Looking to sell your home? You’re not alone – the real estate market is busier than it’s been in almost a decade. And this is as great time as any to maximize your proceeds.
But what’s the best way to sell your home?
You can take one of 3 approaches to selling your home:
- Hire a real estate agent to help you with all parts of the sale and pay 5 to 6% commission
- Go it alone as a For Sale By Owner (FSBO) with limited marketing exposure to your listing and try to save on the commission
- Or choose a Flat Fee MLS option with full marketing exposure for your listing and still save on the commission
Let’s evaluate each option but before we do, let’s also assess what’s most important to homeowners when trying to sell their homes.
- Sellers Want the Most Profit in a Sale: According to the Zillow Group’s 2018 Consumer Housing Trends Report survey, most sellers see their homes as an investment. It’s no surprise then that for over 50% of sellers, getting maximum returns was the most important consideration when selling their homes.
- Sellers Want Control in their Transaction: 60% of baby boomers wanted to save money. But over 40% of younger sellers desire more control over the transaction.
- Sellers Want to Save Time: The 3rd important finding was that time is an important consideration for home sellers. And towards that, getting maximum exposure for their property listing is key.
With that in mind, let’s start with assessing the first option of hiring a full service agent or a discount brokerage.
Option 1: Hire a Real Estate Agent
What does a Real Estate Agent do?
- Represent you and your home.
- Prepare the paperwork.
- List your house for sale in a multiple listing service (MLS).
Multiple Listing Service, which is only accessible to licensed real estate agents, exposes your property for sale to a larger scale and gives a higher chance of closing your sale. Being represented by a real estate agent is preferred by most sellers.
- Market your property.
- Facilitate your home showings and negotiations.
- Assist you with the closing process.
Easy-peasy as it sounds, but there is a catch. While this is the appropriate choice for those less educated on the process of selling their property, it fares worst on two of the three key metrics important to today’s home sellers. Real estate agents are expensive – 5 to 6% of the sale price, and sellers also relinquish control of the sale once they sign an Exclusive Listing Agreement.
Option 2: For Sale By Owner
What is For Sale by Owner or FSBO?
For Sale By Owner or FSBO simply means you, being the owner, sell your property all by yourself unaided. You advertise your property traditionally, online or however you want it, tell your friends and relatives about it, and wait for someone to call you for inquiries.
For sure, this came into your mind instantly when you decided to sell your house. The problem with going pure FSBO is that your property listing gets very limited exposure outside of say Craigslist ads, Zillow FSBO listing, and your yard sign. This lack of marketing is really why most pure FSBO sales fail.
But there’s a third option: A By Owner Flat Fee MLS Listing. This is arguably the best method to get immense exposure for your property for sale without having to pay up to 6% commission. It saves you money, time and effort.
Option 3: By Owner Flat Fee MLS
What is Multiple Listing Service or MLS?
Multiple Listing Service or MLS is a property listing database used by licensed real estate agents and brokers to list their sellers’ homes and properties. Every listing is automatically posted to hundreds of real estate websites, including the major ones like Zillow, Trulia, Redfin, and Realtor.com. It is, by far, the most efficient and the most effective marketing exposure for your home, exposing it to both local and national platforms and targeting active buyers who are working with real estate agents. However, as mentioned beforehand, MLS is only accessible to licensed real estate agents.
So, how can you use this method without having to hire an agent and avoid paying the shivering cost of a full 5 to 6% commission?
Well, good grief! You can list your property on the MLS as a For Sale By Owner which means you can list your property without hiring a real estate agent. To do that, you only need to purchase a Flat Fee MLS Listing.
This is literally the best option for most home sellers, and here’s why:
- Maximum Profit: Instead of paying 3% of the sale price to the listing agent, with a By Owner Flat Fee MLS, you’ll only be paying a small flat fee. That’s savings of thousands of $$$!
- Maximum Control: Instead of signing an exclusive binding contract for a fixed term when you list with a full-service real estate agent, By Owner Flat Fee MLS usually only requires a limited service, entry-only MLS Listing Agreement. So you maintain full control of your sale!
- Save Time: With an advanced online FSBO platform like Houzeo.com, you can react quickly to any changes you’d like to make. If you had an agent, you’d request the change, the agent would send you an Amendment Agreement, and you would sign it. Only after that can the change be implemented. On Houzeo, it’s all online! The agent’s specific Amendment Agreement is automatically generated, and changes go in usually within 1 business day!
What is a Flat Fee MLS Listing?
Flat Fee MLS Listing (MLS) is a service offered by a state licensed real estate broker which works as your access point to the MLS platform and acts as your lead generator for potential buyers for a one-time flat fee.
How does a Flat Fee MLS Listing work?
With this service, you list your property with the real estate broker who provides you with only an MLS entry-only service. All other services are excluded. So, you are still the seller of your house and you retain all the rights to sell it as For Sale By Owner, except you can’t call yourself a FSBO. That’s because you’re technically an agent-assisted sale.
How to list your property on a Flat Fee MLS Listing as a For Sale By Owner?
- Research to find the best flat fee MLS Listing brokers in your area. Numerous brokers are available to provide for your listing, but each one offers different plans and packages. Aside from the one-time flat fee which most brokers commonly charge sellers for the listing, some ask for other fees like a listing agent fee and a closing or success fee. You must avoid these kinds of services as it shells you out more money to spend. Opt for one that is most favorable to you.
- Choose a plan. Once you have selected a broker, go ahead and purchase a plan or a package. Brokers offer different packages according to your needs. Choose what is more beneficial.
- Provide property photos and information. After selecting a plan, you will be asked for your property’s information. A few of your property’s photographs, both interior and exterior, are also required to submit for the listing. Users are allowed to upload up to 24 photos on their listing depending on the MLS.
- Sign the listing agreement. You will be required to sign disclosures and agreements necessary for the listing. The real estate broker will enter the information you provided into the MLS and they will be shown as the listing agent. Take note that these documents are very important for the listing. All information must be provided correctly.
What to do after submitting all the required information?
You will need to wait for a confirmation of your listing on the MLS. Your listing usually goes live within 24 – 48 hours after completing and submitting all the information. Your broker will notify you as soon as it is up. Reviewing your listing as soon as it goes live is suggested to avoid inconvenience in the future.
Once your property is listed on the MLS, everything else is on you. Although they will put the seller’s contact information into the “Private Remarks” section of the listing for the buyer’s agent to set up showings, negotiations or for any additional information, you will be the one to stage and show the house, plan and carry out additional marketing, hold open houses, handle negotiations with buyers, and more. Changes of the listing, once it goes live, must be coordinated with your broker.
If you find a buyer and accept an offer, you will go through the closing process. You need to pay the buyer’s agent their commission, submit the closing information to the MLS listing service, and you’re good to go.
One important note. Per MLS rules, sellers must notify brokers within 1 business day after closing their sale. As a very important procedure of the listing process, brokers are required to immediately update the listing on the MLS within 1 business day of home closing. Brokers can be fined for not updating your listing and they will be required to pass that fine onto you.
How does a Flat Fee MLS Listing save you money?
Compared to hiring a real estate agent and pay in full commission, this service is a lot less expensive. There is just a small flat fee for the MLS listing by owner. There will be a commission to pay only if a buyer is represented by an agent which means you get the entire amount of your total sale if there is no agent. Keep in mind though that offering a commission to a buyer’s agent is highly recommended.
You can always opt for something you believe to be the best way possible to sell your house. The bottom line is everyone is looking to save a lot in expenses, time, and effort. Thus, it is highly recommended to work with a company that will directly guide you through the correct options in your local market. Your house will be more likely sold with a potentially higher profit than going the traditional route of hiring a full-service agent.
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