With the Real Estate world-changing by the minute, home sellers are faced with more and more options to list and sell their homes. If you are looking to save money on commission, there are a few things you should know before choosing a company to represent you. Thinking about using a flat fee realtor or flat fee MLS? Price is not always the number one thing you should take into consideration when listing your home. Some people start their search for an agent by asking friends and family. Others understand the high cost associated with traditional agents and look for alternative options. In those cases, your search can lead you down many rabbit holes.
Everything from flat fee MLS to fixed fee Realtors can leave you with more questions than answers. In real estate, there are a hundred ways to skin a cat. Deciding between cost, outcome, liability, and other factors can be daunting. In this particular post, we will discuss the differences between two of the most popular alternatives to traditional real estate agents. Flat fee MLS’s and flat fee Realtors.
Most people assume that services or companies like BlueMatch are simply flat fees MLS services. Others think that companies like ours just list you on the MLS and don’t provide further services. Both of these are incorrect. There are very distinct differences between a flat fee MLS service and a fixed fee brokerage service. Before using either of these options, make sure you understand exactly what it is you are signing up for. Find out how much liability you are taking on. Is the company insured? If something happens, who is responsible?
Uncovering these things up front can save you time and headache in the future. It usually only involves a few hours of research and the savings can add up significantly.
Understanding Flat Fee MLS Listings
These listings can be a great alternative to listing with an agent. Usually, you will pay an upfront flat fee and a company will list you on the local MLS. Some of these Flat Fee Listing companies will even provide documents and contracts for you. From the home seller’s perspective, this sounds like a great deal. But the truth is, you are assuming all of the liability and if something goes wrong, you could find yourself on the wrong end of a lawsuit.
Any real estate agency that does a high volume of transactions will more than likely at some point be faced with a lawsuit. It just comes with the territory. Real estate is emotional and there is a lot of money at stake. By nature, the industry is more susceptible to lawsuits. Most of these lawsuits are frivolous and are settled out of court. Even so, they are costly and can be scary if you find yourself entangled in one.
Always read the small print when listing on a flat fee MLS site. Most of the time there is no agent, attorney, or transaction broker representing you. There is no E&O insurance in place. And you, the consumer, are responsible for ensuring everything is compliant and legal. This means if someone decides to sue you over your transaction, you will have to shell out court costs. If you lose in court, it cost you even more.
When you work with a licensed agent, the agent has a fiduciary to you and there is a shift in liability. Saving a little money now could cost you serious dough in the long run. Always evaluate the amount of risk you are taking on. Before companies like BlueMatch entered the market, it made sense to take on some liability to save $15,000 or more. In today’s market, however, the risk-reward just isn’t there anymore. You can find services like BlueMatch for under $1,000. The piece of mind alone is worth it to most people.
Who is Flat Fee MLS Services Good for?
This service is generally reserved for people with a great amount of experience buying and selling real estate. Professional home flippers, attorneys, and ex-real estate agents tend to do well and understand the risk involved in listing on these sites. Flat Fee MLS services are not recommended for anyone outside of these categories because of the high-risk factors involved.
At BlueMatch, we have a service where we only provide you with a transaction coordinator. This service is great for seasoned pros. As a matter of fact, many agents list their personal homes on BlueMatch. Even agents that are licensed have a high risk of failure on our platform if they don’t have the experience. Understanding the mechanics of real estate is only a small part of getting the home sold. Knowing how to move homes through experience is a different ballgame.
When you use a flat fee MLS company, be prepared. Create a game plan and execute it well in order to maximize your selling potential. Know when you are in over your head and have an alternative ready to go. Avoid ignoring the data. If you are lacking showings, make pricing adjustments. Invest in high-quality photography. Know what your days on market average are. Be objective when doing comps on your home. The more emotional detachment you have, the better chance you have of getting a great price for your home.
Flat Fee Realtors
Many people often confuse flat fee MLS listings with flat fee Realtors. The difference between the two is huge. Flat fee Realtors are generally real estate agents that work for a non-tradition commission. The level of service they provide is usually the same as a traditional agent or a limited version of a traditional agent.
These agents work on your behalf and represent you in the real estate transaction. Licensed agents carry proper E&O insurance and can limit the amount of legal exposure you have if something goes sideways. Most agents understand the legal ramifications of real estate and can keep you out of serious trouble. More importantly, good flat fee Realtors can help you maximize your sale price while reducing your cost.
Not all flat fee Realtors are created equal. Before you sign with a flat fee Realtor, do your research. Make sure you are choosing to work with a reputable company that won’t leave you hanging. Just because a Realtor is less expensive does not necessarily mean they are good. All industries have under-performers. Flat fee Realtors are no different.
A good flat fee Realtor will have the following:
- Proven track record with a history of sales.
- At least 40 or more active listings.
- An annual sales history with a minimum of 100 homes sold per year.
- No upfront fees or cost.
- No binding contracts. You should be able to cancel anytime.
- No cost or fee associated with canceling your listing.
- No hidden cost or fees
- Stellar reviews. At least 50 5-star ratings or more.
There is nothing wrong with trying out new flat fee Realtors or companies that may not have the volume. Just make sure there are no binding contracts or money upfront. Companies that are trying to hold you through contracts or take your money before selling your home are companies you should avoid at all costs. Any company or service in this space that is confident in its abilities will not any issues abiding by these two things. How long they have been in business should not matter.
Read the Small Print
Whether you decide to list with a traditional agent, a flat fee MLS provider, or a discount agent, always read the fine print. Understand what level of service they are providing you and what your risk exposure is. Remember, saving money is good but balance is best.
Most people don’t read the small print when signing up with a flat fee MLS service. They simply think that they pay their flat fee and that is the end of it. Many flat fee companies have hidden costs. These costs are usually discovered when you need to make a change to your listing or decide to cancel. For example, flat fee MLS companies are notorious for charging fees if you decide to change things like price, add photos, or alter the description.
At BlueMatch, the average person will make up to 6 changes to their MLS listing. A flat fee MLS service can charge anywhere from $20-$50 per change. Even if they make a mistake with your listing, you may still be liable for this fee. This can add up really fast. Canceling your listing can also come with additional charges. Let’s say you sell your home in the first week but you are signed up for 90 days with a flat fee MLS. You can either have your phone ring for 80 more days or pay a cancelation fee. Neither option seems very fun.
If you are thinking of selling your home and are looking for great alternatives to traditional agents, give us a call at BlueMatch. BlueMatch employs salaried agents that are here 7 days a week. Schedule your free 15-minute consultation today!