Comments on: Pros and Cons of Flat Fee MLS Real Estate http://ericbramlett.com/pros-and-cons-of-mls-flat-fee-real-estate/ Click here to search all Austin real estate for sale! Eric Bramlett is a full service Austin real estate broker specializing in buyer, seller, and investor representation. Tue, 31 Jan 2012 21:25:22 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: Dorie Hillshttp://ericbramlett.com/pros-and-cons-of-mls-flat-fee-real-estate/#comment-6850 Dorie Hills Thu, 22 Oct 2009 21:12:54 +0000 http://www.ericbramlett.com/blog/pros-and-cons-of-mls-flat-fee-real-estate/#comment-6850 I have considered offering flat fee services for many reasons and providing substandard services isn't one of them.Homes should be listed and fees established on a case by case basis. No home or seller situation is alike. Quite often the $100k listing is a longer and more difficult process than a $500k listing. The work is almost identical in many instances. However, I disagree with the idea that you pay more to list because you paid more to buy. Who are we to demand %3 to 6% of a sellers equity. Full Services Agents don't always provided the level of service or expertise that they should. Many full service agents provide the same service as a flat fee agent and make 5 times the commission. We are all independent business owners and we should be able to run our businesses based on our own personal and business goals and objectives. Most full service agents charge 6% because they are on a 50/50 split with their broker not because they provide superior service. Consumers need to understand how the break down of commission works.So let's do the math... You list a $100k home. It sells for $100k. The full commission to the listing agent/firm is (3%) $3000. Let's say you're on a 50/50 split. Your earnings is $1500. How much money did you spend listing the home. For example purposes let's say you spend $300. This brings the listing agents net earning to $1200. Selling a property should be a partnership between the listing agent and the seller. You each must do your part to ensure the home sells. Sellers are required to keep their home in showing condition at all times. That is a lot of work for most working people.If a flat fee service provider is serious about their business and are in it for the long haul, it does not make sense to build a bad reputation for their business by slapping a home in MLS, collecting a fee and it never sell. Therefore, why are we assuming that is all a flat fee service provider does. They should still provide a CMA as well as other marketing services. The real problem is the issue with price fixing. Because the large brokerage firms fight against this form of business in addition to MLS Boards they try to make it difficult to effectively run a Flat Fee business. You are not allowed to provide "full service" and charge the same fee to every seller or you will be accused of price fixing. Therefore, the solution is to base your fees on several factors which include the unique aspects of the home as well as the unique aspects of the sellers financial situation, equity, etc. Lastly, the commission says there is no standard fee. 6% is not a set fee and if your files are audited, every listing should not have the same listing fee.Main point… there is no guarantee that you will get “full service” by paying 6%. Let’s consider another factor, DOM (days on market). If your home is in highly desirable community and the comps indicate an average days on market as 42 days, why should you pay 6% to sell your home? The “full service” agent does minimal work and pockets your equity. This doesn’t sit well with me. Therefore, I would like to reiterate the position that the fees should be based on many factors not the standard 6% that most listing firms charge. Again, one major factor in the fees charged is the agent/broker firm split. Because an agent chooses to work independently and charge a lower fee does not mean they provide a lower level of service. The difference is there financial goals are different than yours. So for the sellers reading this, keep in mind that all agents are not created equal, all compensation/commission splits are not created equal. Before you say no to the agent that offers discounted fees, understand their business model may be very different that the next agent. Don’t assume it’s because they are incompetent or offer substandard service. The real fear here is COMPETITION. With today’s technology, large firms are shaking in their boots that agents won’t need them anymore to have a successful business. The fee is 6% because it’s split four ways! Not because the service is better! I have considered offering flat fee services for many reasons and providing substandard services isn’t one of them.

Homes should be listed and fees established on a case by case basis. No home or seller situation is alike. Quite often the $100k listing is a longer and more difficult process than a $500k listing. The work is almost identical in many instances. However, I disagree with the idea that you pay more to list because you paid more to buy. Who are we to demand %3 to 6% of a sellers equity. Full Services Agents don’t always provided the level of service or expertise that they should. Many full service agents provide the same service as a flat fee agent and make 5 times the commission. We are all independent business owners and we should be able to run our businesses based on our own personal and business goals and objectives. Most full service agents charge 6% because they are on a 50/50 split with their broker not because they provide superior service. Consumers need to understand how the break down of commission works.

So let’s do the math… You list a $100k home. It sells for $100k. The full commission to the listing agent/firm is (3%) $3000. Let’s say you’re on a 50/50 split. Your earnings is $1500. How much money did you spend listing the home. For example purposes let’s say you spend $300. This brings the listing agents net earning to $1200. Selling a property should be a partnership between the listing agent and the seller. You each must do your part to ensure the home sells. Sellers are required to keep their home in showing condition at all times. That is a lot of work for most working people.

If a flat fee service provider is serious about their business and are in it for the long haul, it does not make sense to build a bad reputation for their business by slapping a home in MLS, collecting a fee and it never sell. Therefore, why are we assuming that is all a flat fee service provider does. They should still provide a CMA as well as other marketing services. The real problem is the issue with price fixing. Because the large brokerage firms fight against this form of business in addition to MLS Boards they try to make it difficult to effectively run a Flat Fee business. You are not allowed to provide “full service” and charge the same fee to every seller or you will be accused of price fixing. Therefore, the solution is to base your fees on several factors which include the unique aspects of the home as well as the unique aspects of the sellers financial situation, equity, etc. Lastly, the commission says there is no standard fee. 6% is not a set fee and if your files are audited, every listing should not have the same listing fee.

Main point… there is no guarantee that you will get “full service” by paying 6%. Let’s consider another factor, DOM (days on market). If your home is in highly desirable community and the comps indicate an average days on market as 42 days, why should you pay 6% to sell your home? The “full service” agent does minimal work and pockets your equity. This doesn’t sit well with me. Therefore, I would like to reiterate the position that the fees should be based on many factors not the standard 6% that most listing firms charge. Again, one major factor in the fees charged is the agent/broker firm split. Because an agent chooses to work independently and charge a lower fee does not mean they provide a lower level of service. The difference is there financial goals are different than yours. So for the sellers reading this, keep in mind that all agents are not created equal, all compensation/commission splits are not created equal. Before you say no to the agent that offers discounted fees, understand their business model may be very different that the next agent. Don’t assume it’s because they are incompetent or offer substandard service. The real fear here is COMPETITION. With today’s technology, large firms are shaking in their boots that agents won’t need them anymore to have a successful business. The fee is 6% because it’s split four ways! Not because the service is better!

]]> By: michaelson lisahttp://ericbramlett.com/pros-and-cons-of-mls-flat-fee-real-estate/#comment-5475 michaelson lisa Sun, 26 Apr 2009 14:46:00 +0000 http://www.ericbramlett.com/blog/pros-and-cons-of-mls-flat-fee-real-estate/#comment-5475 Some more tips would help in a lot of ways. Any more information and experiences is appreciated. Some more tips would help in a lot of ways. Any more information and experiences is appreciated.

]]> By: Sam Chapmanhttp://ericbramlett.com/pros-and-cons-of-mls-flat-fee-real-estate/#comment-2960 Sam Chapman Sun, 14 Sep 2008 19:26:12 +0000 http://www.ericbramlett.com/blog/pros-and-cons-of-mls-flat-fee-real-estate/#comment-2960 I wonder if buyers out there see the flat fee listings sort of like FSBOs. Do these buyers assume that since the sellers are going with a discounter that they can lowball like they do the FSBO folks? The same can be said about people not using a buyer's agent. They assume that they can knock 3% off the price going it on their own. I wonder if buyers out there see the flat fee listings sort of like FSBOs. Do these buyers assume that since the sellers are going with a discounter that they can lowball like they do the FSBO folks? The same can be said about people not using a buyer’s agent. They assume that they can knock 3% off the price going it on their own.

]]> By: Schwansonhttp://ericbramlett.com/pros-and-cons-of-mls-flat-fee-real-estate/#comment-2396 Schwanson Fri, 30 May 2008 14:59:53 +0000 http://www.ericbramlett.com/blog/pros-and-cons-of-mls-flat-fee-real-estate/#comment-2396 I have found a lot of people do not understand what a the flat fee listing actually is. Education would be key if your company is going to market this as a product. Let it be known they will pretty much have to act like a fsbo with the exception that their home will be listed in the MLS. I have found a lot of people do not understand what a the flat fee listing actually is. Education would be key if your company is going to market this as a product. Let it be known they will pretty much have to act like a fsbo with the exception that their home will be listed in the MLS.

]]> By: Eric Bramletthttp://ericbramlett.com/pros-and-cons-of-mls-flat-fee-real-estate/#comment-2181 Eric Bramlett Wed, 23 Apr 2008 14:05:45 +0000 http://www.ericbramlett.com/blog/pros-and-cons-of-mls-flat-fee-real-estate/#comment-2181 Thanks for the update, Bob. We actually offered this a couple of years ago, but discontinued it after a couple of attempts. We found that the clients usually wanted more service than a "flat fee" and it tended to cause a weird situation between the agent & client. It just wasn't for us. Thanks for the update, Bob. We actually offered this a couple of years ago, but discontinued it after a couple of attempts. We found that the clients usually wanted more service than a “flat fee” and it tended to cause a weird situation between the agent & client. It just wasn’t for us.

]]> By: Bobhttp://ericbramlett.com/pros-and-cons-of-mls-flat-fee-real-estate/#comment-2180 Bob Wed, 23 Apr 2008 02:32:45 +0000 http://www.ericbramlett.com/blog/pros-and-cons-of-mls-flat-fee-real-estate/#comment-2180 Here's an update. It's been almost 2 months since we have offered this service and not ONE request. We have received requests for our full service listing service however. Here’s an update. It’s been almost 2 months since we have offered this service and not ONE request. We have received requests for our full service listing service however.

]]> By: Joshua Ferrishttp://ericbramlett.com/pros-and-cons-of-mls-flat-fee-real-estate/#comment-1811 Joshua Ferris Fri, 29 Feb 2008 21:04:57 +0000 http://www.ericbramlett.com/blog/pros-and-cons-of-mls-flat-fee-real-estate/#comment-1811 Thanks Gary for showing us exactly why flat fee is flat fee. Thanks Gary for showing us exactly why flat fee is flat fee.

]]> By: Bobhttp://ericbramlett.com/pros-and-cons-of-mls-flat-fee-real-estate/#comment-1809 Bob Fri, 29 Feb 2008 18:55:51 +0000 http://www.ericbramlett.com/blog/pros-and-cons-of-mls-flat-fee-real-estate/#comment-1809 I went to Gary's site and I find it interesting that he charges much more than most flat fee services for his low end service AND he only allows one photo in the MLS. Most MLS's allow multiple photos and with the sea of inventory out there today, I know in my market one photo would not generate any interest. Gary what's up with that? Why only one photo? And, what do you do if the home doesn't sell? I went to Gary’s site and I find it interesting that he charges much more than most flat fee services for his low end service AND he only allows one photo in the MLS. Most MLS’s allow multiple photos and with the sea of inventory out there today, I know in my market one photo would not generate any interest. Gary what’s up with that? Why only one photo? And, what do you do if the home doesn’t sell?

]]> By: Eric Bramletthttp://ericbramlett.com/pros-and-cons-of-mls-flat-fee-real-estate/#comment-1808 Eric Bramlett Fri, 29 Feb 2008 18:51:03 +0000 http://www.ericbramlett.com/blog/pros-and-cons-of-mls-flat-fee-real-estate/#comment-1808 Gene -Check out the link on Gary's name. There are a lot of unbundled/flat fee guys out there that realize they have a specific niche, that full service agents also fill a need, and are great to interact with. Then there are guys like Gary. Gene –

Check out the link on Gary’s name. There are a lot of unbundled/flat fee guys out there that realize they have a specific niche, that full service agents also fill a need, and are great to interact with. Then there are guys like Gary.

]]> By: TheDexterhttp://ericbramlett.com/pros-and-cons-of-mls-flat-fee-real-estate/#comment-1806 TheDexter Fri, 29 Feb 2008 16:06:27 +0000 http://www.ericbramlett.com/blog/pros-and-cons-of-mls-flat-fee-real-estate/#comment-1806 Gary, that is SO untrue.A qualified full service agent will share his or her online and offline marketing strategies including but not limited to; viral, peer to peer, whisper campaigning, bulk e mail, print, social netowrking (web 2.0), staging, open houses, CMA (analysis), and overall handholding.If you do not understand what one or more of the above methods are, then consider an experienced real estate agent.Sincerely,Gene Dexter RE/MAX Integrity Seattle Gary, that is SO untrue.

A qualified full service agent will share his or her online and offline marketing strategies including but not limited to; viral, peer to peer, whisper campaigning, bulk e mail, print, social netowrking (web 2.0), staging, open houses, CMA (analysis), and overall handholding.

If you do not understand what one or more of the above methods are, then consider an experienced real estate agent.

Sincerely,

Gene Dexter
RE/MAX Integrity
Seattle

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