The flat-fee listing agency type of service has been around for a while. A flat-fee listing gives you the opportunity to have your house listed on MLS for a flat fee plus the buyer’s commission. Usually a flat-fee listing involves the agent adding your house to the local multiple listing service (MLS), giving you a sign for the yard, a lockbox for the door and registering you in the centralized showing system that agents use to setup appointments for showings, if your local real estate market uses a scheduling service. There are other options available to you but for those are the basic service you should insist on. From that point, you’re on your own. You market your house, conduct showings and open house tours, etc. You represent yourself and take care of all the little details. I’m not going to argue the pros and cons of flat-fee -vs- full-service listing services, because I believe both have their own merits. However, I do want to ask flat-fee clients, are you too cheap for your own good?
Most flat-fee listings services involve an a’ la carte list of services. One of these services is MLS listing photos. Recently I had the chance to talk with a flat-fee agent about why a large amount of flat-fee listings did not have photographs in the listing. His answer was surprising. He said in his experience, the reason for a lack of photographs in the MLS was because his clients were too cheap, trying to get away with spending as little money as possible. Apparently in his flat-fee service, pictures cost extra and a lot of clients don’t want to pay a few dollars more to insert pictures into their MLS listing.
This is ridiculous. Flat-fee listing clients need to stop focusing on trying to be cheap and start focusing on becoming competitive. Your neighbor hired a full-service real estate agent to sell their house and their MLS listing has up to 25 pictures in it, pictures of the front yard, back yard, designer kitchen, master bedroom and bath, living room, dining room, etc. All your listing has is a big box with an “X” through it with the caption “picture not available.” If you were a buyer shopping for houses on MLS, which house would you want to look at, yours or your neighbor’s. Real estate agents don’t waste their buyer client’s time showing them a house without first knowing what it looks like unless their client is looking for bargains. There are lots of houses to choose from in the Dallas / Fort Worth real estate market and approximately 90% of them have lots of pictures. With lots of houses to choose from, and a limited time to visit them, you can expect yours to be passed over when they start the elimination process.
If you’re serious about selling your house, spring for the pictures. So what if it costs you a hundred dollars to get the agent to send a professional photographer to shoot pictures of your house? Spend the money to fill your listing with pictures showcasing your house, so that you can compete with your neighbor’s full-service agent’s MLS listing. Do you think spending $100 to get pictures added to your listing is too high? Consider the fact that your house will linger on the market longer and drop by thousands from your original price.
You can be cheap without hurting yourself, but by not paying for MLS photos, you’re screwing up. Honestly, what’s the point of listing your house if you don’t want to do it right? A few years ago, I was looking for a rental property, and I stumbled upon a listing from a flat-fee broker that didn’t have any pictures in it. The listing was on the market for longer than 8 months and I was amazed in how good a condition it was in when I visited it. I bought that house for $35,000 below the original list price. In that homeowner’s case, the cost of one photo was $50, or 25 photos (and other services) for $200 but the cost of not having any photo was 9 months on the market, and $35,000.
If you have a full-service agent and do not have the maximum amount of photos (25 in most cases) in your MLS listing then you need to call that agent right away and insist they market your home correctly by filling that listing with photos. For a 6% commission, it’s the LEAST they can do. Be sure to look for other articles for tips on how to take good MLS pictures.
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I’d be curious to know what you disagree about. While I prefer full-service agency, there’s no denying flat-fee is better than going FSBO without a MLS listing. However, clients need to understand that just having an MLS listing isn’t enough. You have to have a GOOD MLS listing to attract buyers. It’s worth the few extra hundred dollars to do it.
Great article about listing photos. I agree there are many sellers unwilling to spend on a good MLS listing, but also there are lots of MLS flat fee brokers that offer service packages that don’t offer many photos. In Connecticut, our clients get them maximum photos on the MLS and Realtor.com. Makes a huge difference!
There are many aspects Sellers should investigate when considering flat fee or full service. Many ‘full service’ brokers snap one front shot of the home load it up to the mls and call it good. The wide disparity of services offered in the full service segment leave many Sellers wondering what they are paying for, hence the proliferation of flat fee. I do tend to agree though that the flat fee segment has a tendency to cannibalize itself in charging next to nothing. If a flat fee company is not making a minimum of 1k per transaction it will not remain profitable in the long term and no amount of volume can cure that, long term. Pretty soon Sellers will be ordering real estate services off the dollar menu if we’re not careful. If you gravitate toward a flat fee mindset, take a consultative approach. Compartmentalize your services and charge Sellers per Diem, and don’t forget to charge accordingly, much like an attorney or an accountant providing specialized knowledge and services. Your Seller Client will still save money and you’ll stay in business!
Wes:
I totally agree. Yes, you can save money by using a flat-fee agent but don’t be so focused in saving a few hundred that you end up costing yourself thousands in price reductions. I actually like the Ala-cart approach where all services are broken down into fixed priced blocks. However, this wouldn’t work for full-service real estate agency services. People are use to not paying for anything until the house sells. That’s a hard habit to break. Personally I’d love to get paid for my time, but would that make me more or less aggressive? Flat-fee services will always be price competitive because there’s nothing differentiating your services from your competitors. In general, flat-fee services are mainly photos, MLS listing, sign, flyers, etc. and most offer the additional services of contract negotiations and closing at an additional price. How do you make your sign, flyer and MLS listing better than your competition while still maintaining very low overhead? I don’t know if you can. You can’t brag about selling more houses because that’s not what flat-fee agents do. I think it’s a hard market to dominate but you can make up with it by serving a broader area at a higher volume.
As I am just getting into the flat fee side of real estate after 12 years of traditional real estate, I think that it all depends on how much the flat fee company decides to nickel and dime their clients. Too often, from the sites I’ve checked out (about 25 of them), flat fee companies tend to charge for ridiculously simple-to-do features. Pictures? come on guys, now-a-days, we all upload and post pictures on a regular basis.. how hard can it be? Do I really need to charge them extra for more pictures when I upload 9 facebook pictures just for laughs per day?
Why can no one spell á la carte properly anymore?
Correction made. Thanks for spotting.