For Sale By Owner Homes / Mortgage Blog

Flat Fee MLS

Flat Fee MLS is a service that is exclusively provided by licensed Realtors. Essentially a licensed Real Estate agent agrees to “list” your For Sale by Owner (FSBO) property in the MLS for a “Flat Fee” instead of the typical commission fee for which payment of is contingent on the successful sale of your property. With a “Flat Fee MLS” listing you pay the fee (usually between $399 and $699) upfront. Flat Fee MLS is specific to FSBO properties and exposes your property to a Realtor’s most valuable sales and marketing tool. Imagine exposing your FSBO property to the 2 million strong, professional Realtor sales force and the 7 million monthly searches on Realtor.com. Additonally, a Flat Rate MLS listing usually includes insertion into the Internet Data Exchange (IDX) program. Therefore, your property is also advertised on hundreds of websites of local brokers, agents and other IDX sites.

Within a Flat Fee MLS listing environment the homeowner sets the commission fee that they are willing to pay to a “Buyers Agent” – this fee is typically (2 to 3%). It is important to note that “Buyers Agents” are provided what you are willing to pay and may be influenced by the fee. Buyer’s Agents typically earn 2.5 or 3% so keep that in mind when setting that fee – you don’t want to handicap your listing by offering too low of a commission fee. Flat Fee MLS listing are for a period of 6 months. There are different “geographical” levels offered through Flat Rate MLS, you can purchase a “County” level or “National” level. The primary difference between the two is geographical exposure and price. There are approximately 500 geographically categorized MLS “areas”. A national level Flat Fee MLS exposes your property to all MLS “areas” and related property searches, and as previously mentioned, costs between $399 and $699. A “County” level MLS is specific to the local County MLS that the property is located and may cost as little as $199 – your listing will only show up on the County level MLS. A common misconception is that the MLS is owned and operated by the National Association of Realtors (NAR) – it is actually owned and operated by a small group of Realtors in each geographical area that had the foresight to recognize the value of a central repository of properties listed for sale.

In a Flat Fee MLS environment the home/property owner essentially becomes the “Listing Agent” – most Flat Fee MLS providers have a phone system that routes prospective buyer enquiries (based on MLS number) directly to the homeowner. Realtors have direct access to the homeowners contact information and will contact and set up appointments directly with the property owner. The homeowner is responsible for setting up showings, answering the potential Buyer Agents questions and all advertising (signage, classified, Open Houses, etc). Another advantage of a Flat Fee MLS listing is that showings that are initiated by/through a Buyer Agent are handled by a licensed real estate agent.

As with all property sales it is important that it is competitively priced. This is equally or more important with a Flat Fee MLS listing because you only have 6 months exposure. If you overprice your home it will draw limited or no attention. That said, I believe that a Certified Appraisal (usually $39 - $50) should be part of your Flat Fee MLS marketing plan.

The bottom line is this; the success rate of a “true” FSBO (no Realtor, no fee) is in the 14% range. Statistics show that 75% to 80% of all existing property sales are listed on and through the MLS. There are no statistics when it comes to Flat Fee MLS because the sales are lumped in with the NAR “Existing Home Sale” statistics. It is speculated that FSBO’s that use Flat Fee MLS are 3 times more likely to sell their property. When a “Buyer’s Agent” searches the MLS (this is what they do virtually 100% of the time) to find prospective homes based on their clients requirements your property is listed and viewable. It simply becomes another property to show their client that they are going to be paid between (2% and 3%) if they buy. They don’t care if it is an FSBO or Realtor listed home – they show it, handle negotiations and close the sale. You save between 2.5% and 3% - based on the average resale of $280,000 you save $8400.00 – that is a significant amount of money when you consider the fact that it is “after tax” $$$$ and you have increased the odds of selling the property considerably. Another thing to consider is that you still reserve the right to sell your home yourself, even if/when the buyer comes to you via Realtor.com, and realize a full commission savings – but the buyer cannot come to you through a Realtor.