Sellers always want to save money on the sale of their house. I get it. This is one of the largest assets most of us buy and sell. Getting the right price may allow you to get to a larger home or a home in a more desirable location. Many sellers ask, Should I sell my House with a Flat Fee Broker?
Sellers may be trying to get their children into better school districts. Additionally, those downsizing may want to move to warmer climates or use the funds to buy a smaller home with cash. Here is where sellers decide to look at Flat Fee Brokers.
Why pay a large amount of money to get a house sold if they don’t have to. Good point!! But….. (there is always a but) You need to do your due diligence and understand what services you will receive from a discount broker compared to a full-service brokerage.
#1 Is There A Difference in Service With A Flat Fee Broker?
There are different business models for discount brokerages, even the name can be confusing. Also, these may be referred to as Flat Fee brokerages. Typically, real estates fees (which are negotiable) are a percentage of the sale price. A flat fee brokerage is just that. They charge a flat fee to list a property, regardless of the sale price. This sounds like a great idea!
However, what do you receive for this flat fee? Again, business models vary, but typically a seller can expect to have their property listed in the local multiple listing systems (MLS). They may or may not take photographs. In addition, they may or may not use a professional photographer.
Will they offer help on home staging? Also, can they provide referrals for you for services to get your home ready to sell? This can include a handyman, painter, plumber, landscaper, house cleaner, etc.
Some flat-fee brokerages require the seller to receive and negotiate offers on the property with the buyer’s agent. Will the flat fee broker actually see the property or list it sight unseen? How well will they understand property features to write a compelling, factual, and informative property description?
Imagine you are selling your home without a background in real estate or negotiating. The seller will need to negotiate with a real estate professional who negotiates contracts every day! Will you be passed from one person to another? What are their priorities? Do you need to net the most money from the sale or is the timing of the sale more important to you?
#2 Is there a Difference in the Experience of An Agent Should I sell my House with a Flat Fee Broker?
Ask any agent about their real estate experience. If they are new, do they have the support of a mentor or someone with a vested interest in their success? Is this an agent working with high volume, such a company that throws out many low ball offers, waiting for something to stick? Are you just one piece of the monthly volume or do they really care if you sell top dollar?
#3 What do I get for the Money I Pay a Flat Fee Broker?
The first question to ask is whether the Flat Fee Broker will help you price the house, or just take your suggested price and input the listing to the Multiple Listing Service (MLS). Also, how Should I price my house to sell? Additionally, your house should be priced competitively with other similar homes in the community. That said, what does that mean?
A full-service agent will spend time reviewing comparable and recent sales. Also, they will take into account the location and condition of those houses. Two identical houses across the street will sell for different prices if one back to a busy street and the other does not. However, if one backs to a golf course, a body of water, or hillside, the price will be different. An agent will not only look at homes listing in MLS, they will look on local tax records for your area. Also, some homes sold as For Sale By Owner or private sales are not in MLS, so the additional work and knowledge of checking tax records is important.
❓ Will I Get Help With Pricing?
The answer to the question of how much should I sell my house for takes experience and time to provide the seller with a recommendation. Additionally, this includes showing the comparable properties that influence pricing. Also included in this is information on those property conditions.
Additionally, ask for a detailed marketing plan. Will they only do the basics of putting up a sign? Are professional pictures used along with quality marketing materials? We know that according to the National Association of Realtors (NAR) states that over 90% of buyers use the internet for home searches. Is your home priced competitively with similar homes and shown in the best light with professional pictures? Is the write up about the home thoughtful, creative, and accurate?
How will this company market your home using social media? Also, do they syndicate your home to other websites to maximize exposure of your home? And, will they schedule your home on a local real estate agent tour?
#4 Will A Flat Fee Broker Hold Open Houses?
Most companies referred to as “limited service” brokerages do not do open houses. They offer limited services. They may enter your listing in the Multiple Listing Service. Placing the house in the MLS system may be all the marketing that is done for you.
#5 How Will My House Appear on the Multiple Listing Service (MLS)?
Sellers need to consider how their house may appear in the MLS. Most MLS boards in the country syndicate listings, including the public remarks. The Public remarks contain the information on the property, ie “waterfront lot with pool and amazing outdoor entrainment area”. The pictures are picked up and go to Realtor.com, Zillow.com, and hundreds of other websites.
If the home description is not compelling, and the pictures do not present the house in the best light, you will have little interest in the property.
Experienced real estate agents strategically provide a write up on the property. Also, most will take pictures in a very strategic manner. The way the photos are presented in the listing is also important to create the desire for a buyer to want to know more about your home. Have you ever looked at pictures of listings online and the first 10 pictures are of the outside? You give up quickly and move on because you want to see the kitchen, master bathroom, and back yard. No one wants to click through 10 pictures to see what is important to them!
Additionally, is the information in the MLS listing correct? If you have a golf course lot, does a buyer understand this? Do you have a great updated kitchen? Does the listing write up explain this to a buyer and create a picture?
? Pictures are key to all listings and need to grab the viewer’s attention in 3 seconds!
A few years ago I represented a buyer on a property that had been in the MLS for over a year! The write up was terrible and there were only 5 pictures, and they were only small thumbnail-sized pictures. I was required to negotiate directly with the seller.
Needless to say, my buyer got a great deal! The seller was happy because he “saved money”. Yes, he “saved” commission money. However, had this property been photographed, marketed, and negotiated properly, he would have netted more money on the sale.
If all that was necessary to sell a house what to place it in MLS, why do we average 20% of listings becoming canceled or expired every month? It the MLS was all that was needed, we would have no expired listings!
#6 How will A Flat Fee Broker Market My Home?
Sellers should ask how much money a limited-service company will spend to market their house? If you are a “limited service” brokerage, you probably don’t spend money marketing. Some sellers think that all that is needed is to place the house in MLS. Unfortunately, these sellers don’t understand what else full services brokerages do to attract buyers to a property. If all a seller needed was to put the listing into the Multiple Listing Service (MLS), then 100% of all homes listed for sale would sell. Unfortunately, we see an average of 85% of homes listed in MLS do sell. The remaining 15% come off the market. Often these are limited service brokerages. These homes may be overpriced, poor or incomplete photos or compelling information may have been omitted.
#7 How Can A Flat Fee Real Estate Company Charge Less?
We have all heard the phrase – You Get What You Pay For – this is true in the real estate industry. To get the maximum amount of money in the least amount of time, a house needs to be marketed correctly. Additionally, the house needs to be staged correctly.
The pricing needs to be correct as well. If a limited-service brokerage gets paid to put your house in the MLS system, their work is done. This is how they charge less, they do less. Additionally, you need to ask yourself, will they care if your house sells?
Again, they have been paid upfront. Traditional real estate agents only get paid when your house sells, and that is at the end of the process? When a home is listed traditionally, the agent is providing feedback from agents who show the home. They continually provide comparable sales for the seller to see what is happening with similar homes in the area. Agents will make pricing recommendations as needed to the homeowner.
#8 Are There Other Fees Besides Real Estate Commissions with a Flat Fee Broker?
In addition to a real estate commission, sellers need to understand there will be other costs besides real estate commissions. There are fees for a title company, a buyer’s title insurance policy, if there is a Home Owner Association (HOA), there may be fees for the seller to provide the buyer the rules of the HOA. Other costs include county recording fees or fees to send your loan pay off to your lender.
#9 Will A Flat Fee Company Do a Home Inspection?
Many real estate agents recommend their sellers get a home inspection before the house goes on the market. This inspection allows the seller to make repairs that would typically show up on an inspection report. Additionally, sellers are often not aware of broken roof tiles or mortar caps that show up on the report. Also, sellers may not go into their attic often and may not be aware of attic issues that may surface.
Sellers should know of any issues a buyer may find in an inspection report. Buyers can ask a seller to make repairs. However, a buyer can immediately cancel a contract due to too many repair issues. Also, having an early inspection allows the seller to get estimates for repairs and negotiate the best price without the pressure of a repair request deadline.
#10 Do I have to Disclose Things About The Property to A Flat Fee Company?
In Arizona, state law requires sellers to disclose material facts about their property. This disclosure is required whether a seller sells the property themselves (FSBO) or with a real estate company. State law requires buyers to have information that could influence their decision to buy a property. Also, buyers need to know anything that could influence the price they would offer for a property.
Should I sell my House with a Flat Fee Broker?
#11 Will I get feedback from Real Estate Agents who Show my House?
Full-service agents will typically call showing agents for feedback on a property. Often, a survey is automatically generated when an agent uses the real estate agents’ secure lockbox. Most flat fee companies do not spend the time and manpower to gather information and share the information with the seller.
Sellers may find it difficult to know why the house isn’t selling after several showings. Is it price, condition, location, or staging? It may be difficult for sellers to make decisions on pricing changes.
#12 Do I have to be Home When The House Is Shown with a Flat Fee Broker?
This is a question for your flat fee listing agent. What type of lockbox will they place on the house, if any? Will it be a contractor lockbox with a 4 digit code or a secure Supra IBox that tracks the name of the real estate agent who accessed the key along with the date and time? Will my home remain secure?
Some flat fee companies may provide realtor Supra IBox in the Phoenix metro area. However, if your flat fee brokerage does not provide a Supra IBox, you will need to be home to provide access to the property. The other option is to place a contractor lockbox on the house and give out the 4 digit code to someone looking at the house. Not a good idea! It is important you make your home available for potential buyers. This is an essential part of selling your house. It can also be time-consuming to be available to show your house.
Inviting Strangers into Your Home?
Also, it can be potentially a dangerous part of the process, as you may be inviting strangers into your house on the weekends during your free time. Or, you may leave work to accommodate a showing request. If potential buyers are accompanied by a real estate agent, they have most likely prequalified them through a lender and they are who they say they are. You have the name of the brokerage of the real estate agent bringing in a buyer as well as the agent’s information. If you are opening your home to the general public through a For Sale By Owner Sign, you won’t know if the visitor is who they say they are. Additionally, you don’t know if they are prequalified to buy a home in your price range.
Today sellers have choices. Most sellers want to get the most money from their sale in the least amount of time, However, there are sellers who will opt for the convenience of getting a house sold quickly. Sellers need to understand the differences in the various options. If getting the most money for a house is important then a full-service broker could be the right answer. Do your homework and ask questions to understand your options.
Should I sell my House with a Flat Fee Broker?
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Should I sell my House with a Flat Fee Broker?