6 Reasons to Avoid Flat Fee MLS Service
If you are thinking of listing your home for sale by owner and are wanting to use a flat fee MLS service, you may want to reconsider. Many people believe that the key to selling a home is just getting it onto the MLS. Although the MLS is important, it is far from being the silver bullet for home selling. Don’t get us wrong however. The MLS is very important tool and is the number one way to gain exposure.
The true power of the MLS is its syndication ability. Almost every MLS pushes data to major consumer facing sites like Realtor, Zillow, Homes, and many others through its API. Seeing that almost everyone starts their home search using one of these sites, the MLS is a very strong tool in the home selling process.
Flat Fee MLS services are not created equal. Most of them just throw you onto an MLS and you are left to fend for yourself. You are also left to exposed to liability and lawsuits if things go south in your deal. Before selecting a flat fee MLS service, you should really try and understand what exactly it is you are getting.
Listing on a Flat Fee MLS can Cost You More, Even Without an Agent
At BlueMatch, the top reason people want to list FSBO is cost. If you are thinking of selling FSBO, you probably believe that eliminating an agent is the most cost effective way to sell. This is partly true in that it is cheaper to sell your home FSBO vs an agent. But is it the most cost effective? Conducting a real estate transaction in most states requires the use of a licensed agent or attorney. This means if you sell FSBO using a flat fee MLS service, you are still going to have to pay someone to facilitate the transaction. This is in addition to paying Flat fee MLS fees.
Most people will hire an attorney or unknowingly pay additional fees to their title company at closing. That’s right, additional fees. Title companies and attorneys can charge hundreds and in some cases thousands of dollars for their services. When you factor this additional cost for just closing, BlueMatch is a bargain.
Lawsuits are Very Common in Real Estate.
If you think you won’t get sued, think again. Listing a home through a flat fee MLS service means you are ultimately liable for the outcome. Lawsuits are very common in real estate. Agents are required to carry errors and omissions insurance for this exact reason. When listing with a service like BlueMatch, you are covered by our error and omission insurance which helps decrease your liability.
About a year ago, one of our sellers was sued by a buyer for $30,000. If you do as many transactions as BlueMatch, it is bound to happen at some point. Because the transaction was performed by a BlueMatch licensed agent and everything was done in a compliant manner, our legal team was covered by our E&O insurance. This saved our seller and BlueMatch thousands in legal fees. As it turns out, the case was frivolous and thrown out.
If this seller decided to go the FSBO route, the outcome would have been very different. They would have spent a fortune in legal fees and the outcome may not have been in their favor. The legal exposure you have selling FSBO is just not worth the risk. If you are determined to go this route, we highly recommend seeking legal advice and guidance.
Flat Fee MLS Service do not Solve Real Problems
The top two reasons people fail to sell their homes with BlueMatch is price and commission. It is as simple as that. Those that fail to sell their home successfully are overpriced or they are not incentivizing buyer agents properly. Both have easy solutions but are hard for consumers to grasp. People have an emotional attachment to their home which skews their perception of what the home is actually worth. Poor pricing methods or offering well below market rate for a buyer co-op can be detrimental in getting your home sold.
We recently published a post titled The Number One Reason Why Your Home Isn’t Selling discussing this topic. We highly recommend giving it a read. Even agents make pricing mistake. It is common in real estate. Making a pricing mistake isn’t the end of the world. A good agent will have a plan on what to do if they happen to overprice your home. If you think you may be overpricing your home, develop a plan beforehand.
Flat Fee MLS Service May Not Put You in the Right MLS
There are literally hundreds of MLS’s across the country. Some states have as many as 40 or more active MLS’s. Just because you paid to be in an MLS does not mean you will be put into the MLS of your choice. In Colorado for example, if you were listing in Denver, you would want to be in REColorado. If the agent or flat fee MLS service is a member of Pikes Peak, local agents in Denver will not be able to access your listing. This can be very frustrating for agents.
Before paying for a flat fee MLS service, make sure the MLS they are putting you in is your local MLS. If it is not, find out if they can put you into your local MLS. Most of these services contract a local agent or two in each state. Whichever MLS that agent is a member of is usually the MLS you end up in.
Flat Fee MLS Service are Usually Full of Hidden Fees
The average person on BlueMatch makes multiple changes to their listing almost weekly. With BlueMatch, listing changes are free and easy to make. That isn’t the case however with most flat fee MLS services. These services will charge you every time you want to make a change or edit your listing. From loading new photos to correcting a spelling error, you can expect to be charged. These fees can add up very fast turning your $99 listing into a $200-$300 listing.
Fees to cancel your listing are also not uncommon to see with flat fee MLS services. For example, if your home goes under contract in 10 days but you are signed up for 90, you may have to pay a fee to cancel or endure 80 more days of phone calls. Both of these options are terrible. Always read the fine print before signing up. If something seems to good to be true, make sure it isn’t.
Time vs Savings
Selling FSBO using a flat fee MLS service is still selling FSBO. This means you will be investing your time and money into the process. When you take into consideration the cost involved with closing as a FSBO plus all of the time that it consumes, is it really the best way to sell your home? With BlueMatch, the cost is often the same and in some cases less than what attorneys and title companies charge. We do everything from start to finish and a local MLS listing is included. When considering alternative options in selling your home, picking BlueMatch should be a no-brainer.