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By Richard
Massey
Realtors are all a buzz about this new form of listing houses on the MLS
(multiple listing service). Some feel it creates more work for the buyers
agent, while others see this as a way to tap into the For Sale By Owner
market.
It use to be when you made the decision to sell your home, you essentially had
two methods available to you. You could list your home with a traditional
real estate company and pay 6-7% commission or you could try selling on your
own "for sale buy owner".
Research shows that nearly 50% of all home sellers start out trying to sell
their property on their own. Although some home owners are successful with
FSBO, according to the National Association of Realtors (NAR) home seller
survey, only sixteen percent of sellers actually sell their home without
exposure on the MLS. And many of them end up giving away their commission
savings to the buyer to close the deal.
Realtors tend avoid for sale by owner properties because they are working with
buyers and have no written agreement to be compensated. If the seller has not
agreed in writing to pay a commission to the agent, the buyer could cut the
agent right out of the deal and negotiate directly with the seller. It
happens....
With flat fee MLS service, the seller has agreed in writing to pay a
commission, usually 3%, to the buyers agent. This motivates Realtors to bring
the seller a buyer.
How it works:
Real estate commissions by law are negotiable. In a flat fee listing, the
listing agent agrees to a flat fee instead of a percentage of the sale price.
This can be anywhere from $300-$600 for the service of adding your house to
the MLS. Then you choose how much to pay the buyers agent in commission for
bringing you a buyer (typically 3%). So in the sale of a $200,000 house you
would pay $6,000 plus the flat listing fee, saving a close to $5,700 in
commissions. The plus side is in the listing agents contract, the right to
continue advertising you house FSBO. So in the event you find a buyer without
an agent you save on all commissions and only pay the flat listing fee. What
do you get with flat fee MLS listing: Advertise your home on Realtor.
com® Market to buyers working with a Realtor® through the MLS Market to
Buyers working without a Realtor® Retain your right to sell your property by
owner Avoid paying any real estate listing commission by paying a flat rate
or fixed fee upfront Only pay a commission if a buyer`s agent sells your home
Why would a listing agent want to do this?
For real estate agents this can be an opportunity to increase revenue by
listing more homes. There are many people who refuse to use realtors because
of the 6-7% commissions, but are more than willing to pay 3%. With the
increase of internet marketing, realtors can reach more people because all
they are offering is to list the house on the MLS. Services are minimal and
the listing agent really won`t be trying to find a buyer for you, but rely on
the buyers agents. This allows them to list properties in a larger area and
in some cases in other states.
With the increase of house prices, is the 6% sales commission going to survive
or will flat fee listings be the wave of the future. Only time will tell...
Richard Massey is a note broker with United Financial Resources and a real
estate investor. You can get more information at http://www.
unitedfinancialresources.com (http://www.unitedfinancialresources.com) or to
read more articles go to http://unitedfinancialresources.com/news.html (http:/
/unitedfinancialresources.com/news.html)
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