Selling your home without a real estate agent can save you thousands of dollars. According to the California Association of Realtors (CAR), in April of 2013 the median price of a single family detached home in California was $402,760. Given a typical commission (5.36% on average in 2009, according to Real Trends), the cost to sell a typical California single family detached home comes out to $21,588. Over a time horizon of 30 years, $21,588 compounded monthly at 10% interest amounts to more than $428,000. Clearly, selling your home on your own can amount to a tremendous financial windfall, and the first step in marketing your home is listing it on the MLS, and to do that as a For Sale by Owner (FSBO) seller you need to utilize the services of a flat fee MLS provider.
According to the U.S. Department of Justice a flat fee MLS provider is real estate broker who offers their services, including placement of your home on the MLS, on a fee for service basis that breaks up the typical real estate broker offering into individual services that you can choose to buy or not buy. Here what I believe most important factors to look for when selecting a company to place your home on the MLS for a single, upfront fee:
- Price: Often the flat fee MLS providers all offer the same general service and the key differentiating factor is the price that they charge. Prices can range from $80 to over $600, depending on your location (example California comparison chart). Be sure to thoroughly search for the lowest price, as a little bit of effort can pay off big time.
- Length of Listing: Flat fee MLS listing contract lengths typically vary from 1 month to 12 months, depending on the provider. The length is often, but not always, related to the amount charged so be sure to check how long your listing will be active on the MLS prior to signing any contract.
- Photos on the MLS: Having more photos on the MLS is a good thing as it can answer many of the buyers questions in advance and also weeds out many buyers who may otherwise take up your time. You will want to have the option of placing as many photos on the MLS as possible (most MLS’s limit the number at 24).
- Syndication: Syndication is when a listing is picked up by other websites. You will want to be sure to have trulia, zillow, and realtor.com pick up your listing as these websites account for nearly 50% of all real estate traffic on the Internet, according to Compete.com. Additional sites are nice as well, but they pale in comparison to the marketing reach brought to you by these three so make sure you get all of them included in any flat fee listing package.
- Extras: Additional services they can provide such as contracts and disclosures (so you can effectively handle buyers), signage, lockbox service, are all extras that are nice to have.
Finding the Right Provider: Often, using a search engine such as Yahoo, Bing, or Google and searching the term ‘Flat Fee MLS’ can be a great starting point for this service. Be sure to check the ads (at the top and on the right column) as well as the organic results. In addition, some websites may have pages which compare the flat fee MLS providers.
Full disclosure: The author operates homecoin.com, which is a California flat fee MLS website referenced in the article.
April 2013 Sales Report – California Association of Realtors
Game Plan: How Real Estate Professionals Can Thrive in an Uncertain Future – Real Trends
Competition in the Real Estate Brokerage Industry – U.S. Dept of Justice
Real Estate Aggregators Trulia and Zillow Dominate the Online Home Hunt – Compete.com