Why do seasoned flippers need to pay a sellers agent today?
I invest in Houston, Texas. After a few flips and being forced each time to pay the, lets be honest, VERY expensive brokerage fees to gain assess to the local MLS service and for preparation of a few standard (and freely available) contract forms...in addition to the warm and fuzzy feeling you get from knowing the transaction is being executed uniformly and professionally. But come on, 6%? I understand there usually is no way around paying a buyer's agent...which can be the subject of a future post. My question is, in this modern era where MLS offers so much direct information to consumers, services for flat fee MLS listings for as low as $500, why would a seasoned flipper who knows the process and needed forms pay 3, 2, or even 1% of their investment profit to a listing agent? My last project sold for almost $600,000. At 1% the listing agent would make $6,000 to put on an open house, fill out a few forms, and post the house on MLS. No offense to agents out there, but this seriously feels like a unnecessarily expensive service for most standard real estate deals. It feels like we're all trapped in an antiquated mode of "this is how its always been done so this is how we have to do it." Has technology and services moved on enough to say that the legacy fees of realtors should be amended. 6% of a transaction for the actual services provided to the seller seems to me very unfair.
On our current two flips I was going to use a flat rate $500 shop to get the listings on MLS. I would handle all calls, contracts and showings. Then a friend and fellow investor offered to represent us for the flat rate but the situation is basically the same. This will result in a net savings of $5,500-17,500...I mean, if we aren't concerned with saving that type of money, how can we call ourselves investors? Please agents don't take this as an attack. I'm concerned with value for dollars spent. To be honest, when I read posts about the importance of hiring an agent I'm reminded of Mugatu in Zoolander, "I feel like I'm taking crazy pills!" Am I the only one that sees it this way?
