Full service agent vs. flat fee listing....

By
Real Estate Sales Representative with Skyline Realty

To sellers considering a flat-fee listing;

As a broker, I understand that sometimes sellers need to save every penny they can to make the deal work for their buyers. Many sellers opt for what is called "Flat Fee MLS Listing," which means that the broker simply charges the seller a nominal fee let's say $300 and enters the listing in to MLS on behalf of the seller. The seller is then responsible to conduct all showings, negotiations, and open houses thereafter.

Not only do I think MLS should make this type of listing illegal, I also think that this type of listing is dangerous for the buyer, seller, and the broker alike. MLS was created for the purpose of enabling brokers to enter and manage listings in a unified system and work cooperatively to ensure a smooth transaction for the party they represent. Flat-fee listings create unfair competition and create a slew of problems from bad showings to bad representation. Every action that has been taken to diminish the role of the broker has historically proved unsuccessful.

It is documented that approximately 80% of those listings go unsold and are eventually handed over to a full time broker to handle. In addition, the sellers I have seen list this way lose thousands of dollars and time marketing the listing and dealing with buyers, lawyers, and taking time off from work.

One of my customers once told me, it is single.... If you need dental work, you see a dentist, is you need a haircut, you see a barber, etc.... Why is real estate any different. You don't go to your neighbor who is studying to be a barber and ask him to cut your hair and expect the best haircut? You don't go to an unprofessional dentist and ask him or her to remove your tooth....

There is nothing in my opinion as good as a full time dedicated broker who knows how to market and list your property. When choosing a broker, insure the following:

1. Ask your broker how many online avenues he or she uses to promote your listing.
2. Ask your broker what type of print advertising he or she does.
3. Ask your broker how many open houses will he or she conduct and where will those be advertised.
4. Ask to see a marketing plan like the one shown here.

In today's market an experienced broker is very valuable at the same time, don't be afraid to change brokers if the one you are working with is not delivering the goods.

Comments (4)

Judy Harrington
HER Real Living - Grove City, OH

I too, don't think these listings should be put on the multiple listing system. I don't agree with listing properties for lease or rent either. We are out there to sell properties.  That's just my two cents.

Oct 01, 2009 10:14 AM
Alex Haidar
Skyline Realty - Cambridge, MA
REALTORĀ®, CEO - Skyline Realty

Selling a home without an agent is not advisable. Sellers expose themselves to a great deal of liability when they do that. Also, why would a seller greet and allow strangers to walk into their home and kids' bedrooms without a professional agent screening that client first? This baffles me.

Oct 01, 2009 02:33 PM
Becky Johnston, GRI, CNE, ePro
Golden, CO

Nice article, thanks!  I know this is an area that will draw a lot of opinions, so here is mine. 

This is what makes the world go round.  Choices..

I think in today's market, or any market, a seller should have a choice.  Homes can sell in both cases.  I have proof.  Believe me when a seller signs a limited service listing with me they know what to expect.  They also know that at any moment in time during this listing, if they need to convert to full service - I will be there.   When FSBO's want to try on their own, I say great - I just want to be there when they need the realtor.    

The difference is that every seller is not the same.  Some sellers are quite savvy at doing this business on their own.   Same as Realtors.  I have a homeowner that does nothing but entry only, and she knows how to sell properties.  She knows how to stage her homes, she markets, she makes her own brochures, she invites brokers to open houses,  She qualifies every buyer before she takes them to show them the house, and does it all quite successfully all the way to closing.  The only difference is she is not licensed - She knows when to call on the professional to help her complete the square.  Then, there are some sellers that need the whole package deal.  My business plan is to be there for both. 

 

Oct 02, 2009 02:10 AM
Lane Midgett
1776 Real Estate Group Richmond, VA Local Expert - Richmond, VA

You should allow re-blogging on this one. I wrote something similar awhile ago.

May 30, 2010 12:12 AM