This blog is a brief history of what to look for when listing in MLS "flat fee" in Florida -and tips to succeed.
I am Keith Gordon broker and advocate of flat fee sellers in Miami, Orlando, Tampa and all cities in the great State of Florida.
My credentials are notable as I have been a Florida real estate broker for 24 years, wrote the flat fee MLS Sellers Bill of Rights, just received the 2008 Realtor.com marketing award of excellence and my discount MLS brokerage firm ADDvantage is the largest flat fee MLS listing service in Florida.
The first thing to question about listing flat fee MLS is who are you actually listing with? Are you listing with the company that takes your money or with the company that inputs your listing into the MLS?
There are many different flat fee MLS services in Florida which I refer to as "local." And, there are many out of state, non-local and NOT Florida licensed brokers that I call "national websites."
This blog is about the differences between these two business models and how they can affect your flat fee MLS listings success.
"National websites" typically refer a listing to a broker in that state. Once you have paid your flat fee to the national company, they promptly refer you to a local Florida broker. There are a few issues here because you have no idea who this referred broker is going to be. It may be us as we do take referrals from national websites. Then, that referred broker inputs the listing into the local MLS, has the seller sign their listing agreement (which you haven't seen yet) and then maintains the listing.
The "local" flat fee MLS broker is definitely licensed in the appropriate state, does all the duties mentioned above and collects the money from the seller.
ADDvantage® does accept referrals from national websites and we do enjoy the extra business and relationships which we establish with these referred sellers. This national business model provides an introduction to customers that we would not get UNLESS we didn't have to complete with these national flat fee "websites."
And no, I don't equate taking their referral business as aiding the enemy because these national website referrer companies are run by hard working owners and I do respect what they are doing just as long as:
1) They should not say, "We are Licensed Brokers," as this is misleading.
2) They, along with many local flat fee MLS brokers, should display their listing agreement or display the (referral) broker's listing agreement.
3) The National website should display who the referral broker is.
4) They should clearly say and most do, that they are a "national referring flat fee MLS service." Note: The general public actually thinks this verbiage is powerful: "We are the largest national referral network." I equate this with covering poop in dark chocolate and saying "um um good."
The truth: If the general public actually read or cared to read "what they were getting into (listing agreement) before they just "hey, I'll list my property in the MLS," they would never sign up with a national website.
1) The word "list" should ring a bell that there is something legal going on here.
2) These unsuspecting sellers should apply some common sense; "caveat emptor."
Where do the smart people go? We are transparent on our flat fee MLS website getmoreoffers.com, as we publish our listing agreements, warn about flat fee scams such as the "bait and trap" offers, the dangers of listings with a national flat fee "website," etc.; Because of this, we actually end up with the savvy seller who has researched how flat fee listing really works and what the differences are between listing companies.
The extreme example of a careful and smart flat fee seller: Last week, we got a call from a prospect. She called twice and asked so many questions that my partner was convinced she was a competitor fishing for clues on how to become a Florida flat fee MLS broker. Then she called on a Saturday while we were in Miami for Passover and she actually asked me "when I want to cancel my listing, what form will I need to sign?" She actually requested a copy of that form and had previously asked us for our listing agreement to be sent by email, which of course, we obliged.
As it turned out she was real and signed up a few days later and listed a $5 million estate. This prospect was EXTREMELY smart, articulate and well educated on flat fee-more so than any prospect I have ever run across.
What's the point? Let the public take care of themselves. Dummies will be dummies regardless of what protection or disclosure you provide.
The history of FSBO websites and flat fee MLS services taking advantage of an uneducated seller:
1) Buy Owner: it costs roughly $5,000 to get on their FSBO website. Do a search of "lawsuits" and "buy owner" or similar phrases and you'll notice a plethora of complaints posted on various blogs across the internet from disgruntled sellers. Buy Owner uses high pressure sales tactics and charge thousands but people sign up with Buy Owner nonetheless.
2) Some local and national flat fee companies call themselves flat fee but take their client buyer leads. Some even say in their listing agreement that they do so and the general public STILL SIGNS UP! Are they crazy? I think they simply don't read the listing agreement.
3) Local (not national) flat fee companies that charge a $500 cancellation fee. This, in my opinion, is NOT a flat fee MLS Listing.
4) Flat fee companies that require a 25% referral commission kick-back in order to cancel--once again, NOT a true flat fee MLS listing.
5) Buy Owner/MLS Realty flat fee MLS listing agreement allows for MLS Realty (sister company to Buy Owner) to lien the property (before the sale or even if it doesn't sell) to protect a 2.5% commission if the seller wants to cancel the agreement prematurely.
Summary of how to get listed flat fee in the MLS and stay clear of trouble: Funny business exists in Florida flat fee business models, national flat fee "websites" and even in good old Corporate America. How about phone companies that charge for local calls that are 10 miles away and you don't know it unless you read your bill "line for line"; credit card companies that smack you for making one payment one day late and they jack your rate to 18% (even if you're their customer for 5 years); Banks that charge overdraft fees of $35...that's why they promote checking accounts.
So where do national flat fee MLS "websites" fit into this? There are varying degrees of disclosure and transparency with all business models. As with everything in our world it is ultimately up to the consumers to protect themselves. Sellers should be more diligent about who they choose to do a flat fee listing. Just because it is offered on the web and someone says they are the "biggest" or the "best," doesn't mean it's true. Real estate is a complex business and a lot of money is at stake. It's not like a cable subscription that you can cancel if you change your mind. We are talking about an agreement attached to possibly the largest asset a person ever owns. Verify the terms in writing.
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