I'm finishing up a rehab and need to get it listed. I can either pay a flat fee of $500 for MLS listing + 3% to the buyers agent, or I can pay a listing agent the full 6%.
From what I can tell, there isn't that much a difference. I wouldn't get open houses which I'd like but how much is that worth? or any hand-holding/help negotiating which I don't think I need. But being out of state, it would be nice to have someone check up on the house. I was thinking I might be able to pay someone to check up on the house that would be a lot cheaper.
What would you do? Thoughts?
If you're out of state, I would think the only smart thing to do is to use a local agent. If you're not using an agent, what are you going to do about the buyers who do not have a buyer's agent agreement in place? They aren't using an agent, so how are you going to show them the property? That's a much more common scenario now, with the proliferation of online real estate sites, than it was back in the day. :)
You are talking 2 totally different types of Agents here. the flat fee $500 or 1% listing agent will list on MLS stick a sign in the yard and thats it. I pick up expired listings from these types after 120-180 days on market with no activity. You get what you pay for and a good Agent is like any other trade. would you pay a flat rate or very cheap Dr or mechanic. Speaking for myself I work my but off just as hard at listing as I do buying for clients. The market rate Realtor should expose your property to all potential buyers not just MLS, call buyers they know, show your property, check on your property, make the transaction actually close, and perhaps net you even more in multiple offer situations from working it hard ect... ect...
2 types of people in this world those that want to work hard and those that don't. Just make sure you have someone who likes hard work.
Definitely use a local realtor. They know the local market, and can give you the best advice.
If you go the flat-fee option, you're basically paying the broker to advertise on your lawn and pull in leads for himself, and the only advantage to you is the listing on the MLS, unless it's a poor one. More about this later.
If you pay the full commission, the listing agent has a vested interest in getting your property sold, and so he/she will work on that. Your MLS listing might be a little better, depending on the quality of the agent.
I won't go into all the specifics of what a Realtor can offer, but what you want to consider is the quality of the rehabbing considering your home's price point, which you will be aware of, and also your competition. Are you going to put it on the MLS at what really is "priced to sell" and by that I mean that it WILL sell almost as soon as it hits the MLS? If so, the the flat-fee option sounds most attractive.
If you're pricing it around market value, and it might sit for more than 2 weeks without an offer, then I would pay the full commission to have the listing agent working on it for you.
Now, I hinted about this earlier, but not every listing on the MLS is the same. Shocking, but true. I cannot believe the Realtors who shove only a few photos up and have the shortest of descriptions in the public comments.
On our MLS (MFRMLS) you can have up to 25 photos. If your agent or his broker, like mine, pays for "Showcase" listings, you can have up to 36 on realtor.com.
Take a look on realtor.com, and search for local agents to the property. Check out their listings and see if they have showcase (you'll know the difference) and ensure they list all their properties with 36 photos, virtual tour, video and longer description than what is on the actual MLS. What is on the MLS will be the same description as Zillow or Trulia (syndicated 3rd party sites). I've mentioned these things here because they add weight to the properties search ranking. (Source: Frank Chimento, Move.com, July 2014)
The quality of a Realtor's listing will tell you a lot about him/her. And if you're paying a flat-fee anyway, you just might get a quality MLS listing too!
Free eBook from BiggerPockets!
Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks and techniques delivered straight to your inbox twice weekly!
- Actionable advice for getting started,
- Discover the 10 Most Lucrative Real Estate Niches,
- Learn how to get started with or without money,
- Explore Real-Life Strategies for Building Wealth,
- And a LOT more.
Sign up below to download the eBook for FREE today!
We hate spam just as much as you
Create Lasting Wealth Through Real Estate
Join the millions of people achieving financial freedom through the power of real estate investing