Every great once and a while a concerned home seller asks us about this: "Do buyer agents boycott flat fee MLS listings?" or "Will an agent refuse to show a flat fee brokers'' listings?" The short answer is no, for the reasons listed below. Often, the only time a seller asks us this question is that they were talking to a traditional agent who wants them to pay a huge commission. The seller mentions they may use BuySelf.com to list their home.
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Over the past year or so I have been recruiting flat fee brokers from all over the United States (including one in Puerto Rico) in the hope of starting an industry organization just for flat fee brokers.
Recently I was at a national meeting in Washington, DC of the Executives of Multiple Listing Services. There were hundreds of people at this meeting, and the topic ended up being flat fee MLS listings. I guess it should be no surprise that these MLS leaders, who ranged from the smallest one county MLSs to the largest MLSs in the country (that cover whole states and can have well over 30,000 members) had lots of questions about how flat fee listings work, and the role of flat fee brokers in the MLS.
This past week the Wall Street Journal had a short article about Flat Fee Listings where Albert Hepp, Lead Broker of BuySelf Realty, was quoted.
Recently our company joined another MLS and I was required to attend an MLS Orientation. Being in a class filled with brand new Realtors brought back memories of my start in real estate back in 1989 and also made me feel like a grizzled veteran. I struggled to resist the temptation to tell stories of how it was back when I started in real estate and the challenges to get established in the business.
We just had a seller who was having trouble getting showings on their listing, and therefore their home was taking longer to sell then they expected. I had a chance to talk to them, and looked at their listing and saw the common listing comments "hardwood floors, across the street from a park, remodeled bathroom..." and then I saw it: "No showings without 24 hour notice and no showings between Noon to 3pm."
I just got back from a trip to a conference at the Consumer Federation of America (CFA). I was invited to represent flat fee brokers in a CFA Real Estate working group. The CFA wants to support the growth of flat fee mls listings by advocating for fair competition and vigorous enforcement against any traditional broker that attempts to compete unfairly. Our working group will meet regularly, which means I will be spending more time traveling to Washington.
A few weeks ago a reporter with Money Magazine flew into town and wanted to interview me about a number of real estate topics, including flat fee MLS listings and closing costs. I was happy to help out in any way. I liked the way the reporter focused on finding tips that their readers can use to save money on their closing costs, which isn't easy.
I hope that I will be mentioned in the article he publishes, if he does I will let you know.
I am frequently asked by Flat Fee Sellers "what should I offer as a commission amount to the buyers agent?" or more directly "can I save even more money by offering the buyer agent a lower commission?"
I have a strong opinion on this topic: Pay the most common buyer commission amount for your given area, around half the total commission sellers pay to sell a home the traditional, expensive way with a broker, 2.5% to 3% in most areas. This is not the area to try to save money, it will hurt your market time and possibly the success of selling your home.
In the past year I have been contacted by the United States Department of Justice (DOJ) and United States Federal Trade Commission (FTC). It seems they want to make sure that as the Flat Fee MLS Listing evolution of the MLS takes off and becomes popular, that there is no backlash from traditional brokers. I have often worried that as Flat Fee Brokers become more successful that traditional brokers who are losing business may be tempted to compete unfairly.