All Forum Posts by: Jonathan Minerick

Yes, in my biased opinion, use a flat fee service to get you on the MLS. Your best bet is searching the web for "Flat Fee MLS + your city" and then checking the reviews on Yelp. So many of the reviews out there on other sites are borderline bogus or clearly written by the same person/company. It pays to be skeptical (IMO, Yelp is the most reliable).

The other important thing to note is that not all flat fee listings are the same. In general, here's the big things you want to look for in a flat fee 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. Make sure you are able to make changes to the listing after it has been posted for a nominal fee.

3. Photos on MLS.

Make sure you can upload at least a dozen photos. Some services offer a great price, but it's only for 1 photo - which is not useful for most properties.

4. Length of Listing.

Get at least a six 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.

Also, always remember you can get a flat fee attorney to help you with the paperwork as well, so you don't necessary need (or want) the firm that did the MLS listing to also do your paperwork.

We've found that a home selling boils down to getting just three things right 1) get pro photos, 2) like @mike flora said, offering a fair buyer agent commission on the MLS (typically 2.5%), and 3) price it right, which you'll know once you list (lots of offers = too low, no offers = too high. Either way you can adjust accordingly).

@Jody Schnurrenberger The 98% vs 91% list to close price ratio, like all statistics, can be misleading. For example, lets say you have a home you want to sell for $500,000.

If Agent A convinces you to list the home at a lower price of $480,000, using the logic that a lower price will create a bidding war. The home then gets 5 offers on day 1 and you accept an offer for $490,000. In this case, the list to close price ratio of Agent A is higher.

If Agent B lets you list at the higher price of $500,000. You accept an offer 14 days later at $495,000. In this case, the list to close price ratio of Agent B is lower…. but you ultimately made more money by using Agent B.

In short, the statistic doesn’t necessarily say anything (and could be construed as good or bad).

@Lynette Braun Thanks, have a great week!

A lot of agents assemble a database (over time) of investors that are always looking. Most actively searching buyers are going to using an agent already, so posting on the MLS is going to take care of that.

@Lynette Braun To clarify on the "MLS entry only" listing companies:

1. You can find plenty of companies that will enter a property into the local MLS for only an upfront fee and no commission at close.

2. In regards to "not the best way to get maximum exposure to the buyer", can you clarify what that means? Assuming a seller is offering a reasonable commission to buyer agents, "MLS entry only" does basically the same job as listing through a 6% broker. The vast majority of buyers find homes either through the internet or their agent. Listing agents rarely find the buyer. Offer a fair commission to buyer agents and let them do their job.

3. In regards to MLS entry-only companies "don't aggregate their data out to sites like Zillow and Trulia". This is not accurate at all. Most MLSs syndicate listings for their agents/brokers automatically. An "MLS entry only" listing is syndicated like any other listing on an MLS.

It sounds like you are already aware of the timing and price. In the vast majority of cases, the listing agent does not find the buyer. For my money, do the flat fee listing, get pro photos, flyers, etc. You can offer a bit more than typical commission to the buyer agents and let them do their job. 

The market is going to give you instant feedback on the price based on the number of showings/offers. Err on the side of caution on price - in the worst case you price too low and counter offer (vs. pricing too high and not getting any offers).

Your best bet is searching the web for "Flat Fee MLS + your city" and then checking the reviews on Yelp. So many of the reviews out there on other sites are borderline bogus or clearly written by the same person/company. It pays to be skeptical (IMO, Yelp is the most reliable).

The other important thing to note is that not all flat fee listings are the same. In general, here's the big things you want to look for in a flat fee 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. Make sure you are able to make changes to the listing after it has been posted for a nominal fee.

3. Photos on MLS.

Make sure you can upload at least a dozen photos. Some services offer a great price, but it's only for 1 photo - which is not useful for most properties.

4. Length of Listing.

Get at least a six 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.

Also, always remember you can get a flat fee attorney to help you with the paperwork as well, so you don't necessary need (or want) the firm that did the MLS listing to also do your paperwork.

We've found that a home selling boils down to getting just three things right 1) get pro photos, 2) offering a fair buyer agent commission on the MLS (typically 2.5%), and 3) price it right, which you'll know once you list (lots of offers = too low, no offers = too high. Either way you can adjust accordingly).

@William Allen Yes, you are correct in that buyer agents will typically only show a property with commissions at a certain level, which is understandable as they need to make a living. Most sellers that use a flat fee agent to list on the MLS still offer a market rate commission to buyer agents, which is why buyer agents still show their properties. There is typically no difference to the buyer agent in the amount they make when working flat fee sellers vs full-service brokers.

The other thing that I think is worth mentioning is that many listing agents, at least in California, have taken to the "pocket-listing" model where they try and keep their listings off the MLS so they can find a buyer themselves and double-end the deal. This is really bad for buyer agents as the inventory is not coming on market. Buyers are seeing homes they would have put an offer on being sold, and they are looking at their agents saying "Why didn't you tell me about this?", but the buyer agents never had a shot at it as it went under contract immediately because the listing agent found the buyer in advance.

What this all means for buyer agents is that the companies that are doing flat fee listings (such as mine) are their best friends. We bring inventory on market and don't try to keep it for ourselves. Meanwhile, their colleagues who are charging full-commissions are actually the ones hurting their business.

The truth is more complicated than meets the eye.

@John D. Yes, that's correct, the buyer would see the property come on market. The buyer agent isn’t obligated to show the property, but assuming the flat-fee seller is offering a market rate commission (as nearly all do), this is a no brainer for the buyer agent and another reason why the collusion argument is bogus.

The buyer agent could either:

A) Not show the property, to take a stand for the real estate industry to try and maintain 6% commissions for listing agents (who, btw, are doing "pocket listings" that are really hurting the buyer agents income - see my comment to William Allen above), hurt their relationship with their buyer in the process, and not make a buyer agent commission on the purchase, or

B) Show the property, which is the right thing for their buyer, and make a commission for themselves in the process. 

I've never come across a buyer agent who wouldn't show a flat fee listing that was offering a fair commission. As you can see from above, it'd be a bit mind boggling for a buyer agent to avoid a flat fee listing in the name of protecting their bottom line. Pure flat-fee agents are actually bringing inventory on market (versus full-service agents who are trying to keep "pocket-listings" for themselves).

Your best bet is searching the web for "Flat Fee MLS + your city". Always check the reviews on yelp, zillow, etc.

Note that not all flat fee listings are the same. In general, here's the big things you want to look for in a flat fee 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. Make sure you are able to make changes to the listing after it has been posted for a nominal fee.

3. Photos on MLS.

Make sure you can upload at least a dozen photos. Some services offer a great price, but it's only for 1 photo - which is not useful for most properties.

4. Length of Listing.

Get at least a six 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.

We've found that a home selling boils down to getting just three things right 1) get pro photos, 2) offering a fair buyer agent commission on the MLS (typically 2.5%), and 3) price it right, which you'll know once you list (lots of offers = too low, no offers = too high. Either way you can adjust accordingly).

@William Allen What led you to the conclusion that REALTORS® would not show the property because it wasn't listed with a local REALTOR®? That would be a pretty impressive level of collusion, certainly worthy of a government investigation. 

I am not a believer that this level of collusion is occurring for two reasons: 1) We've done hundreds of flat fee listings all over California and have not found that to ever be the case; buyer agents show properties that are offering a fair commission via the MLS (any legitimate property investor on here will tell you the same), and 2) how could you ever know this? Did the local REALTORS® get together and tell you this? Anyone that would admit to this would seriously jeopardize their career in real estate and possibly face civil litigation and perhaps even criminal penalties under antitrust laws.

Also, have you considered the implications if that level of collusion were true? Why would anyone ever want to do business with such a group of professionals? There are plenty of buyer agents out there that are working in their clients best interests (and not just their own). 

@Sam Reddy While I can't speak to that company in particular, we are believers in Flat Fee MLS listings as a way to make more on your sale, as is the U.S. Department of Justice. In the worst case, you can use a flat fee attorney to do your paperwork and you still will save thousands over traditional agent, without any drop off in legal coverage. In the best case you deal with a buyer direct and end up paying no commissions at all. Be sure to check your listing agreement carefully prior to signing up w/ a flat fee listing agent as many have hidden fees or requirements to use their closing services.

Note that flat fee MLS is different than FSBO. FSBO means you are not working with agents whatsoever, which is typically not the best idea as 88% of buyers have an agent, according to N.A.R. statistics. When you don't offer a commission via the MLS, you are losing those 88% of potential buyers as their agents are not going to show your home. This is typically true even if you say you will offer the agent a commission, as most agents don't want to deal with negotiating the commission in advance and signing a commission agreement without knowing if their buyer is even interested - that's the good thing about the flat fee MLS listing, as there is a binding commission offer stated in the MLS.

N.A.R. statistics will show that FSBO is at record lows and falling, but this is deceptive as it is generally accepted that most FSBOs are instead moving to flat fee MLS listings (which is technically considered For Sale by Agent). Most FSBOs are willing to work with buyer agents, but just don't want the overhead of paying a listing agent a commission to list it on the MLS - which is why flat fee MLS listings are a great solution.