Recently, I’ve noticed a lot of flat fee listings in our local MLS. These listings are easy to spot because usually the photos are dark or sideways, the report is only partially filled out, or the comments section doesn’t really highlight the property well. I usually know it’s a flat fee listing before I even see that it’s labeled as Limited Service (that’s our MLS designation for what most sellers refer to as flat fee listing agents).
In strong sellers’ markets like our Charleston real estate market, we often see sellers trying to save money because they know how quickly homes are selling. We saw this trend back in the 2005 market where it seemed like listing agents only had to put a sign in a yard in order to sell a listing.
The point of this blog is not to push sellers to hire a full service listing agent or pay 3% in Realtor commission to a listing agent. Instead, the point is to inform sellers what they’re saving or losing in that flat $500 fee that they spend just to get a real estate agent to enter their home into the local MLS.
Many Limited Service Listings Don’t Show Up on Charleston Real Estate Websites
Here on our Keadle Group website, we show all the listings in our raw data feed regardless of the company or the status as a limited service listing. We do this because we want our buyers to see ALL of their options and have full access to homes. However, you’d be surprised how many websites have programming code in place to strip out limited service listings. Why? See below.
Flat Fee Listings are Notoriously Problematic for Buyers and Their Agents
Agents know that when they bring a buyer to these sellers, they’re going to get stuck with twice the amount of work, more liability, and a higher chance of the contract falling out before it gets to closing. Even when buyers’ agents are paid full commission for a FSBO (For Sale By Owner) or a flat fee listing, they don’t want to find themselves in the sticky situation of representing a buyer when the seller has no idea about what the selling process entails. Although this stigma is unfair, it’s important for sellers to understand the reality of “you get what you pay for.”
Entering a Home into the MLS is Only the First Step
It’s crucial for listings to be included in the MLS because it’s the only way a seller can get the visibility and showings required to get the home under contract. However, it’s only the first step in a long process that can take up to a couple of months. By the time we get our listings into the MLS, we’ve already spent weeks creating a comparative market analysis to determine value and days on market, we’ve paid for the home to be professionally photographed out of our own pocket (which includes the virtual tour), we’ve contacted Realtors within our office/company to let them know about our upcoming listing, and we’ve worked with our seller to get the home ready for showings (occasionally this involves repair work to address rotten wood, for example). And then, once the home starts showing up as active on the MLS, we work to get showing feedback and to host our company’s Caravan of agent previews among other marketing strategies.
When we get our first offer, we know how to handle multiple offer situations in order to get the best price and the contract that is most likely to make it to the closing table. We negotiate repairs and line up the best contractors to get the job done. Our experience with addendums and our relationships with attorneys, lenders, inspectors, and the like are valued for a reason.
Simply entering in a listing to the MLS is such a small part of the selling process that I’m amazed sellers are willing to pay up to $500 for it. I can tell by the way the report looks that the agents spend very little time on each one. For sellers considering the flat fee route, I would recommend learning as much as possible about marketing a home and the selling process in general. Either you’ll learn enough to keep yourself out of small claims court, or you’ll understand the importance of hiring a full time Realtor to sell your home. Either way, it will be worth the time you spend!