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Pros and Cons of Flat Fee MLS

Written by Posted On Monday, 06 July 2020 10:52
What are the advantages and disadvantages of flat fee MLS? What are the advantages and disadvantages of flat fee MLS?

Upsides and Downsides of Flat Fee MLS

Are you considering going with entry only flat fee MLS service? The attraction of selling your home without the help of a real estate agent seems obvious with reduced expenses to pay. However, one important thing you miss out on if you don't use a Realtor to sell your home is being featured on a multiple listing service.

There are, however, flat fee MLS options that help you get your home listed in the online databases. These MLS directories are how real estate agents share details of the homes for sale, and are essential to help you sell your property.

There are some benefits and downsides to using flat fee MLS services, however. We'll take a look at what is involved and the pros and cons of flat fee MLS.

How Does Flat Fee MLS Work?

If you are selling as FSBO or for sale by owner, you are going to be missing out on professional marketing and advertising for your home. Part of the problem is that you can't share your property with real estate agents looking for houses for their clients. Without access to the local MLS, selling your home is going to be even more difficult.

The flat fee or entry only listing services, partly solve the problem of marketing the home for FSBO sellers. Only real estate agents can add listings to the MLS, entry only services provide the minimum to get your home visibility in the database. This means that the agent adding your listing to the MLS won't deal with any inquires that result.

Having your home listed in your local MLS will make sure it's added to the well-known real estate websites as well. A large number of buyers check online first before going to a Realtor. When you have your home listed in MLS, your home will appear in some of the most visited websites including:

  • Zillow
  • Realtor.com
  • Trulia
  • Redfin
  • RE/MAX
  • Homes.com

Choosing an Entry Only Listings Provider

You should make sure the company you choose will list your property in your local MLS. If they don't, you are likely wasting your time and money.

Also, compare the services they offer. Will your listing be limited to a specific time, with more to pay if it doesn't sell in that time? Can you make changes to the listing if you need to? Do you need the extra services some of these companies provide?

You should also check the feedback of previous customers before proceeding.

Preparing the Listing

You will need to write the listing description and take good photos of your home. This is all-important if you hope to attract buyers willing to pay your selling price. There are not many things more crucial in real estate sales than having exceptional photography.

Great photos can make all the difference, and if you don't know what you are doing here, you will have trouble selling. It will be worth the time and money to outsource your photography to a professional when going with a flat fee MLS brokerage.

Presentation is also a critical aspect of selling a home. This is another vital service you'll be missing by not going to the full-service brokerage route. There is an art to staging a home that can make or break your chances of selling.

If you have got those important aspects right, there is the issue of dealing with the inquiries. You have to be available to reply to people quickly and then be able to show the home as well.

Flat Fee MLS - Pros and Cons

Is using an entry only listing service right for you? If you have chosen to sell a home for sale by owner, it certainly makes a lot of sense and ensures that many potential buyers will get to see your property. Let's take a look at the pros:

Saving Money

Entrance into the MLS through a flat fee service is typically going to cost you between $300 and $600. When you look at the 5 to 6 percent commission real estate agents usually charge, this looks like a tremendous bargain. These entry only companies often offer additional services like marketing, guidance, and home photography as well.

Taking Control

You get to make all the decisions about how to sell your home. You decide on the price, which showings have, and you will fully control the negotiation process.

There are, however, many reasons why using such a limited-service isn't going to be a great way of selling your home. Let's review the cons of flat fee MLS:

Difficulty in Selling

Even if you are selling your home in perfect market conditions, with lots of buyers looking for a home just like yours, the FSBO process isn't easy. You will have a lot to do to make sure everything goes smoothly during the sale if you are going it alone.

Without the help of a real estate agent there are many things you need to do, this includes;

* Judging the right price
* Getting your home ready
* Writing your listing
* Marketing
* Dealing with inquiries
* Negotiations with both the initial offer and then the home inspection
* Making sure all the documentation is correct

With so much to do, and even if you don't have a full-time job, you may struggle to keep up. The FSBO route isn't an easy choice to make, and it, therefore, isn't surprising to find that the option is gradually becoming less popular.

Selling for Less

Homes typically take longer to sell without the full marketing services of a real estate agent. This is understandable, and FSBO homes also sell for less on average, even when the savings on commission are taken into account.

While you may be taking the FSBO route to save money, you may actually find the opposite is true. Of course, it is possible to sell your home for the amount it is worth and save on commissions at the same time, though it isn't what seems to happen with most sales.

Still Paying Commission

When you have your home listed in the MLS, you will still have to be ready to pay a buyers agent if they help sell the property. This is going to cost you 2.5 to 3 percent of the selling price, and though it is a saving on the 5 to 6 percent you would normally pay, it will cut into the savings you might have been expecting to make. It is vital to understand, however, that paying the buyer's agent commission is well worth it.

Do make sure you don't short change the buyer's agent by offering a commission below what your competition is offering. You want the buyer's agent to be thrilled to sell your home!

It is possible to get a buyer who isn't using an agent, but fairly unusual. Though since you are paying them, they can help make sure that the paperwork is in order during the closing, so it isn't all bad.

Staying Legal

If you are new to doing all the work necessary when selling a home, it is easy to miss something important. This could lead to legal problems that wouldn't happen if you were using an agent to sell your home. The real estate agent will also have insurance to cover any mistakes that are made, and you won't have such protection.

Conclusion of Flat Fee MLS

It may appear that using a flat fee provider is an excellent way to avoid real estate agent commissions, but it could be a false economy. It is also a lot more work than you might imagine, and after all that, you may not sell the home. Your lack of success could leave you to go down the traditional agency path in the end anyway.

Hopefully, you now have a better handle of the pros and cons of going flat fee MLS.

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About the author: The above article on the pros and cons of flat fee MLS was written by Bill Gassett. Bill is a nationally recognized Real Estate leader who has been helping people buy and sell Metrowest Massachusetts real estate for the past thirty-three plus years. Bill has been one of the top RE/MAX Realtors in New England for the past decade.

In 2018 he was the #1 RE/MAX real estate agent in Massachusetts. His real estate advice has been featured on CNBC, RIS Media, National Association of Realtors, Today.com, Inman News, Placester, Credit Sesame, and others.

Bill covers real estate sales in the following Massachusetts communities: Ashland, Bellingham, Douglas, Framingham, Franklin, Grafton, Holliston, Hopkinton, Hopedale, Medway, Mendon, Milford, Millbury, Millville, Natick, Northborough, Northbridge, Shrewsbury, Southborough, Sutton, Wayland, Westborough, Whitinsville, Worcester, Upton and Uxbridge MA.

Reach out for his advice anytime.

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Bill Gassett

One of the top RE/MAX agents in New England over the last decade plus. Providing exceptional real estate services to buyers and sellers in the Metrowest Massachusetts area including the following communities: Ashland, Bellingham, Douglas, Framingham, Franklin, Grafton, Holliston, Hopkinton, Hopedale, Medway, Mendon, Milford, Millbury, Millville, Northborough, Northbridge, Shrewsbury, Southborough, Sutton, Wayland, Westborough, Whitinsville, Worcester, Upton and Uxbridge MA.

See my real estate website at Maximum Real Estate Exposure - one of the most visited real estate sites in Massachusetts.

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