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Alternative Ways of Selling Your Home: Flat-fee Listing Services

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With the advent of the Internet the options available to property owners have increased considerably. Real estate agents of the past had a firm grip on the information and data regarding homes for sale, but now over eighty percent of that information is available via the Internet so they no longer have that exclusivity to enjoy. Most of this has come about due to a tightening of homeowner’s budgets as the economy slipped into recession and the real estate bubble of the 1990’s burst. Many homeowners who wish to sell their property nowadays are looking for ways to save on commissions and not forfeit a big chunk of their home’s equity to real estate commissions. The new flat-fee services being offered across America can help people to achieve these savings by doing a large portion of the marketing and sales work themselves.

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It is also becoming a consensus of opinion that selling a home with the help of a broker can end up costing more than most people imagine. The National Bureau of Economic research recently published figures that show that using a real estate agent could shrink the selling price of a standard home by 5.9 to 7.7%. So the idea that traditional brokerage services costing six percent can help a home owner net more money from the sale of their property appears to be false.

One specific group of property owners who are opting in for flat-fee services are those facing foreclosure. The number of distressed property sales across America has risen radically in the last few years making short sale and foreclosure properties an ever-present sight. Sellers who are now forced to sell their homes for less than their mortgage loan simply cannot afford to pay agent’s commissions as well as absorb the losses being created by the current nationwide real estate market’s condition.

In the past the greater percentage of people would hire a real estate agent to handle all aspects of their sale. The agents would enter into a contract for listing the property on the local and national multiple listings service (MLS), provide all the For Sale signs, help the owner prepare their home for viewing, meet, show and negotiate with prospective buyers and also help with the closing. All though this is still the most popular method today, many are opting to do much of the work themselves.

Many real estate brokers in America know that they face competition from the Internet, and they know that in the current economy this trend will increase even more. So rather than lose that slice of the market they are offering fee based services that are charged for on an individual basis. Their menus of fees cover many of the traditional services, but allow for the seller to choose which ones he wants. Such items as:

  • MLS listing services locally and nationally.
  • For Sale signs to that can be placed on the property and around the neighborhood.
  • Flyers, brochures, and real estate journals.
  • Web pages with information and an extensive photo gallery of the property.
  • Contract forms.
  • Lock boxes for keys to be placed at the home to facilitate viewing.

These pragmatic realtors understand that their industry is changing rapidly and they realize if they are to keep in step with current trends they too must also evolve. They know that sellers need not and should not have to pay for services that they do not want to avail themselves of. When a seller is taking advantage of a full suite of real estate services they will sign a contract that requires them to pay a commission of around six percent. This equates to approximately $6,000 dollars for every $100,000 they get for the sale of their property. Although the buyer’s agent will still receive their fifty percent or so, the savings is on the seller’s side and it’s enough to prompt people to do much of the work themselves in order to save. Depending on the services that a seller elects to contract for they will pay anywhere between $150 dollars and $1,000 dollars rather than a possible ten or fifteen thousand dollars in fees and commissions.

Who Could Use a Flat-fee Listing and Who Should Probably Not

The two aspects of selling property, without the assistance of an experienced and knowledgeable agent, that can be tricky are the sales contract and the closing. These are the most difficult aspects and entail an evolving set of laws and guidelines, prior experience, and for the closing, having a network of professionals to assist.

In the past a large part of real estate agent’s services was providing the listings, but now it has shifted to more of a basic services profession where the product is knowledge and guidance. An important part of a real estate agent’s job is to advise and to help with disclosure requirements and fair housing standards, so a deficit of experience and knowledge in those areas can lead to mistakes, deals gone wrong and in some cases fines for the sellers that are incurred because they just did not know what to do. Some flat-fee service providers do have an option that includes consultation throughout the sale but they do charge in the neighborhood of one percent to do this. In many cases the cost of this on-going service will more than surely off-set the risk of making mistakes, being fined and possibly losing out on a good sale.

The savings that a flat-fee listing offers can also be used in other ways - to help facilitate or accelerate a sale. The savings can be offered as a larger commission or a bonus for the buying agent and thus create a good incentive for them to work harder on selling a property, or it can be offered to the buyer in the way of paying the closing costs or possibly a year's worth of homeowner's warranty.

The people who should look closely at the pros and cons of using a flat-fee service are homeowners who have never sold a home on their won. If they are someone who has sold two or three homes in their lifetime they should have acquired some experience that would help them if they did choose to undertake the process without the full participation of an agent.

Different Flat-fee Programs are Available from Different Providers

Some MLS flat-fee service providers offer minimal services for between $150 and $200 dollars. For this limited fee they will list a property with the local and national MLS systems, provide a For Sale sign, and a basic brochure. As the number of services increases, the prices will also go up relative to the particular suite of services chosen. Most flat-fee service providers offer a mix of the following services which can range from four or five hundred dollars and upwards of a thousand dollars or more:

  • Local MLS listing.
  • National MLS listing.
  • Listings on thirty to forty properties for sale websites.
  • Listings in local real estate and open house journals.
  • Dedicated website with extensive photo gallery and virtual tour.
  • Provide a For Sale sign.
  • Provide a customized For Sale sign.
  • Directional street signs showing the way to your property.
  • Provide printable flyers and/or brochures.
  • Provide a lockbox for keys.
  • Provide contract forms.
  • Provide contract review.
  • Provide contract negotiation, and negotiate offers and counter offers.
  • Provide a weekly MLS report.
  • Provide a fair market analysis of the property.
  • Provide periodic market analysis snapshots.
  • Take professional photos of the property for brochures and websites.
  • Create an interactive web based virtual tour of a property.
  • Provide a professional review and analysis of the property.
  • Provide a listing for six months.
  • Provide a listing for twelve months.
  • Provide a listing until the property is sold.
  • Provide the option to cancel the listing at anytime without incurring a penalty.
  • Provide attorney and title company services for the closing.

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