Examples of Flat Fee MLS Estate Deals
Flat fee MLS is a product offered by real estate agents that does not conform to the traditional practice of services offered and payment received. The traditional practice in real estate constitutes the seller of a property entering into an agreement with the real estate brokerage for the provision of the following services;
• Assistance in setting the listing price. This typically entails the brokerage company hiring a property valuer if they do not have an in-house valuer who then approximates the monetary worth of the property.
• Marketing and advertising the property. Different brokerage firms will use different marketing strategies, but this could include advertising the property through billboards, newspapers and property journals.
• Responding to the potential buyer's queries and showing then the property on demand.
• Holding open houses for viewing by interested buyers.
• Preparing the sale contract and handling the contract negotiations
• Managing the transaction to its final stage of settlement.
These services are offered in exchange for around 6% of the sale price if the property paid at the end of the whole transaction. Flat fee MLS estate deals, however, involve unbundled services. This means that the property owner who is looking to sell can choose the specific services that he or she would like to contract the real estate brokerage firm to handle. The seller enters into a menu (a la carte) service agreement that allows the provision of limited services. The guaranteed service from the menu is assistance from the firm in listing the property locally in the MLS. The other services are optional to the client. This flat fee MLS unlike the traditional fee is paid at the commencement of the transaction.
The flat fee MLS is a developing trend in real estate. It was introduced to rectify the rigidity of the real estate industry which made it expensive to dispose property. It is tailored to meet modern consumer needs. This revision is greatly attributed to the internet and its marketing platforms like social media. The seller can therefore eliminate some of the services rendered by brokerage firms by getting the buyer on their own. This model aims to save property owners costs of selling real estate.
A seller is required to enter into a listing agreement with the brokerage form. Typically, there exists three types of agreements that can be entered into;
1. Exclusive on real estate firm right to sell
If entered into, this agreement the property owner pays a set commission to the real estate agent even if he himself finds the buyer. The owner is also responsible for paying the buyer's agent if one exists.
2. By menu agreement
In this type of agreement the property owner chooses from the 'menu' the exact services they want offered. For instance if he can handle the marketing but not the finalization of the contract which might require legal services, he can just pay for those services.
3. Exclusive agency
This type of agreement allows the seller to do marketing for their property and if they are successful in finding a buyer on their own, they are not liable to pay commission to the real estate agent.