What Is A Flat Fee MLS Listing Service and Will it Hurt My Home Sale?
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Jennifer Schmidt, Contributing AuthorClose
Jennifer Schmidt Contributing AuthorJennifer Schmidt is a freelance writer based in Vancouver, Washington, who specializes in real estate, human resources, and technology. When not writing, you’ll find her scanning real estate listings for the latest housing trends and decorating ideas.
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Richard Haddad, Executive EditorClose
Richard Haddad Executive EditorRichard Haddad is the executive editor of HomeLight.com. He works with an experienced content team that oversees the company’s blog featuring in-depth articles about the home buying and selling process, homeownership news, home care and design tips, and related real estate trends. Previously, he served as an editor and content producer for World Company, Gannett, and Western News & Info, where he also served as news director and director of internet operations.
You’re a weekend warrior who enjoys tackling home projects to save money. So, why not apply the same approach to selling your home? By using a flat fee MLS listing, you could save thousands of dollars in real estate commissions*, keeping more money in your pocket. But is selling your house yourself truly worth the time and effort?
If you’re considering going the For Sale By Owner (FSBO) route and enlisting the help of a flat fee MLS listing service instead of a real estate agent, this guide will help you navigate all the pros and cons.
*Agent commission percentages are expected to change following a landmark NAR settlement that will “decouple” seller and buyer agent compensation.
Unsure about selling FSBO?
If you don’t have the time or expertise to list your home FSBO, partner with a trusted, top agent in your market. We analyze over 27 million transactions and thousands of reviews to find you the best agent for your unique situation.
What is a flat fee MLS listing service?
A flat fee MLS is a limited service that helps sellers get their FSBO homes on the local multiple listing service (MLS). The MLS is a private directory of for-sale homes that real estate professionals use to share home details with each other.
Because the local MLS is one of the best ways to market your home to potential buyers and get maximum exposure, it’s vital to list your home on the local MLS.
Although typically only licensed real estate agents can access and post listings on a local MLS, there are a number of different services that provide MLS services for a flat fee. These flat fee MLS companies enable FSBO sellers to bypass the traditional agent and get their home included on the MLS.
Is a flat fee MLS listing service the right choice for me?
Saving on real estate commissions sounds appealing to most people, but you might still be unsure about taking on the role of a real estate agent yourself.
“If you have somebody who just wants MLS access and is very competent, understands the legal ramifications and process of selling a home, might understand some construction things, has the time to have showings, deal with the phone calls, and the back and forth that is part of that process, maybe have some sort of marketing background as well, you might not need the services of a real estate agent,” says Joe Bourland, a top-selling agent in Peoria, Arizona, with more than 23 years of experience.
Bourland explains that while a flat fee service can save you money up front, it comes at a cost. You may lack the expertise and effort required to negotiate effectively, potentially leading to less savings in the long run.
On the other hand, you might like being very involved and are confident that no one else fully understands all the features of your home. But doing the majority of the work yourself means you’re also directly responsible for the results. As you consider your options, here are some of the benefits and drawbacks of using a flat fee MLS listing service.
Pros and cons of using a flat fee MLS listing service
Pros
- No listing agent real estate commission, typically 2.5% to 3%
- Control of all aspects of the sale from start to finish
- Known costs are paid up front for selling the property
Cons
- Flat fee + possible commission to buyer’s agent of 2.5% to 3%
- Responsibility for addressing any issues that arise to protect sale
- Mostly a self-service process that involves a lot of your time and energy
How does a flat fee MLS listing service compare to a traditional real estate agent?
- Personalized service is lacking vs. having an agent who can answer your questions immediately
- Paying a flat fee mostly buys MLS access vs. a tailored marketing strategy plus MLS access
- You resolve setbacks during the process vs. relying on a professional who handles any issues
Using a top real estate agent involves more than just getting your home listed on an MLS site. This is the first step in a marketing strategy designed to attract a specific pool of buyers to your home, setting it apart from other available properties. A top-rated agent who has sold dozens or even hundreds of homes in your area has the advantage of knowing current market trends, and how to sell faster with the best results.
So, how do you find a top agent? HomeLight can connect you with agents in your market who fit your selling situation. Our research shows that the top 5% of real estate agents nationwide typically sell homes for as much as 10% more than average real estate agents.
How does a flat fee MLS listing service compare to a traditional real estate agent?
- Personalized service is lacking vs. having an agent who can answer your questions immediately
- Paying a flat fee mostly buys MLS access vs. a tailored marketing strategy plus MLS access
- You resolve setbacks during the process vs. relying on a professional who handles any issues
Using a top real estate agent involves more than just getting your home listed on an MLS site. This is the first step in a marketing strategy designed to attract a specific pool of buyers to your home, setting it apart from other available properties. A top-rated agent who has sold dozens or even hundreds of homes in your area has the advantage of knowing current market trends, and how to sell faster with the best results.
So, how do you find a top agent? HomeLight can connect you with agents in your market who fit your selling situation. Our research shows that the top 5% of real estate agents nationwide typically sell homes for as much as 10% more than average real estate agents.
Will I really save money selling FSBO with a flat fee MLS listing service?
While you can save a significant commission by listing your home FSBO, the actual savings might diminish when you factor in the cost of your time. The ultimate profitability depends on your effectiveness in finding the right buyer, which will determine if FSBO was the best financial choice when the sale closes.
According to data from the National Association of Realtors (NAR), FSBO homes sold at a median price of $310,000 last year compared to agent-assisted homes that sold at a median price of $405,000 — nearly a 23.5% difference.
Find a Top-Rated Real Estate Agent Near You
FSBO listings statistically sell for less than agent-assisted sales. HomeLight analyzes over 27 million transactions and thousands of reviews to determine which agent is best for you based on your needs.
How much does a flat fee MLS listing service cost?
Flat fees for MLS listing services can vary depending on the type of services you’ll need during the home-selling process. It might cost only $300 for a standard listing on the MLS, or up to $5,000 if you decide to purchase additional services such as an agent’s help with marketing, paperwork and the final negotiation.
In addition to your fee, you’ll likely have to pay a buyer’s agent commission. “Most flat fee services tell people to offer up 2.5% to 3%, so the seller is still paying that to whoever represents the buyer as an incentive to bring a buyer to the property,” Bourland says.
What is the best flat fee MLS listing service?
Even though you’re paying a flat fee, MLS listing services generally offer different levels of service. Some will offer a bare bones listing of your home on the MLS, while others will give you tons of options for added costs. How do you find the perfect fit when not just any MLS will do? Before committing to a flat fee MLS listing, consider the following:
Location, location, location
Since you’re selling your home locally, you want your listing to be local, too. There are hundreds of MLS databases covering various regions within each state. Listing your home locally ensures that local agents, who are familiar with your housing market, will see your listing, unlike agents from other areas who may not know your market as well.
Research and reviews
Research the company you are considering using for your listing. Do they have a lot of positive or negative reviews? Are they a member of the Better Business Bureau? Do they have a professional website that is helpful for answering questions? Do they include an easy way to contact them, or are they more elusive? Before choosing a particular company, ensure it has a good reputation, as this will also attract real estate agents with potential buyers.
Solid Communication
Bourland says good communication is key, relaying a story of how one homeseller had to terminate their listing agreement because their calls were never returned by their flat fee MLS company after listing the property. This lack of communication can be frustrating to the buyer, seller and agent when you’re trying to negotiate a deal, and answers aren’t being given in a timely manner.
Reputable and well-established flat fee MLS listing services include:
Does using a flat fee listing service hurt a home sale?
Which MLS company you use and how you market your property often will determine the success of your home sale. Here are some additional questions sellers have about how a flat fee MLS might affect a home sale:
“As real estate agents and Realtors®, we have an obligation to have a fiduciary duty to our client,” Bourland says. “So if there’s a listing that fits our client’s needs, based on the criteria we have been provided by the buyer, we’re obligated to show them the house regardless of who’s listed it.”
The obligation Bourland is referring to is part of the Code of Ethics and Standards of Practice agents agree to when they become members of NAR. Agents who are not members of the association have not specifically pledged to uphold these standards.
Typically, yes, because a top agent will do a comparative market analysis (CMA) and price the house properly, as opposed to the seller who may price the home too high and not find interested buyers until the price is adjusted to match comparable homes. Industry experts agree that one of the most important steps when selling a house is to price it right — not too high, not too low.
When listing your home, be sure to include the best features, such as a large kitchen and back yard. Details like gutter filters and high efficiency light bulbs are nice to have once you move into a house but won’t be the deciding factors for buyers who are more interested in where they are going to put their couch. Also, some MLS websites will limit the number of photos you can include with your listing. You always want to use high quality photos that aren’t dark or blurry and will showcase the best features of the home.
“The narrow phone picture that doesn’t show anything but a toilet is not the best image that you want to display,” Bourland says.
As a FSBO seller, where else can I list my home?
If you’re not interested in paying for a flat fee MLS listing service but still want to list your house FSBO, there are other sites you can choose from, including:
- Zillow (Free – For Sale By Owner)
- Facebook Marketplace
- ForSaleByOwner.com
Consider these 4 factors before you list with a flat fee MLS service
Whether you choose to use a flat fee MLS listing, agent or alternate site for selling your home, consider the following:
Involvement: The time and energy you want to devote to your home sale
Profit: Calculate the potential profit you might get depending on the final sale price
Research: Review the company and clarify what services you’ll get for your flat fee
Support: What resources will be available to answer your questions during the process
If you’d like to connect with a top real estate agent to learn more about what might be the best options in your market, HomeLight can help.
Header Image Source: (GlassesShop / Unsplash)
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