How does MLS work? what you need to know

How does the MLS flat rate work?

Introduction

When you are ready to sell real estate you have options, I know many of you think you have to list with a broker and pay outrageous commissions. That is not true. You can sell by owner or you can sell by owner and also take advantage of multiple listing services.

Let me compare the two services for you, then you decide.

What do brokers do for 6%?

They do a number of services. The most common of these is:

1. List your property on the local Multiple Listing Service
2. Review and/or write your purchase agreement.
3. Act as a transaction coordinator that follows your contract through to closing.
4. They usually show themselves.
5. They will give you a sign with their number
6. They usually provide a safe deposit box
7. Most will prepare brochures with your contact information.

On a $200,000 property, your commission would be $12,000 or more.

What do flat fee brokers do?

1. List your property with the local Multiple Listing Service for a flat fee, usually around $200.00. Some services charge considerably more than that. Do some research to find the best service and the best price.
2. Review and/or write your purchase agreement. This is a separate fee, usually around $279.00.
3. Act as a transaction coordinator that follows your contract through to closing. A separate fee, usually around $379.00
4. You build the presentation around what is convenient for you and the buyer.
5. You have your own poster with your phone number as a contact.
6. You have a key box and you control who has access to it.
7. You create your own flyers with your contact number or you can get free flyers from a local title company or lender.

The best thing about the flat rate service is that you can choose the services you want and only pay for the ones you need.

What will you do with all the money you save?

If you purchased all services separately, your cost would be less than $1,000. If it’s sold by an MLS broker and you pay a co-op fee, you’d still save between $5,000 and $6,000 thousand dollars. Since you can still sell by owner, if you could find your own buyer, you wouldn’t pay any coop fees. This would not be an option with the 6% listing. You could save more than $11,000. Nothing bad.

Benefits of using MLS Flat Rate:

1. Save time: properties usually sell faster
2. You save money: properties usually sell for the best price
3. You stay in control – brokers have a lot of control with 6% quotes
4. You can sell by owner and do not owe a commission. The same is not true of full-service listings.
5. You can cancel at any time – may or may not be true with full service listings
6. You get much more exposure to qualified buyers
7. You get thousands of brokers with qualified buyers to help you sell your home 8. You’ll most likely be listed on Realtor.com and the local MLS

What to look for in your flat fee broker

Not all flat fee brokerages are the same and there are many scams. Some call their service MLS when in fact they are not even a member of MLS. They cannot be licensed real estate agents. They take your money and put it on their website, but not on the realtor’s MLS.

So do some research. Discover:

1. Do they have experience with selling by owners?
2. Are they members of your local MLS?
3. Are they licensed brokers in your state?
4. Do you maintain an office locally? And do you have a local phone and address?
5. Are they easily accessible by phone, fax, email, and postal mail?
6. Avoid big franchises and multi-level marketing scams

Things you must do as a FSBO:

1. Parting with the property.
2. Clean the house and garage.
3. Learn to organize property
4. Research other properties in your neighborhood so you can price them correctly.
5. Put away all valuables while you’re at the market
6. Get flyers for your buyers

Summary

So why wouldn’t you do flat rate MLS instead of a full service 6% commission? There are many reasons why people choose to go with a higher commission and I respect their choice.

I think it would be wise to first research the flat rate MLS services in your area and then compare the two and make an informed decision.

Copyright © Wee Dilts 2010