All Forum Posts by: Jonathan Minerick

@Simon Bloch A good way to find providers is just googling "Flat Fee MLS + your city" and then checking their reviews (yelp, zillow, etc). Not 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).

@Mikki McConville In California, the state supreme court ruled that requiring an agent to join the Association of Realtors as pre-requisite to MLS access was a violation of antitrust law. So, in California, you do not need to join NAR to get on the MLS.

As a side note, here is a BP post I did about how expensive MLS access is in California and how time consuming a license is: https://www.biggerpockets.com/blogs/9561/55035-what-are-the-costs-and-steps-to-a-california-real-estate-license. 

In most cases, you are better off not getting a license and just using flat fee real estate services and working directly with listing agents. You are more likely to get the deal when there is not an agent on your end (and you won't be claiming the commission as an agent), as the listing agent will make more money by pushing your offer.

@Rob Adams Sure thing. Like Mike stated, just getting pro photos and doing a flat fee MLS listing (~$100) does all the marketing you need.

I honestly don't believe the average seller has any idea they can list on the MLS for a flat fee (something even the US Department of Justice thinks sellers should do). 

There are certainly pros/cons to every approach, but with a flat-fee listing / flat-fee attorney, you can end up making a lot more money with very little added effort (and better legal coverage). Best of luck on the sale!

@Rob Adams Also, depending on the listing agreement you have with the agent that posts your listing on the MLS, if the buyer comes along without an agent then you will have no commission due to the buyer agent. Note this is ONLY IF you have the correct listing agreement type.

In the traditional listing, a seller signs a listing agreement that states there is a 6% commission paid to the listing agent. That listing agent then offers half of that commission (3%) to buyer agents via the MLS. If the buyer comes along without an agent, the entire 6% is still due to the listing agent. * (SEE SIDE NOTE BELOW)

You can find listing agreements (more commonly when using a flat-fee broker) where the agreement states the commission in not paid to the listing agent when the buyer comes without an agent. In more competitive housing markets, buyers are recognizing the value they have by being unrepresented, and are going directly to the seller/listing agent.

* SIDE NOTE: The above situation is why many listing agents will try to find a buyer before placing the listing on the MLS (so they don't have to split the 6% with buyer agents), known as a "pocket-listing". These "pocket-listings" end up getting the seller much less money as there is not any competition amongst buyers for the sale. This all greatly annoys the buyer agents who are unable to get a home for their buyers, as the homes is not advertised on the MLS. This is currently a hot button issue in real estate, with the association of realtors warning of the danger of these "pocket listings".

@Rob Adams In response to the arguments you've heard:

1. Offer a fair commission and buyer agents will show the property. We've done hundreds of these listings, the only time the buyer agents avoid the listing is when the seller tries to go too low on the commission offered. I think that is understandable from the buyer agents perspective.

2. Most agents use the standardized forms offered by the state association of realtors (which make it pretty obvious when some non-standard language is put into the contract). In the worst case, you can hire a flat-fee attorney to review the contract. We have an attorney (who is also a broker) that we use in Southern California that does this for our sellers for $500 flat - still a huge savings versus using a commission-based listing agent.

The National Association of Realtors does a yearly study on how buyers found the home they purchased. The revealing part about this study is that is shows listing a home on the MLS (and offering a fair commission to buyer agents) really does all the marketing work you need.

When listing agents talk about special programs to sell your home, they are mainly gimmicks. A few well known examples:

1. Pre-marketing to their database of buyers. This is done so the listing agent can capture the entire commission for themselves. The seller is told they can avoid heavy foot traffic in the house and sell quickly. Known as a "pocket listing", it can cause sellers to make much less money. Even the Realtors association has warned agents on this.

2. Guaranteeing to sell your home, or they'll buy it. The agent gets you to list at a price well below market value. No agent would buy a home for what it is worth, as they would lose money having to hold and resell. A home listed below market value sells quickly. If it doesn't, the agent buys it at the below market price. They win, you lose.

3. Print marketing. Accounts for 1% of buyers. Just not a good use of money for what you get.

4. Open houses. This is a well-kept secret in real estate. Listing agents host open houses to recruit new clients (it's not about selling your home). It's basically free marketing for the listing agent. Yes, they'd be ok with selling your home, but it's much more about finding new buyers to work with. The serious buyers (or their agent) will reach out regardless of whether you have an open house or not.

Agree w/ @Jorge Zea 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).

@Tony Choe Here's a BP blogpost I did on the exact costs and timeframes for the California real estate license: https://www.biggerpockets.com/blogs/9561/55035-what-are-the-costs-and-steps-to-a-california-real-estate-license

@Jose Tamayo Jr

FSBO can be tough, as most (88%) buyers have an agent and that agent is typically not going to show your home unless you are offering a commission on the MLS.

We are fans of listing on the MLS for a flat fee (e.g. $100) and then using a flat fee attorney for any paperwork. IMO that is going to be your best result with the lowest costs.

In general, the big things you want to look for in a flat fee listing are:

1. The listing MUST be on the local MLS.

There are dozens of MLSs in California. 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. This is a violation of federal law.

Ultimately, we've found that the three most important things when listing a home are 1) price, 2) pro photos, and 3) offering a fair buyer agent commission on the MLS (typically 2.5%).

Lindsay has good points, I would add the following:

1. Price - can range between $100-$400 to list on the exact same MLS, so be sure to shop around.

To clarify a couple points as they relate to California:

1. Commission: MLSs out here have a minimum buyer commission of $1. That being said, buyer agents will typically not show properties offering less than 1% commission (depending on home value).

2. Disclosures/documentation: The California Association of Realtors ("CAR") prohibits flat fee agents from providing CAR forms to you unless that agent is providing full representation to one party in the transaction (which also means they must provide a visual inspection of the property). The terms of use of CARs software provider also prohibit providing blank or partially blank forms. I'd recommend speaking with escrow or the buyers agent to get the forms you need for free, otherwise a flat fee attorney can assist for a reasonable cost.

3. Transaction management: You can typically get this for ~$300 in California.