flat fee m.l.s. in Iowa and in the United States for only $499

Firstly, I want to point out that the Active Rain blogs are not a place for you to directly advertise your business like this; but that is between you and the Active Rain moderators.

Now, I am getting tired of the bait and switch and false advertising that is going on in our industry.  I would like to preface by saying that I am not one of those full service agents who is complaining simply because I'm afraid of price competition as you will probably try to make me out to be.  I have no problem with price competition and welcome it as it is the basis of our free market economy.  I do however feel strongly that when companies advertise discount services like yours, their needs to be some regulation to force you to fully disclose some of the important details that you conveniently leave out in order to make your service sound more favorable:

Here are the things that consumers NEED to know:

1.  Less than 10% of all real estate transactions involve a 7% fee.  Most agents in my area (GA) charge an average of 6%.

2.  By using your service vs a 6% full service agent, the "savings" is only 3% since the seller will still have to pay 3% to the buyer's agent.

3.  You have a laundry list of nickel and dime fees for things that most full service agents do not charge for including:

     (a) $120 to upload photos to the listing.

     (b) $100 to do a comparative market analysis on their home to help them price it right.

     (c) $150 For a lockbox

     (d) $100 for a virtual tour

     (e) $200 for help with paperwork and negotiations.

     (f) $50 / hour for answering questions or emails from your clients!!!!!

     (g) $100 to add a showcase listing feature on Realtor.com

...and the list goes on.

This is very misleading as ALL of this and MORE is absolutely FREE to one of my clients.  And, my clients do not have to pay me a dime until the house is SOLD; so I am absorbing some of the inherent risk of upfront costs.  Your fee structure is like a car dealer offering a FREE car and then charging for wheels, brakes, a hood, a radio, an engine, etc.  In the end, you get what you pay for.

4.  Being in the MLS is only PART of the marketing.  Some would argue that it's the most important part - others would argue that the personal networking with other LOCAL agents who know and respect the listing agent is most important to getting a home sold.  I think it truly depends on the property and whether or not it's a property that can sell itself with photos or if it's a must see inside that needs an agent to network and get their colleagues to preview it in order to know how good it really is.

5.  Finally, in MOST cases what ends up happening (and I know because I take this into consideration when I work with buyers) is that the buyers know that the seller is "saving" on the commission and every seller has some apprehension as to whether the flat fee thing will work for them.  Most set a deadline at which they will finally throw in the towel and get the job done right.  Therefore, buyers are much more likely to automatically deduct at least 3% from their offer if you are listed with one of these services.  Now, you don't have to accept the offer; but in reality, you are likely to take out a calculator and compare your net to what you would get with even a full price offer if you end up having to list it with a full service broker.  What mostly ends up happening is that you compromise (that's what negotiation is all about).  You sell the house for 1.5% less, the buyer gets it for 1.5% less, etc.  Now your 7% savings is down to a 1.5% savings MINUS the $1,000 or so in extra hidden fees.  On lower priced homes in particular, the "true savings" is often under $100.  You tell me if that's worth it to do all the work yourself, miss out on a portion of the market that will find your home through other means than the Internet (public mls), And know that if it doesn't work out, you have wasted ALOT of money and valuable time and now your listing has become the "stale" listing that has been on the market for so long.

That said, I am not denying that there are SOME cases in which this a-la-carte fee structure may be the best option for some.  However, it is not always and I like to make sure that consumers have all of the facts first before they are duped into signing on with a discounter who only tells them part of the story.  I am on a mission to lay out the true facts and let consumers start making educated decisions about this on their own.  If that happens, I think these type of companies will be out of business rapidly.