When things in life seem too good to be true, they usually are precisely that. In real estate, the perfect example is flat fee MLS. Selling your home is a costly experience, so any way of saving money should be jumped at, right? A flat fee MLS entry service is a potential way to avoid paying all of the typical real estate agent's commission, but is it really worth it?
If you are going to be selling your house as a for sale by owner, you're smart to want to have it in MLS. Doing so will put thousands of eyeballs on your home not only from real estate agents but potential buyers in the market as well.
The beauty of the multiple listing service is that is will distribute the listing to all the major real estate portals that buyers visit, such as Realtor.com, Zillow, and Trulia, among many others.
There are, however, significant downsides to just putting your home in MLS for a flat fee.
Let's take a look at using a flat fee MLS service to get your home entered into the multiple listing service, and how it might not be as great as it first appears.
Here is a summary of the things you'll see discussed on why selling your home with a flat fee MLS agency might not be that advantageous:
When selling a home, you get what you pay for! One of the most vital steps in selling a home is picking the best real estate agent. That won't be happening with flat fee MLS.
When you choose to use the services of an entry only flat fee MLS listings agency, you'll miss out on the help you would typically get from a traditional real estate agent. You will have to decide on the price it will sell for, handle all the marketing, deal with showings, as well as handle the paperwork by yourself.
It is very easy to underestimate the work your real estate agent puts in on your behalf. Without them, you take on the responsibility of selling your home and the workload involved, which can be considerable. It is inevitably going to consume more of your time than you expect.
You will need to deal with inquiries promptly, something that could be difficult if you have a job. You also have to arrange appointments for showings and be available when it is convenient for buyers.
Tasks like staging your home, creating flyers, getting professional photos taken, and writing a description of your home for the listing, are easy to overlook. These things could make a massive difference to the speed your home sells and the price you receive, however.
Have you taken into consideration the amount of extra work you are going to have to deal with? You might pay the money to get your home in the MLS entry only listings, only to find that you need a Realtor to deal with your sale after all.
Without the help of an agent, you could find that you need to hire a real estate attorney to handle the paperwork for the sale. BUT, the pros of an entry only MLS listing is that you could get lucky and save some money.
Typically, entry only MLS sales agencies charge anywhere from four hundred to one thousand dollars depending on the level of services.
You will get your home in the MLS without paying commission to a listing agent. Even though you have made your home visible to homebuyers and their real estate agents, you may not avoid paying commissions entirely. If the buyer is using a real estate agent, you will have to typically pay 2.5-3 percent to them.
There is the issue of setting the price for your home. Realtors use a process called comparative market analysis to understand the best price for a home. You can try to gauge the best sales price yourself, but if you get it wrong, you could be losing out by thousands.
Set the price too high and your home won't sell. The longer a home remains unsold, the more difficult it becomes. Potential buyers see that it has been on the market for a long time and assume there must be something wrong with the home. Naturally, this puts people off inquiring further.
There are negotiations to consider, as well. If you aren't practiced in negotiations or good with people skills, you could find yourself in a pickle when selling your home. This could lead to you missing closing the sale when an experienced real estate agent wouldn't have. Even if you don't put the buyer off, you might judge the situation wrong and lose a few thousand dollars on the sale.
If you are thinking about possibly going with a flat fee MLS contract and not using a full-service Realtor, you might be wondering how agents look at this situation. I can tell you as someone who has been selling real estate for thirty-three years, it is horrible!
When there is not a listing agent involved in the transaction, you do double the work as a buyer's agent. You are also put into the position of having to communicate with someone who knows little about the home sale process, i.e, the owner.
Always having to explain how things should be proceeding in the transaction does not make for a smooth experience. Most real estate agents are not going to be thrilled with this kind of transaction.
When it comes down to it, the risks of using a flat fee agency and the work involved may be more than you might have imagined—avoiding the traditional charges on commission while going FSBO and still selling your home is obviously attractive. But will your home sell as quickly as you would like? And if you do find a buyer soon after it appears in the listing, have you sold for less than you could have achieved?
The initial savings you might have made from an entry only listing, won't appear as terrific when you get the bill for the marketing, attorney's fees, delays in selling, and all the little extra expenses you have had to spend money on.
Unless you are confident you can cope with the work required, have the time to spare, and know the value of your home, using a flat fee MLS could end up being a costly mistake.
Hopefully, you now understand why selling with flat fee MLS is not as rosy as one might think.
Get more helpful real estate advice in these previously published articles at Realty Biz News.