Flat fee MLS service:
A hybrid plan for exposure to the entire home buyer spectrum.
The blending of for sale by owner and realtor marketing may represent the best possible combination of marketing exposure along with the opportunity for the lowest cost of sale.
Flat Fee MLS services come in various forms and there are many things a homeowner needs to be aware of when signing up with a flat fee mls company.
There is no nationwide MLS. Each “Multiple Listing Service” in the U.S. represents one or more local or regional Realtor Associations. (see MLS 101)
When a listing broker enters a listing into MLS they also include a “co-broke” commission amount, -this is the commission that would be paid to any MLS broker who procures a buyer for the property. The offer of a commission is required and cannot be zero. Although commissions are generally offered as a percentage of the selling price, they may also be expressed in terms of a fixed dollar amount.
In the Chicago area, the most common co-broke commission offered by the listing broker to other MLS brokers is 2.5%. If you authorize your listing broker to offer 2.5% in MLS then you will be competing well with other listed properties on a commission basis. Make sure the listing agreement expressly states that the percentage commission amount will be offered to other brokers in MLS.
Most, but not all, flat fee mls service providers also allow the owner to sell the home on their own without paying any commission.
It is important to make sure this is clearly noted in the listing agreement. Also make sure that there are no other add on services or fees unless you expressly authorize them. You are not required to use your flat fee broker to help with the negotiation and/or closing process.
A property listed in MLS is generally distributed throughout the MLS network. The actual MLS listing which includes all of the available listing data, including the commission amount being offered, is only available to agents within the private MLS network. The full listing is available to consumers only if it has been sent to them by a realtor. Each MLS also has a network of public facing websites where the listing will appear although in an abbreviated format. The public network will include a wide variety of local broker websites as well as larger feeder websites like Realtor.com.
Not all flat fee services are the same
Flat Fee MLS services come in various forms. Some may simply offer exposure on Realtor.com, with or without exposure on the local MLS. These types of services typically do not offer a competitive co-broke commission in MLS but may simply offer a nominal amount such as $1 as the commission. For some sellers who do not want to pay a commission under any circumstances, this may be a good way to get a lot of extra exposure through Realtor.com.
The critical issue to keep in mind is that a significant number of buyers who use Realtor.com are already working with an agent to help them with the process. The typical buyer today is doing their own house hunting online and then emailing their agent the properties they are interested in seeing. If your listing is on realtor.com but not in the local MLS with a competitive co-broke commission being offered, it is likely that the agent is not going to show it to the buyers.
Although For Sale By Owner marketing has grown dramatically in recent years, the fact remains that most serious and qualified buyers use a realtor to help them with the process. To get in front of these buyers use a flat fee mls service that will list in your local mls and offer a co-broke commission of your choosing.
The best combination
In my opinion, the absolute best combination service is the ForSaleByOwner.com gold plan which includes a listing in your local mls as well as the exposure from ForSaleByOwner.com. With this service you are getting exposure on two of the largest real estate websites in the country in ForSaleByOwner.com and Realtor.com plus all the advantages of being listed in the local MLS. You are essentially marketing to everyone. Buyers who want to buy from a by owner because they perceive a better value, as well as to buyers working with a realtor who they perceive will provide a beneficial service to them. If the property is sold by a local realtor you would only pay the co-broke that you were offering in MLS (commonly 2.5% in the Chicago area) If you sell as a for sale owner then you would pay no commission. To account for the potential different outcomes I advise that you plan in advance what your price cut-off points will be when considering an offer from a realtor involved sale and one where you are working directly with the buyer and paying no commission.
The ForSaleByOwner.com with MLS plan I think offers the greatest marketing exposure across the homebuyer spectrum and gives you the greatest opportunity to sell at the highest price with the lowest cost of sale.
You can also search for local or national for sale by owner, flat fee mls brokers, or discount brokers, by simply using the approiate search terms in Google.
