Hey! David Edgerton here, I hope everyone is having a great day. Okay. So, I get this question a lot, I see it a lot on the internet and it’s, what is a flat fee MLS listing in Houston?
And just to make it short, basically it means that some sort of realtor or broker who has access to the MLS is willing to input and basically advertise a house for sale at a lower than status quo cost, or below the status quo fee.
And there are so many different business models now and so many different fee structures that it’s just, really you want to be careful on what it is that you’re paying for or what your expectations are.
But let’s just back up a little bit and first go over, what is the MLS?
If you’re in the Houston area, you’re probably familiar with har.com or HAR. This is the website that all of the real estate agents use to work with their buyers and sellers and renters and to search for homes; this is the MLS, the multiple listing service in Houston.
HAR is a fantastic website and when someone is looking to sell their house, typically they’re going to call up a realtor and talk to that realtor and say, hey! I want to sell my house; will you be able to put it in HAR? And they’re going to say yes, because they’re a member of that multiple listing service just like I am.
When you put your house for sale on HAR, you’re basically saying… As a seller, you’re telling the world that, yes, I am able to work with a buyer who has a realtor.
So, basically you’re saying that, I want to sell this house to the best possible buyer and with that being said, the best possible buyer probably is going to have a realtor to help them buy. And you’re saying that, it’s okay I will pay that buyer’s agent 3% of whatever the sales price is.
Just to summarize, to get into the MLS, you’re saying that yes I’m willing to sell my house and I’m willing to work with a buyer’s agent and pay that buyer’s agent 3% if they bring me the best qualified buyer.
Back in the old days it used to be a lot different how realtors used to work with finding houses for sale, working with sellers and buyers but the internet, you know, especially with things like Zillow and how people can go online and just use all these different tools to find a house for sale.
Over the years, the amount of work involved to list and sell someone’s house on the MLS, in my opinion has gotten a lot easier. A couple years ago when we were in Houston; a very, very hot market, anything would sell. All you had to do was basically put a sign in the yard and maybe make a very basic internet listing and the house would sell, maybe even with multiple offers or within a day.
Things have kind of slow down a little bit. But the point is that, the way that houses for sale are being advertised has gotten a whole lot more efficient and the Internet has drastically changed things.
So the MLS, a lot of people equate now the MLS with the internet and when you think about the buyer’s mentality on what it is that they’re doing to try to buy their own house or find their own house.
A lot of buyers these days are doing… are searching for houses themselves and starting their home buying journey on their phone or on their computer. And so the amount of work involved as a listing agent that works for the seller or even for that matter, a buyer’s agent working with the buyer has gotten a little bit easier.
So, with that being said, there’s realtors out there that are classified as discount brokers or flat fee realtors that are basically saying, hey! Mr. Seller, I will sell your house rather than paying the going rate that used to be from the old days; I’m willing to charge less.
And generally speaking, these people that charge less than the going rate are called a flat fee discount realtor or a flat fee discount broker.
And to get… to post that your house for sale in the MLS, you’ll basically have a flat fee MLS listing because you’re working with a realtor who’s able to take… are charging you less.
Now, with the laws in Texas or the local MLS board, like HAR, there really isn’t any sort of rules or any laws that dictate how much a seller pays in commissions or fees to sell their house.
But, so because of that, there has been arise in, 1% listing fee brokers or just a $599 listing fees and all these different things involved, and ultimately this is driving down prices on what a seller is paying.
So, back in the day a seller would pay 6% were the brokers, since there would be two brokers involved; one for the seller and one for the buyer would split it three in three, so 6% total.
But now the average price that a seller is paying is going down, whether that be 5%, or 4 ½%, or lower.
So, a trend for the future is that sellers are paying less.
However, what I’m saying is that sellers are still paying that 3% to the buyer’s agent and quite honestly, I just don’t really see any way around it.
Okay. So, I’ve already kind of gone on what the definition of a flat fee MLS listing is and what a flat fee broker is, but I just want to caution you, if you are looking for a discount realtor, just be careful.
Like I said, there are a lot of different plans and packages and ways to do it and you’ll want to know what your expectations are or what you think are your expectations on how the whole process is going to go.
You may say, well, I want a professional listing, I want someone to answer my phone calls and E-mails, I want to be updated on what’s going on, I want open houses, I want a sign; all that stuff.
And, you know, honestly if you pay certain companies a really low fee, you probably aren’t going to get that.
So, there’s varying degrees and if you have any questions, it’s always good to just reach out and call and also call around, and call different agents to see what they’re willing to do for you. Hopefully you found this helpful. If there’s anything I can do, just let me know.
Remember, right now I am running the “sell your house for free if you use me to buy your next house”. Restrictions apply, but I have that information on my website. Thanks again. Have a great day!