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Flat Fee MLS--not an option

Posted by weedyacres (My Page) on
Tue, Mar 13, 12 at 14:43

Well, it turns out there's a little restraint of trade going on with MLS in my little neck of the woods. They have exhorbitant initiation fees and arduous testing and continuing education requirements that basically keep discount brokers out. I called around a lot of places I found on the web who said they don't cover my county, and one guy spilled the beans on why not.

Our plan had been to do a flat fee MLS listing, take on the grunt work of marketing (photos, staging, pricing) in return, and offer 3% commission to buyer's agents. But now it appears we can't do that.

I can get a realtor.com listing for $69 or so, but not being on the MLS is definitely a handicap. So, what do you experts suggest as options to minimize our selling fees? There is a broker here that does 5% fees (3% to buyer's agent) for a package with no open houses and no print advertising. Are agents likely open to negotiation of their fees based on doing fewer things that take time & money? If we went FSBO with 3% to buyer's agent, and promoted the heck out of it to the local agents, would they bite or boycott?

Other ideas? This is really frustrating that we don't have the option to choose a lesser level of service if we want.


Follow-Up Postings:

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RE: Flat Fee MLS--not an option

Hmm, I kind of think that arduous testing and continuing education for RE professionals is a good idea. I don't think that the reason is to keep discounters out. Testing and education is usually mandated by the state.


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RE: Flat Fee MLS--not an option

Realtor.com is an MLS service;
Realtors' MLS listings are automatically entered in Realtor.com.
If your listing is not in MLS (ie, listed with a Realtor/member), you cannot get the listing in Realtor.com.

I don't know why you cannot find a flat-fee broker in your area, but, as Terri says, the testing & MCE are state-mandated for licensees & don't have anything to do with marketing or industry trade associations.


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RE: Flat Fee MLS--not an option

Curious, are you trying to sell RE and have the clients pay less fees? Or are you trying to sell your house yourself. Maybe if you discussed this with the State Board, you could get a clarification of fees--and what agents can or cannot do legally.


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RE: Flat Fee MLS--not an option

Yes, some testing and education is mandated by the state, but licensing requirements (for RE as well as plenty of other trades and occupations) are typically pushed for by those already in the biz, under the guise of helping the public, but in fact the effect is to limit competition. Helps the providers, hurts the consumers.

And the extra training/testing are a local MLS requirement, not a state requirement.

But the point of my post is not to get into a political debate. It's to help solve my real problem of trying to minimize the transaction costs of selling my house. I fear that the agents among you may not care to help me avoid paying realtor fees, but I'm not asking anyone to work for free. I'm asking them to do less work for less fee. So if you could answer the questions about whether you'd "bite or boycott" a FSBO paying buyer's agent fees, it'd help me understand the mind of an agent and determine the best option.

Sylvia, I believe the realtor.com listings get it on there through their own MLS or something. It's a very real option out there.


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RE: Flat Fee MLS--not an option

Weedy,
Yes, I show FSBO's that are willing to pay at least 50% of the normal listing fee. The problem for you is that you just will not be exposed to agents and buyers that have agents like you would if you were in the MLS. Also, there is so much inventory out there that the incentive for buyers and agents is not there to take the extra steps to look at the FSBOs.
It has nothing to do with agents blacklisting FSBOs.


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RE: Flat Fee MLS--not an option

As an agent I would show ANY house that fit my buyers criteria, IF I COULD FIND IT. How do you plan on getting the exposure that agents can get your home? Right now there is usually enough on MLS alone to find buyers what they are looking for. There is no need to search any where else.

Agents will not be looking for you. If you want to do alot on your own, you would need to figure out a way to have your home exposed to them without them really looking for it.


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RE: Flat Fee MLS--not an option

The only way that your FSBO is going to work in your locale is if you spend a lot of money. Host several agent open houses with great food and prize giveaways. Not cheesy little gifts either. I'm talking some nice things, like Ipods etc. Make up some great invitations to the open house and go around to each and every agent and invite them personally. If every agent that shows up gets an Ipod, then you have created an incentive to learn about your house. Then you have a "grand prize" for the agent who brings you a buyer. Give them slightly above market rate share of the commission. If the standard market rate is 6% and they would get 3% split between the buyer and seller realtors, offer 4% PLUS the "grand prize" of something like a cruise or resort vacation. You can't get in on the listing structure, so you'll have to work VERY hard at making your listing known to realtors and worth their while to sell.

Of course, it might just be cheaper in the long and short of it to just list with a full service agent. The time and money spent to do things the hard way might end up being more than just getting on the MLS and paying full price.


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RE: Flat Fee MLS--not an option

OK, that's good to know that most buyer's agents wouldn't boycott, and that it's a matter of doing a lot of grunt work getting the word out.

There are currently only 5 houses on the market in my zip code in a $100,000 price range centered on our listing price. So I don't think we'd necessarily be lost in the crowd IF the agents knew about us.

I was thinking it should be pretty easy to get all the agents' email addresses, from their web sites, etc. since they specialize in being contact-able. :-) Would they be likely to read a professionally-done email (I'm thinking something like you do with Constant Contact or the like, with photos and descriptions)? It doesn't seem practical to meet them all personally, since they're always on the go.

I like the idea of a broker's open in conjuction with the publicity. It's not in the budget to give away ipods to everyone, but holly got my mental juices going. :-)

This is definitely all time-consuming stuff, and all to offset the fact that my local MLS has a $15,000 entry fee (the 3% seller's agent commission I'd like to avoid). Sure wish I had the $499 option.


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RE: Flat Fee MLS--not an option

"This is definitely all time-consuming stuff, and all to offset the fact that my local MLS has a $15,000 entry fee (the 3% seller's agent commission I'd like to avoid). Sure wish I had the $499 option."

I don't understand. A full service listing at 6% for a $100,000 home is $6,000. Where is the $15k coming from?


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RE: Flat Fee MLS--not an option

Try the one below and see if they cover your area.

Here is a link that might be useful: BuySelf Flat Fee MLS Listings


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RE: Flat Fee MLS--not an option

>I don't understand. A full service listing at 6% for a
>$100,000 home is $6,000. Where is the $15k coming from?

The $100K is the range that there's 5 houses listed: our price +/- $50K. We're in the low-500's range listed (top 10% of the market price-wise). $500K x 3% = $15K.

Sorry for the confusion.


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RE: Flat Fee MLS--not an option .

The link you provided is one that I called yesterday. No coverage. :-( Thanks for the suggestion, though!


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RE: Flat Fee MLS--not an option

I am buying a new car this weekend. I could sell my trade in myself and net more cash but I will probably opt for letting the dealer handle the trade in even though I will net less. For me, it is worth not having to deal with marketing and advertising the car, and not having to worry about the timing of trying to sell the thing myself.
I wonder if it is "a restraint of trade" because the dealer will not allow me to put my car on his lot (where it will be exposed to the most able, willing and ready buyers), for a nominal fee?


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RE: Flat Fee MLS--not an option

OK, so you maybe give away 10 of the Ipod Nano's at the broker open house (must be present to win) and everyone else gets a flash drive as a party favor. Everyone puts their business card in a bowl when they enter so you can keep in touch with them if your listing has any changes and you'll pull the name of the winners of the prizes out. It should be enough that people feel that they have a good chance of getting one, and it should be an attractive techie piece like an Ipod--or Blue-Ray etc. Getting agents IN the door @ excited about selling the house is the key. Bribery Prizes is one way to do this! Think of it as hosting a birthday party for a not so popular kid whom you want to help to make popular. Give a prize to the realtor with the most showings as well as the one who brings you the first written offer. It's about creating buzz.

Then work on making the Grand Bribe Prize paid at closing really notable and exciting. Yes, the money paid at closing is exciting, but so are the alternate rewards----sometimes even more so than collecting a commission.

Here is a link that might be useful: Nano @ Amazon


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RE: Flat Fee MLS--not an option

Would hiring a couple of attractive actors to show the realtors around the property at the party be the real estate equivalent of hiring a clown for a the kids birthday party? :) I know an agent who used to do this for open houses. Sometimes he would use them as "shill" couples walking around exclaiming about how they'd better hurry and put an offer in and wasn't that master tub just going to be perfect for candlit soaks together. Sometimes they would just act as hosts. It's surprising how much better a home looks with a pretty girl or handsome guy telling you about it---even if they aren't included in the purchase. LOL! He just used talent from the local college and paid them $150 to dress up and learn their "lines".


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RE: Flat Fee MLS--not an option

Does Zillow cover your area? If so you can claim your house and set a make-me-move price and it will show up as FSBO on Zillow. As unlikely as this seems, I'm closing escrow on a house this week that I found as a MMM on Zillow. It's probably a very long shot, but my experience is proof that it can work.


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RE: Flat Fee MLS--not an option

holly/live wire: Thanks for the ideas on the broker's open. They get my creative juices going. :-)

NC: I sell my own cars too. It IS worth it to me to do the extra work to pocket the extra cash. I don't typically buy from dealers either, unless it's a new car. I'm not mad at them for existing, I just prefer to pay less/get more for my cars than if I were to do it through a dealer. Same with realtors. I'm fine with the full-service option being available. I'm just frustrated when the industry isn't more customer-focused in providing a different model for those who would prefer that option. It has happened in some markets, but in ours, those brokers that would like to do so are (so far) locked out. "Restraint of trade" was the term the broker used, not mine. In your analogy, I have no problem with that dealer not letting you consign your car in his lot. But if he tried to keep other car dealers from doing so (by rules or local ordinances), or tried to get laws passed against "sell yourself" lots, then it would be restraint of trade.

AK: Zillow is now in our area. As late as last summer it wasn't. Your question made me look it up, so now I've got one more option to get the word out.

Phoggie's experience with putting out her sign and writing letters to all the area realtors is encouraging too. Any more details, phoggie?

I found the local realtor association web site and can get all 700+ emails off of it, albeit manually. :-( I'm thinking a Constant Contact-type email to everyone, with links to a website with professional photos and details about the 3% commission and broker's open, for starters.


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RE: Flat Fee MLS--not an option

my .02 cents :)

We tried a flat fee listing from 2007-2009. We had plenty of showings but no sale. Before we listed our house we had heard that realtors wouldn't show a FSBO listing. We couldn't believe it -don't they work for their client? If our house had all the qualities that a buyer wanted -why wouldn't they show it? We were willing to pay the 3% buyers realtor's fee. I discovered that was indeed the reality. They showed our house, but I have a feeling it was more b/c of their client's urging than their own. We had 1 realtor who did show our house twice -to 2 different clients. Both of these clients highly considered our house. We are planning on putting our house back on the market soon and are 95% sure we'll be using that realtor. I'm still not super excited about the 6% fee but also know that it will get more foot traffic (especially in this horrendous market) than if we try and sell it on our own.

Also, I am shocked that your state allows the realtor's to box out FSBO like that. That alone would make me want to FSBO my house. I'd probably see about getting the law/regulation changed -that's ridiculous.


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RE: Flat Fee MLS--not an option

Weedy, don't know if this will help, but when we first listed our house, our Realtor had a brokers open house. She had breakfast (bagels, pastries, coffee, juices). She then arranged a catered lunch for agents coming in the afternoon. I don't know what she had but it must have been good as there was a lot of traffic (neighbors on our street reported).

I thought it was clever as most busy agents would like something to eat either morning or afternoon.

The agents at the open house, filled out a sheet with their impression of the house and we found the comments helpful. Many made comments about the price as well.

The luncheon was set up outside, by the pool and it was quite lovely. My neighbors told me there were so many cars and people sitting down by the pool.

Just an idea,

Jane


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RE: Flat Fee MLS--not an option

Weedy

I realize the major discount/flat fee brokers aren't in your MLS. But...what about trying to negotiate a reduced rate with one of the "regular" brokers in your area in return for you doing more of the work? You only need one broker to agree....


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RE: Flat Fee MLS--not an option

Weedy,
First off, don't take the following the wrong way. I am a DIYer myself. But the MLS is not a public entity. It is a PRIVATE association, put together, maintained and financed by agent members. Those members can, and have, in some cases, established rules concerning the actions of its members. The MLS is not yours, it does not belong to the sellers and it is not owned by buyers. The highest courts in the land have repeatedly confirmed this. No one is stopping you, nor hindering your effort to sell your home w/o the use of a full service listing, which is the criteria that this MLS has set for its members. I can not demand that I post my listings on your web site, and vice versa.


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RE: Flat Fee MLS--not an option

kats: that's a good point. I imagine that a number of realtors will contact me when they see the FSBO to try and get the listing. I can lay out my desire for a reduced-services contract and see if anyone bites. In my email-culling efforts, I found one agency that has a deal where if you buy with them you can sell your house for free (no commission). I'll be buying in a different area, so can't do that, but perhaps that means they're open to a flat-fee MLS type of deal. I'll give them a call too.

NC: No offense taken (and none intended with my following remarks). I understand the MLS is a private association, and don't consider myself entitled to a discount (or any) listing. But our local MLS has decided to put rules in place that make it difficult/impossible for members to discount and/or offer more competitive and appealing to customers. I think the real estate industry for the most part has its head stuck in the sand about the need to change, and they're trying their darnedest to preserve their 6% model in the day and age where buyers and sellers could be brought together much less expensively. I wish they'd change. And I'm frustrated that those in the industry that are trying to change to satisfy customers better, are locked out of doing so.

It MAY be legal. But Visa & Mastercard had a similar argument (we're a private organization with contracts with merchants, we can decide on whatever merchant fees we want and they can opt out) but the justice department eventually had something to say about that, because they're monopolies.

In other news, we went to a couple open houses over the weekend, and one agent mentioned the low inventory right now as a problem (that bodes well for us). Of course, that could be like the car dealers that send you postcards saying "we really need your used car" when they mean "we want to sell you a new one."


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RE: Flat Fee MLS--not an option

Weedyacres, can you find a new and hungry agent to work with? Someone who for the experience of working with you and your property would give you a discount rate? I ask because that person was me when I started as an agent two years ago. I needed to WORK...you cannot learn all about any job until you start doing it. I had one listing at 4%...3% to the buyer's agent and a measley 1% to me...I worked my tushy off for those folks and enjoyed every moment of it. The experience I gained far outweighed the commission I earned.

I don't do reduced listing fees now, but those three newbie listings certainly got my feet wet and made good things happen for my clients.


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RE: Flat Fee MLS--not an option

To OP,

I think you should negotiate the commission with a full service agent instead of DIY. I know you want to save money, but an experienced agent can do a lot of things for you to earn that extra percent or so. There are many things in RE transactions that a home owner are not prepared to handle. When every duck is in line, selling a house DIY is great. But when there is a problem, the experiences kick in.

That is why most FSBO ended up with an agent.


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