flat fee listing services

31 Replies

Flat fee broker comes in a couple of different types. Most charge a low fee to get your home in the MLS. You have to all the work of showing, negotiating, and completing the transaction. You also have to find and complete your own contracts. If you have completed a few transactions before, this may be an option for you. If you haven't had the experience, I would recommend going with a broker for the first one or two, as a transaction can get complicated sometimes depending on the buyer.

Another type of flat fee is a flat fee for selling if you agree to buy with the agent.

Good luck!

I have on my last 3 home sales. each time i think i used a different company. (years between sales). as i recall, last time, allot of the online flat fee websites are actually owned by the same company. hopefully that has changed by now and more competition has came in. 

I love it, cant imagine selling a house and paying more then $600 bucks to get it on the MLS. And you have to have your house on the MLS realistically, simple sign in the yard doesnt work. You almost never show your own property, most buyers will come with an agent and the agent will call you for the lock box code for the key/permission to show. Its so much better to be able to negotiate yourself. the contracts are pretty typical and most flat fee services will provide you with all the docs you need to fill out. pretty simple. The main thing your are buying is getting the house on the MLS, same thing you get when you hire an agent to sell the house its just that your paying thousands more to do it. in reality its simply because the house is on the MLS is why buyers come to the house, listing agents just collect a fee. The title company does all the work of actually closing on the property, etc.. that leads up to the sale.

Listing agents rarely show your home - it's usually buyer's agents coming thru.  If the listing broker offers no assistance on the offer/contract, then yeah, you really need to know your state contract and what the gotcha's are in a real property negotiation.

You'll still pay the buy side commission, assume that's 3%, but that's only if you sell.

If you don't sell in the listing period, assume you are out the $600 because it was a simply a service vs. a traditional listing.

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 @Bryan L.  

I havent ever met one that wouldnt show it. its really not up to the realtor, in todays market typically its the buyer that finds the property online then asks a realtor to show it to them. what is a realtor going to say, no? i dont think so, unless they dont want to get paid. All flat fee listing sites, the realtor still gets paid. The seller lists the amount they are willing to pay, be it 500 bucks, 1%, 2%, 3%, sometimes its negotiated if the realtor feels the amount is too low.  If a realtor said no to their buyer, its not like the buyer is going to "not like" the house because the realtor thinks he/she deserves more money, the buyer would just find a different realtor or contact the seller directly.

@BrianL.

Why do you "shy away" from less than 6% listings? Or do you mean to say listings where less than the standard 3% is offered to the agent bringing the buyer? Many REO listings do not offer a 3% to buyer's agent, do you shy from them? And if so, what do you coach your REI students on making offers on REO listings...a populat source for investments?

Originally posted by @Bryan L. :

@Account Closed  You've met one now.  I also shy away from showing listings that are at less than 6%.

What if there is a really nice listing that came on the market and you know it will be perfect for your buyers, but it is flat fee listing and buyers agent only gets 2.5%? You will not show that listing to your buyers?

@Bryan L.    Bryan I can't believe you admitted you won't show listings of a flat fee broker or if they are less than 3% BAC... that's really really short sided Un professional and appalling all in the same sentence I would never want you as my agent.... your not  doing the best for your buyer which is your JOB.. its not your JOB to make the most you can per listing its to get your client into the home of their dreams//// I know other brokers with your attitude and it really sucks frankly. 

Which leads me to a funny story... ( Bryans appalling behavior in his sales techniques aside) My wife once showed a listing and sold it to one of our clients and it only had a 1% BAC... She did not realize it until she put in the broker demand.. Now that's a lady who had her cleints best interest at heart... but I just had to meet this guy who not only did low list side but 1% BAC  we hit it off and went on to do a ton of business together that was far more than the one deal we closed. Turned out it was a very tight client they would only pay so much but it was a great property...

For all you BPers out there do not be offended by Bryan's attitude.. and yes would you want this guy as your coach.. Ugh.

@Sharad M.  @Bryan L.  

  Not only that he would get reprimanded big time by the his peer review at the board of realtors and or could lose his Real estate license if a buyer could prove that he was only showing listings that paid him 3% bac  as opposed to 2% or 2.5%... This type of behavior and attitude has no place in our industry..

@Sharad M.  

This is a good point of discussion and I am not certain it works the same in each and every state but I would think this is true in most states if not all.

When an agent takes a listing they own the listing per se... then they decide how much BAC to give the selling broker.. Now an owner can dictate the BAC as part of the listing negotiation just like you do.. And it mirrors what I do with my new construction here in Oregon.

However there is nothing precluding an agent from presenting a contract to purchase and asking for more commission... In reality this would just be accepted or denied and depending on how tough the market is a buyer would make the choice..

Back in the day of 18% interest that I personally worked through and with Land listing I often times charged 20 to 25% commissions.. And the sellers were happy to pay them as sales were no existent at the time and I was good at what I did.. But that was me double ending the deals.

Fast forward out of the 80's I have only had one instance were a broker bringing me an offer on one of my listing asked for more than the published BAC.. its was a Super high end home in Oregon  5 mil sales price.. I was not only the broker but one of the owners. I listed it and offered a 3% BAC... We were making Will Bernard type money on the deal well over 7 figures  actually almost 1.6 on the deal so what's 150k right.. Well this agent wrote a full price offer at 5 mil.. then said because she did that and how hard she worked we should pay her another 25k for her efforts.. Well I drew the line on that one.. She sold the property first day it was on the market.. To a client that had watched us finish this home over the 12 months it took to complete and made an offer day one.. WE had 2 other offers from Basketball players here in Oregon and this guy really wanted it .  So there you go I am the listing broker on a 5 million resi deal that shows 1 DOM and sold full price.. and we gladly paid the 150k but not the bonus she wanted.

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@Jay Hinrichs  

20-25% commission?? Wow, that must have been something, but you are right when no one was buying and if you can sell a house, you can command whatever commission you want.

The guy is making $150k commission and he wanting to negotiate a higher commission?? I guess it doesn't hurt to ask..lol

I have never had a buyers agent try to negotiate a commission, but if they brought me a full price offer with great terms, then I would be open to negotiating the commission.

Interesting discussion.

I am curious if other RE agents on BP have been in situations where they had to negotiate their commission and how that turned out?

@Sharad M.  

  it gets better on that deal.. this agent  one of the top lady agents in our market consitant high 6 to 7 figure commission income... Also sold us the house. we paid just under 2 million and she double ended it when she sold it to us... so I think she made 4% on the buy sell so another 80 to 100k ... so this one house she made just at 250k in cash in less than 16 months with no money out of pocket or any risk.. And you have people on BP ask whether they should be in Real estate and sell RE... Just like the few wholesalers that make it big.. Aaron M.. form LA seems to be one.. But top end agents do as well if not better than 95% of all wholesalers and flippers without any Risk of owning

@Bryan L.  I always looked at those FSBOs as an opportunity, especially when other have the same mindset as you.

I recently sold a house in Marin County that I listed AND Sold with a flat fee MLS listing.

I also paid 3.5% commission on a $2,575,000 sale.

Would you not show it? I didn't think so.

Again minus 726 votes...

@Marian Smith  @Sharad M.  @Jay Hinrichs  @Ron Drake  

 Wow, y'all came down on me pretty hard.  That's OK, cause I really don't care what you think of me.  But I will explain a bit here anyway.  Please keep reading.  Please read it all.

I once took a listing on a great house and the sellers wouldn't list at 6% (they had other agents offering to do it at 5%).  So, being new in the biz at the time, I went ahead and took it at 5%.  The house was a great property in great condition, and it was priced right.  We got a bunch of showings and no offers.  After that, I've always wondered if the other agents steered their buyers toward other listings that were at 6%.  Don't be "appalled" - it happens.  And how much did I make for all of my efforts and expense on trying to sell this house?  Yep, zero dollars.

Now days, I refuse to take a listing at anything less than 6%. I work hard to sell my listings - doing more than just placing them on the MLS, and my firm spends a lot of money to have the best internet marketing in the state. And it shows - we are the number 1 firm in the whole state. So, if you want to list with the best, come on and list with us at 6%. If you want inferior service, and you want to pay less, I can give you the phone numbers of the girls at the firm down the street who will do a 5% listing (or flat-fee, limited service).

By the way, I put my money where my mouth is.  For example, I put one of my rental properties on the market to sell this last summer, and I listed it myself and listed it at 7% (yes, you read that right, SEVEN PERCENT, with FOUR PERCENT going to the buyer's agent a.k.a. seller's agent).

On the other thing - you talk about it being "my job" to show all of the listings to "my client" and to represent them the best that I can.  First, I don't have a "job" - I run a business.  Second, most buyers will not sign a Buyer's Agency Agreement if you held a gun to their head.  So, they are not my "client" (I bet most of you refuse to sign these documents too).  And third, it takes more time, energy, effort, and paperwork on the part of the selling agent to show and sell one of those limited-service-flat-fee listings.  I will not do those types of listings, and I will not show those types of listings.  Period.  We have some pretty ladies in our area who do a lot of 5% listings and they also do flat-fee-limited-service.  If someone wants to choose their Realtor based on their cuteness (this happens a lot by the way), or based on paying less money, I can give them the number to those ladies.

Here's the thing. Being a good Realtor is much harder than the average person realizes. The actual mechanics and nuts and bolts of it are not really that hard, but the hard part is getting clients. And seriously, a lot of people choose their Realtor based on their prettiness, or the fact that they are "the biggest name in town". By the way, I recently did a MLS search on the lady who is the "biggest name in town" in my town, and she had about 40% of her listings that had been on the market for 6 months or longer - unsold. Anyway, this biz is hard enough as it is, and I work hard to provide my clients with excellent service. And I'm not going to mess with people who are mainly focused on saving money on commissions (or the agents who agree to give in to those kind of people). Do you really want an agent to work for you if their negotiation skills are so weak that you can negotiate them down on commission anyway?

Like I said, I work hard. On a recent transaction of mine, I saved one of my clients $2000 with my negotiations on their behalf. And on another, I saved someone $3000 by finding a mistake that the attorneys had made on the HUD-1 settlement statement (do most other Realtors even review these documents? - definitely not with a limited-service listing). And these examples are on transactions in the $100,000 or less range. So, anyone reading this, I'll give you the phone number to the pretty girls who do 5% and flat-fee listings, but I bet you that they won't save you 2-3% or more in negotiations and settlement costs. It's your choice. Also, here's another example. I recently bird-dogged a deal for a guy, and we did my bird-dog fee as a commission (ran it through the brokerage). On that deal, my fee turned out to be 10%, and that buyer was very happy to pay me that fee. But he's not a cheap-wad and was able to see the value in the service that I provided.

As for the coaching - it's harder than hell to even get any coaching students from this website because of the rules that they have set up.  And I follow those rules (while many others do not).  And again, people want something for nothing.  Jay and Sherrod especially, you have seen the wealth and quality of good advice that I have put out here on BP - for free.  And the truth is that it's very difficult to get most of these newbies to fork out a measly $97 for a book that's written by an investor (not me) that has done over 1000 transactions.  My hourly rate with coaching here with BP contacts is paltry, and I will probably just quit offering the service.  But again, I put my money where my mouth is.  I pay almost $500 per month for the coaching that I take.  I've been very successful at investing and flipping houses for over 10 years.  And yes, there's tons of free info here on BP and other places on the internet, but I still see the value in having a good coach (and, unlike most, I am willing to pay for it, and willing to pay people for what they are worth - and willing to pay for great quality, not just the lowest price).

I don't know how to end this.  I really don't care what y'all think of me, and I know deep down inside about the quality of person that I am, and the quality of service that I provide.  I really don't even need to be making income from coaching and Realtor work in the first place, so I can be picky and only work with people who recognize that value that I bring to the table and who are willing to pay me well for it.  I guess that's all for now.  Good day.

I thought about this a little more.  If you're reading this, please be sure that you have read the other posts above too.

First, I stand by my statement that I will never take a flat-fee-limited service listing.  PERIOD (well, it's hard to say "never", but the market would have to completely change, and that is still a long way out in the future).

As for working with buyers - I really don't work with buyers much in the first place. They are too flaky. Not loyal. Difficult to get them to sign a Buyer's Agency Agreement. And again, they are NOT my "clients" unless and until they do sign that paper. Now, what I can do (and this is perfectly legal and ethical) - what I can do is to refuse to work with buyers who refuse to sign Buyer's Agency Agreements (I may still choose to skip the paperwork for friends and family, that's my choice). And, in that BAA, I can state that I am a full-service Realtor only. I do more than just show houses and write offers. For example, some of my other services include (but are not limited to): negotiating lower prices for my buyers, reviewing the HUD-1 settlement statement for errors, recommending trusted title companies, inspectors, and termite guys who do an excellent job and at a great price (I often get discounted pricing due to the volume that I buy myself), etc, etc. "Now, Mr. and Mrs. Buyers - I often save my buyer clients money in many ways. I only provide full service. I will not show you a limited-service-listing. Period. If you want to buy one of these, I will release you from this agreement, with no penalties. Also, there are many other Realtors in this area who do not offer the Buyer's Agent 3% for all the hard work that they do in bringing a qualified buyer to the deal. If you want to see these listings, I will show them to you as well, provided that you agree in writing in the BAA to further compensate me yourself an additional 1% of the purchase price. In exchange for the total compensation that I will receive, I agree to provide my full suite of services which include reviewing the HUD, recommending the best service providers who often give my clients discounts, etc, etc, etc). Here's where you sign on the BAA. Will this work for you? If not, I can give you the phone number to some Realtors who may not work as hard for you as I will".

And, if y'all here on BP still think that this is somehow unethical or illegal, I will gladly give you the phone number to my broker, my local association and MLS, and my state's real estate commission.

i never had a Buyer "run off" on me. Ever. And I never asked them to sign a Buyer Agency Agreement.

Maybe you are coming across a little too salesman and not enough trusted advisor?

@BrianL.  I think all those votes were against you because it sounded like you would not show your buyers a property offering 2.5% to the buyers' agent.

No one should have any qualms with you refusing to list a property for less than 6%, especially if prices in your area are often in the 100k range.  Your prerogative.  That is an upfront negotiation. 

I don't think you ever said you wouldn't SHOW a property with a 2.5% commission split.  That is what I was I was driving at.  Maybe we should start a thread asking if any agents or someone who has used an agent refused to show a less than 3% commission.  I would like to hear if and how that goes down.

And I only mentioned your REI clients because buying a nasty REO has been one of the best ways to drive a good deal. So working with someone who won't show 2.5% deals eliminates a lot of REO listings.

Originally posted by @Sharad M. :

@Jay Hinrichs  

For my listings, my agent charges me 4-4.25%. He gets 1.5-1.75% and the buyers agent gets 2.5%.

So I curious if commission is something that a buyers agent can negotiate. I have never run across that situation.

Yep it is, each time ive sold via flat fee listings there is typically one or two agents that want to negotiate the BAC and theirs nothing wrong with it. I typically offer 2-2.5% BAC when listing for sale, but have negotiated with Buyers agents for a closer to 3% BAC many times to ensure both parties work together well. I think flat fee listings are going to become allot more popular as time goes on, back in the day buyers didnt have direct access to the MLS and auto searches, etc. it was the realtor who had to find the house based on what the buyer wanted and go through a more traditional slower process instead of now where allot of times its the buyer that searches through the hundreds of listings till they find the house thats just right for them, it was allot more work for realtors back then.

with flat fee your getting two things: saving on the seller's agent commission, so your paying only 2-3% instead of 5 or 6%. And allot of people like myself prefer to do their own negotiations therefore not benefiting/needing a seller's agent.  The seller knows thier property best and has their own best interests at heart, and obviously by Bryan's comments some realtors are only concerned with "their business"/money therefore may try to push a poor sale just to get a sale so they get paid instead of trying to get the best for their client.

Flat Fee listings arent bad and doesnt mean the seller is trying to get out of paying the Buyers Agent, it is just a new option and likely will become allot more common as real estate selling/buying becomes simpler, advances with technology and the times.