Home sellers today have multiple options for listing their homes and in today’s economy, many are choosing to go the ‘For Sale By Owner’ route, more commonly coined ‘FSBO’. While employing the FSBO sales method can be profitable, there are also limitations that one does not face when hiring a real estate broker.
One such limitation for FSBO sellers is the inability to use the Multiple Listing Service (MLS) directly. The MLS replaces a previous system in which each real estate company had its own “internal inventory.” With the MLS, real estate agencies post their inventories in a central database for the geographic area, which is open to the public for viewing. Sellers employed “selling agents” to list their property on the MLS for a commission on the sales price, often between four and seven percent, paid to the listing agent at closing.
More and more brokers are offering flat fee MLS listings to FSBOs and anyone else interested in the service. With a flat fee MLS listing, a broker provides the service of placing information about a property in the MLS system for a low, one-time fee.
This service has a positive effect for all parties, buyers, sellers and real estate agents. From a buyer’s point of view, the MLS provides an easier way to view a variety of properties. Buyers also know that since FSBO sellers operate without an agent, there will be less of a haircut from the sales price. From the sellers side, it is important to use the MLS when selling your real estate and the MLS flat fee listing service is the cheapest method of selling real estate. For the broker, while the MLS flat fee listing service reduces the revenue stream under the sales agent method of yore, the broker is paid immediately at the time of service. It is a win-win method.
The idea of flat-rate MLS listings is also part of a larger movement in which access to information on the Web is reshaping conventional business methods. Traditional systems that operated with a more closed pattern of information are giving way to more flexible purchasing strategies for large investments such as cars and homes.
Flat fee MLS listings are one of the cheapest and most efficient methods for sellers to get information about their real estate on the market and in the public eye. They are a low fixed cost alternative to the high commission fees of the buying and selling agent.