I was writing a blog earlier about meeting with a prospective seller that believed his chances were better of saving money with a Flat Fee, MLS only agent vs. going with a full service agent.
This got me thinking of the true stats that these companies actually delivered and I wanted to share them here.
This is a study of the top 3 Flat Fee providers in Milwaukee WI
Milwaukee Area Flat Fee service Stats
I will not include any names here.
This is based on the #1 flat fee in our area.
380 homes listed
59 Sold
only 15.5% actually sold
Of those that were lucky enough to get an offer the average sold price was 8% lower than the asking price.
This is from the #2 Flat Fee only company
100 homes listed
16 sold
Only 16% actually sold
Of those that were lucky enough to get an offer the average sold price was 5.4% lower than the asking price. the average in our MLS sold for 95.2%.
This last companies very well known and offer an Ala carte service where you can add more services later if you wish. You may have seen their magazines.
138 homes Listed
41 Sold
29% Actually Sold
Of those that were lucky enough to get an offer the average sold price was 4.5% lower than the asking price.
I attribute this to the customers that actually stayed with this company and eventually opted for more services(which usually costs more in the end than listing with a full service agent from the get go) vs, the majority who felt like the were handed the old bait an switch and went off to list with a real full service agent.
The important thing to note is all of these companies charge an up-front fee of at least $400. For some companies this can be quite lucrative, because all they provide is MLS access. In honesty they could really care if the home sells or not, since there is no incentive for them. In fact if your home does not sell and you re-list with them would be even better since you will be paying them again, and they can keep their sign in your yard and they can continue to receive buyer calls where they can show and sell buyers other homes than yours, where they can actually make an average commission. (Not all Flat Fee Companies advertise their numbers or operate this way but many do)
If you are just testing the waters, and are not committed to selling and live with a 16% of selling your home while you have to do more leg work this might be the best route to go. But be advised the buyers and agents viewing your home know you are not paying the other half of commission and thus is usually deducted from the offer to purchase. All this extra work you are doing and money you are trying to save is going right to the buyer.
If you are serious about selling, contact a full service agent like myself that can show you how full representation can work to your advantage. Because 90% of our listings sell and we average 98.7% of list to sales price.
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