Flat rate MLS for FSBO w/ buyers commission

[Jordan Hall]

I'm looking into listing a flip as FSBO with a flat rate MLS listing service in the Pittsburgh area. I will be offering a 2% buyers agent commission to be fair. Does anyone have any experience with this? Can you give me any recommendations or tips?

[Jonathan Minerick]

Here are the big things to look for in a flat fee MLS listing:

1. The listing MUST be on the local MLS.

There are hundreds of MLSs in the United States. Sellers want to be on the MLS that covers the area where their home is located, so they can offer a commission to LOCAL buyer agents.

2. Cost to List + Changes to Listing.

Can range from $100-$400 for the exact same listing on the MLS. Watch out for fine print that requires an additional fee at closing - this is a huge red flag. Make sure you are able to make changes to the listing after it has been posted for a nominal fee. For example, we provide 10 free changes with any listing (and $5 per change after that). Most sellers use ~5-6 changes. Note that a change can be anything such as pictures, description, price, open house, and status.

3. Photos on MLS.

Make sure you can upload at least 12 photos. Some services offer a great price, but it's only for 1 photo - which is not useful for most properties. Home buyers are very easily visually influenced. Pictures work wonders and numerous studies have shown that pro photography pays for itself many times over.

4. Length of Listing.

Get at least a 6 month listing and be sure that there is no charge for cancellation. 

5. Fine Print.

You should never be required to use any closing service (e.g. escrow) provided by the flat fee service agent. Read the listing agreement carefully - you will be required to sign it in every state.

6. Be Careful With Referral Services

Many of the flat fee MLS listing service providers you come across on the internet are actually just middlemen. These referral services find flat fee agents in each state and then advertise flat fee MLS listing service to sellers. These referral services have you add property info, photos, etc. but then send your info to the listing agent who does the work (and gets paid by the referral service).

Here's the catch: The actual listing agent is going to need to send you the real listing input form for your local MLS. The generic form that the referral service had you fill out is basically useless. Check out the listing input forms for a residential property for two different MLSs: Los Angeles and San Diego (in case you want to see how different the forms can be). Note that many fields are required on the forms and typically only the seller is going to know the right info.

You will also be required by state law to sign a listing agreement with the listing agent. It can be very dangerous paying for a listing without knowing what terms you are going to be required to agree to. 

Bonus Points + Additional Thoughts

You should also consider the ease of use of the flat fee MLS listing provider, for example, can you complete everything online? How quickly is the listing added to the MLS? How quickly can changes be made?

Finally, get a Transaction Coordinator "TC" (many agents use these). The TC will make sure the paperwork is in order and everything is moving along as it should once you are under contract. Well worth the fee (~$450 is typical).