This article is for those who do not know much of the details of the Flat Fee Listing method. It is widely understood by savvy Sellers and Investors, but truly kept as a secret. Below are some of the Important Details of any Flat Fee MLS product out on the Internet.
1. There is Usually a Flat Fee Paid Up Front
This is to compensate for the fact that there will be no-to-low listing commission obtained by the Listing Brokerage. Usually this fee can range from $100 to $1,000+. This just depends on the treatment from the Listing Agency that is required by MLS. Do ask plenty of questions about what comes with that fee, this way you can safely pay the fee up front. Most often, the payment is made before the listing is activated.
2. Remember What MLS is About
It is not for the benefit of the Sellers, but for the benefit of the Buyer’s Agents. This reasoning can be better explained Here. Overall, remember that the Listing Agent is required to have the correct data for the Buyer’s Agents to procure the sale of the property. This sale comes with a compensation for the Buyer’s Agent. The usual Buyer’s Agents commission can be between 2.5% to 3%. Nothing less than that commission amount is recommended for the effectiveness of the sale of the MLS Listing.
3. Local MLS Rules on Treatment
It is in the interest of the Local MLS to NOT have Flat Fee Real Estate Brokerages. This is because the traditional 6% structure is the ideal scenario. It is against Federal Anti-Trust Law for the Local MLS to require a minimum amount of commission to be paid. However, the Local MLS can require active participation from the Listing Agent on your Flat Fee MLS Listing. This means that the Listing Agent's office must be open during the usual business hours for any questions from the Buyer's Agent and/or Seller. This is the key to choosing the right Flat Fee Listing Brokerage. If one is chosen and does not comply with the Local MLS regulations, chances are that the listing may be fined and flagged to be shut down. This can serve as a problem for a Flat Fee of hundreds of dollars that was paid up front.
4. Most Flat Fee Websites Third-Party Their Listings
Most Flat Fee MLS companies third party their listings to inexperienced agents. This way, the amount that they pay that agent is less and the listing is no longer handled by the company that was originally hired. This could deeply affect the ability of the property to sell. At Flat Fee By YOU, we handle our own Flat Fee Listings under the supervision of a Local Texas Real Estate Broker.
Conclusion
In some MLS regulations, passive agency is not allowed from the Listing Agent.
Most Flat Fee MLS companies third party their listings to inexperienced agents.
Can you see how this may cost a havoc to your Flat Fee MLS Listing?
Will Puente, PhD, MBA, JD Candidate
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