Dispelling Flat Fee Companies
I have noticed a lot of flat fee Realtors posting blogs about how wonderful they are and I thought I would rebut some of what they have to say about why they are wonderful and give you just a taste of what a full service Realtor does.

A Flat Fee Realtor will:

• They will put your home in the MLS, which will automatically upload to Realtor.com (which is losing market share)
• They will give you a sign to put in your front yard
• They put your listings in other county MLS's what they dont tell you is this is pretty pointless. A Realtor from Ft. Lauderdale is not going to be searching for your home here in Central Florida they are going to refer their buyer to an expert in that area.

Generally this is done for $399

Now if you think this is what it takes in this market to get your home sold, why dont you ask to speak with most of their customers who after spending 3-6 months on the market seek a full service Realtor.

Next if you upgrade to $599

• They will give you a stack of legal papers so when you find a buyer they can fill them out (hint you probably wont need these because 8 out of 10 buyers are working with a Realtor who will already have these papers but we'll get into that later)
• Electronic Lockbox - (You should have this)

This fee is paid upfront regardless if your home sells. Does that flat fee company really care if your home sells? Probably not, they already made their money now it's your problem. They have no financial investment in it. Full service Realtors have personal investments in your property and want to see it sell as quick as possible and for the most money.

Now here are my problems with Flat Fee Realtors:

• You still need to pay at least 3% to the buyers agent, if not more. While it's not always right a lot of realtors see that it's a limited service listing so they know they will have twice the work not dealing with another Realtor. So they expect to get paid for it. Plus every other listing is paying 3% and more, you wont to compete on a level playing ground right? In this market we have over 26,000 active listings in Central Florida, I can guarantee you there are atleast 5 properties out there just like yours.
• A sign in the yard oh yippy! What is that suppose to do, honestly a sign is more for the listing agent to pick up buyers for other properties not for you to sell your home. I sell in many neighborhoods where signs are not allowed and I still get these properties sold. What if you live in a neighborhood where signs are not allowed how is that flat fee company going to help you sell now?
• Lockboxes are a must. Agents dont just show properties on the weekends or in the evenings when it's probably most convenient for you, they show them at 1 pm Tuesday afternoon or maybe even 10 am on Thursday. Can you just leave work to run and show your property? What if the agent is running late? If your property isnt readily available at all time's the buyers and Realtors will move on to the next property.
• Free Contracts and legal documents. Do you know what to do with these? Do you know what you can and cannot say in the MLS and not incur a fine, to not open yourself up to liability both now and after the closing? These papers don't discuss that will they be there for you evry step of the way. Do you know what RESPA rules are? This is a big problem with Flat Fee Companies the amount of liability you open yourself up to.
• So who is writing your ads? You? Can you detach your feelings from your house so you can properly showcase and sell it? You may love certain facts about your house, but others may see these as a negative do you know how to truly sell the property to the widest market?
• So where are you going to market your home besides a sign and Realtor.com and how much is that going to cost you week after week?

I could continue to go on but I think I will have bored everyone by that point, if I havent already. So let me recap.

RECAP:

You pay $599 regardless if your home sells, No one to help limit your liability, No marketing department to write your ads, you have to decided where else to market your property and you still have to pay for marketing again paid upfront, You still pay the buyers agent. So lets break down these costs.

Your listing price $200,000

MLS FEE $599 (This money is paid regardless if your home sells)

Buyers Agent $6,000-$8,000

Marketing $$$ $4,000-$5,000 (This money is paid regardless if your home sells)

If your home sells your total amount paid

Out of Pocket $ 10,599-$13,599

Now, If your home doesnt sell your out of pocket paid

$4,599-$5,599

Now if you use a full service Realtor

List Price $200,000

MLS FEE $0

Buyers Agent $6,000

Listing Agent $6,000

If your home sells the amount paid (but not out of pocket, but from your closing proceeds)

Total Paid $12,000

Now, should your home not sell, your out of pocket paid

$0

Again these Realtors have a full investment in your home and want it sold just as much as you. Plus if you are unhappy with their service you can ususally cancel at anytime for $0. Again you paid nothing out of pocket. So where is the real savings using a Flat fee company?

Maybe my next blog will be what you truly get for the money with a full service Realtor.