to offer an a la carte menu of services to consumers without restriction.
Because of the efforts of traditional Realtors who control the Texas Real Estate Commission and Texas Association of Realtors, legislators were convinced that the public needed "protection" in the form of stricter real estate requirements for real estate brokers.
Senate Bill 810 went into effect September 1, 2005 requiring real estate brokers to, among other things, present real estate offers directly to their customers. No longer do consumers have the choice of paying a real estate broker less for fewer services. Whether or not Texan home sellers want a broker to handle their real estate offer for them or not, they must now agree to allow the broker to present the offer (and, of course, pay for that extra service accordingly).
While the introduction of the new law was couched with the term "consumer protection" by it’s proponents, the obvious intent of these types of measures is protection of the interests of big brokers and their right to a traditional real estate commission of 5-7%. Limited service companies have made terrifc gains in the market over the past several years at the expense of traditional brokers.
So much so, in fact, that Realtor Associations in several states have called for and pushed through legislation on the unwitting public that requires them to pay for additional services they may not want or need. Aaron Farmer of Texas Discount Realty and Jack McLemore of BrokerDirectMLSTexas have both already raised their fees in response to the requirements of the new law.
It doesn’t seem like the consumer wins (or gets protected) when rates for real estate services go up in response to a new law and no benefit is derived.
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