|This posting was originally posted on my ActiveRain blog on August 8th.|
As I mentioned in an earlier post this evening, I've made it back into the real estate saddle here in Houston. My idea, by no means completely original, is to offer flat fee listings in the Houston area. In doing some searches on AR and the web, there isn't a ton of information on this concept so I thought I'd write out my vision for those of you that are interested in the idea.
What is a flat fee listing?
A flat fee listing is targeted to the FSBO (For Sale by Owner) crowd who is interested in selling their home on their own, but would like to use the power of the local Multiple Listing Service (MLS) to increase the likliehood that their home sells in a timely manner. Statistically, properties on the MLS are more likely to sell faster and for a higher sales price than those properties not listed on the MLS. The savings to the customer/client is on commissions. They pay the flat fee for the listing (in my case I charge $249 for sale listings and $199 for lease listings), which gives them 6-months on the MLS (I charge $20/month after the initial 6-month period). When the home sells, I collect nothing else and they owe a commission on the buyers side based on what they negotiated (or what was in the MLS).
What are the problems with flat fee listings?
Although I've never engaged a broker to list one of my properties for a flat fee, here are the pitfalls that I see:
- Some firms use flat fee listings to convert the client to a full service client (I don't do full service representations, so no conflict of interest there).
- Some firms only use flat fee listings to try to pick up interested buyers to represent them in their home search (I don't rep buyers, with the occasional friend or family member being the exception).
- Some firms have significant catches in their structure. They limit the number of photos you can upload or the number of changes you can make. I think that is all rubbish. Unless a client is being unreasonable (making changes several times a week or uploading a ridiculous number of pictures), there is no need to put restrictions on your service.
- Some firms have lots of hidden fees or cancellation charges. The fact is, you probably don't want to do business with organizations that have these types of fees. I personally spell out all my fees as often as possible, they're pretty simple: $249 for a 6-month sale listing and $199 for a 6-month lease listing. Additional complete months (I don't charge for a partial month) are $20 and $15 respectively. I do custom for sale signs for $100, prefab signs for $40, and will lease a lockbox for $75 plus a deposit. Pretty simple, right?
- A broker isn't there to negotiate on my behalf or fill out contracts. I always tell everyone I speak with that what a full service broker offers you is 1) Expertise that can only come from being engaged in the market day in and day out and 2) Time. A broker saves you from filling out forms, fielding calls from interested parties, showing the property, negotiating contracts, and more. However, if somebody is willing to forgo the significant benefits of a full-service broker, I'm here to give them the best chance at selling their property quickly by giving them greater exposure.
Why flat fee instead of full service?
As I mentioned above, I believe a full service broker is the way to go when selling your property. You really can't put a value on all that a full time realtor representing you does. That said, there are some people out there that either can't afford to pay the commissions, or they simply don't want to do so and want to tackle the project on their own. That's where flat fee services like mine come into play.
If you're interested in seeing additional iformation, feel free to visit my site or drop me a line. www.myhoustonmls.com