What Exactly is a Flat Fee MLS Listing?
By FFMLSM Staff Writer:
MLS stands for Multiple Listing Service; a database of homes that Realtors® use to share their listings with other Realtors®. In the traditional real estate model with a high 6% commission, the Listing (the Seller’s) Brokerage usually splits its commission 50:50 with the Selling (the Buyer’s) Brokerage each earning 3%. With a Flat Fee MLS Listing, the listing broker works for a flat fee. However, today Flat Fee MLS is far more than a Flat Fee Listing of days past. Today Flat Fee MLS is also à la carte services.
The traditional brokerage industry prefers to refer to Flat Fee MLS as limited service but it’s far from limited. What it really is, is consumer choice. Many flat fee brokers offer all of the services that traditional brokers offer but in a menu format where sellers can pick the services that they want and pass on those they don’t want. The majority just want MLS marketing and pass on transaction management but a growing number are asking their broker to negotiate and brokers are catering to that demand with a range of programs from a flat fee of a few hundred dollars to ¼%, ½%, ¾% or greater.
Who is purchasing Flat Fee MLS services? The client base seems to be broad. It seems to be a mix. Some are sharp educated consumers. Some are frugal value minded consumers. Others just want control of their listing and the price is not necessarily the factor.
For Sale By Owner (FSBO) sellers also flock to it as an alternative for costly commissions while still getting the benefit of maximum exposure on MLS and Realtor.com. The one thing that stands out is the growth in market share. In 2000, less than 1/10th of 1% of the people used a Flat Fee Broker. Today it’s about 8%.