10 Things To Know About Flat Fee MLS Listing
It is not just Flat Fee MLS Listing that can be confusing, but also simply selling a home overall. While an agent sells homes regularly, typically sellers only deal with that situation in small doses. We hope this list can help clarify the Flat Fee MLS method of selling your property.
1. It can Save you Thousands in Commissions
Flat Fee Listings can definitely save you thousands because of the structure of the deal. The traditional listing agreement is a 6% cost to the seller. Typically, the seller only pays 3% at closings through a Flat Fee company.
2. There is Still a Percentage to Pay
Multiple Listing Service (MLS) was designed for sellers to pay commissions to agents. It was never designed for sellers to save on commissions. So, when you list your property on MLS, the purpose is for a commission amount to be advertised to any agent willing to bring their buyer (buyer’s agent). Therefore, that is usually a 3% cost.
3. Buyer’s Agent Commission is Negotiable
The Buyer’s Agent commission amount does not always have to be 3%. It is negotiable between the seller and the Listing Brokerage. A Broker would not list anything ridiculously low, since it may interfere with his/her reputation in the industry. The higher the listing price of the home, the lower the buyer’s agent commission can be negotiated and tolerable by the industry.
4. Each MLS Has Their Own Rules and Enforcement
Your property belongs to a certain MLS. That MLS dictates how to deal with a listing. Some MLS's have rules of engagements between all of the parties. The major metro MLS's actually audit listings for quality assurance. If these rules are not followed, the listing can be terminated and fined by that particular MLS. To know your specific rules for your local MLS, call and talk to the Listing Broker.
5. Flat Fee Companies are Rarely the Actual Listing Brokerage
Most of those type of companies are marketing websites that do not list the property themselves. They simply send the listing order with some of the partial payment provided by the seller. Sometimes the Listing Agents of Flat Fee MLS listings never communicate with their sellers, thereby possibly violating their local MLS Rules.
6. Rural Area Flat Fee Listings
The rural area flat fee listings must sometimes be listed in a Metro MLS areas like DFW, Houston, San Antonio, Austin, Atlanta, Los Angeles, San Francisco, Miami, Tampa, Orlando, etc. Those listings still syndicate globally to major real estate websites from the likes of Zillow, Trulia, and Realtor.com. The reason these rural area listings must be listed on these major metro MLS's is due to the lack of traffic from those lowly populated areas. The other alternative would simply be to pay the 6% for those local listing agents.
7. MLS Learns to Audit Certain Flat Fee Listing Agents
These MLS's tend to know who is a constantly non-compliant listing agent. A seller should be careful with those type of Listing Agents, because it could affect the listing itself for fines and termination.
8. Call your Flat Fee Company
A good rule of thumb to see whether the company is an MLS compliant Listing Brokerage is to call them and ask them directly. “Do you third party out my listing to another agent?”, that is a simple action in order to check. Plus, answering calls may be a good check in itself.
9. Ask about Extra Costs or Hidden Costs
Sometimes there are costs that MLS may require after closing. You should call and find out who pays for them.
10. What about Escrow Fees?
Some Flat Fee companies collect their revenue through Escrow Fees. Ask your chosen Flat Fee company if they have a third-party agreement with an escrow office. Can you use your own title company? Sometimes the escrow fees are even more expensive than the thousands saved in commission.
Here, at our company we handle all of our listings in house. We also look over your property in order to find out any extra costs acquired by the local MLS rules. Feel free to call us so we can be frank and let you know ahead of time.
We hope this list helps others enlighten themselves on what a reliable Flat Fee MLS company is.
Would you trust a company that brings these points for you to know ahead of your order?
Dr. Will Puente