Colorado Real Estate Broker - Flat Fee MLS Listing Sevices - Boulder Louisville Niwot

You Be The Judge

What are the facts behind the "sell your home for $299" marketing pitch? As a full-time realtor, I offer a variety of residential real estate listing service plans and commission fee options in the Boulder County Colorado communities of Boulder, Louisville, Niwot, Lafayette, Erie and Longmont, as well as Boulder County mountain and rural properties. Allow me to present the facts and let you be the judge.

Who Can Sell Real Estate?

Colorado law allows property owners to represent themselves in the buying and selling of real estate. Otherwise, the buying and selling of real estate is left to licensed attorneys and licensed real estate brokers. Attorneys and real estate brokers must complete strict education requirements, pass a licensing exam and fulfill continuing education requirements. Unless you are an attorney or a real estate broker, it is unlikely that you are experienced with the buying and selling of real estate. When you want a house designed, you hire an architect. If you have electrical problems, you seek an electrician. If the furnace quits working, you call a heating contractor. Why then would you not contact a real estate broker in selling your house? For most people, it is the single largest financial asset they own.

What Is Involved In Selling Your Property?

The sale of residential property is a complex process involving; (1) an understanding of the local real estate market; (2) the designing and execution of a property marketing strategy with a primary focus on Internet marketing; (3) the coordination of secure and authorized access to your property by prospective buyers or their real estate broker; (4) the preparation of legal contracts and disclosures; (5) the art of negotiations; (6) the monitoring of the terms, contingencies and conditions of the contract; and (7) the transfer of funds and legal title through a title company.

For most people, taking on the responsibility of selling their own house by themselves is a daunting task. Only you can decide how much of this process you are willing and comfortable taking on. Most people become overwhelmed and overlook important details. Are you really saving money or simply increasing your legal exposure?

Where Do The Buyers Come From?

A recent National Association of Realtor (NAR) annual survey found that the Internet is the top-ranked source used by buyers in searching for a home.

"Buyers used a variety of resources in searching for a home: 87-percent used the Internet, 85-percent used a real estate agent, 62-percent responded to yard signs, 48-percent attended open houses and 47-percent looked at print or newspaper ads. Fewer buyers rely on a home book or magazine, home builders, television, billboards and relocation companies. Buyers most commonly start their search process online and then contact a real estate agent."

The Multiple Listing Service (MLS) is the primary Internet source of information for residential properties for sale. The MLS is maintained by the many local area realtor associations through-out the country. The #-1 ranked residential real estate Internet web site is realtor.com which is maintained by the National Association of Realtors. Other top-ranked residential real estate web sites source their information from the MLS. Only a licensed real estate agent can enter a property into the MLS.

Where Does The Seller´s Real Estate Commission Go?

In entering a listing agreement with a licensed real estate broker, the seller agrees to pay a real estate commission. The sharing of this commission is further identified within the listing agreement as to which portion is retained by the listing agent and which portion will be paid to the licensed real estate agent that procures the buyer. The portion that is offered the realtor that procures the buyer is disclosed in the MLS that is accessed by realtors working with buyer clients. This "co-broke" commission as it is commonly referred to, is generally in the range of 2.5% to 3.0%, roughly one-half of the overall commission.

When you sign-up for a flat rate MLS listing service, you are paying only for the inclusion of your property on the MLS. If you want to encourage realtors to show your property to their buyer clients, you will still need to offer them a co-broke commission in the 2.5% to 3.0% range to be competitive with other sellers. The companies that offer flat rate MLS listing services do not overly describe this fact. They would like you to think that you need only pay their advertised flat rate fee to successfully sell your property. If a buyer represents themselves in the purchase of your property and is not assisted by a licensed real estate broker, then you need not pay the co-broke portion of the real estate commission. This is true with regards to both a traditional listing arrangement and a flat fee MLS listing arrangement.

In Colorado, if the buyer requests the listing agent to represent them, the seller must agree beforehand. If the seller does agree, the listing agent will then change their relationship to that of a transaction broker with regards to both the seller and the buyer. In many instances, the buyer requests that the listing broker assist them. Personally in this situation, I offer the seller a reduction in my co-broke commission if I represent the buyer. This reduces the overall real estate commission to my seller when compared to having the buyer select another real estate agent which obligates the seller to pay the full co-broke commission.

How Do You Attract Buyers To Your Property?

Based on how buyers go about searching for their homes, you need to do two things to maximize the potential to sell your property. Your property needs to be listed in the MLS since 87% of buyers use the Internet, and you need to offer buyer brokers a competitive commission since 85% of buyers use a real estate agent in the purchase of their home.

What Are The Savings & Costs Of Using A Flat Fee MLS Listing Service?

Flat fee MLS listing companies are notorious for their "ala carte" approach of charging for add-on services such as Internet marketing photos, yard signs, digital marketing flyers, flyer boxes, lock boxes, Internet distribution, and the menu goes on. Before long, the cost has doubled, tripled or more. The flat fee MLS listing service cost savings has significantly eroded. Beyond the out-of-pocket expenses, you must consider what remains for you to do. You are still left to assess your local real estate market in setting a listing price, handle your own showing appointments, prepare your own legal paperwork, negotiate yourself, monitor the terms of an accepted contract, and more.

Let´s consider what would seem like a simple task of handling your own showing appointments. When a prospective buyer or buyer´s agent calls you for an appointment, how do you verify that they are who they say they are? How do you safeguard your property against someone acting as a potential buyer with the intent of theft? If you remain present at your property while the potential buyer is viewing your home, your presence is a detriment to a legitimate buyer looking at your home. I know this from experience when I have taken buyers to homes where the owner is present. The buyers feel as if they are being watched, become uncomfortable and quickly move-on. For my listings, a verification process is conducted before access is granted. If a buyer that is unrepresented by a real estate agent is interested in viewing your property, I meet them at your property and I am present during their viewing.

So what is the real cost savings? By way of an example, let´s say that you list your property with a traditional realtor for a 5.9% listing commission with 3.0% of this offered as the co-broke commission to the real estate broker that procures the buyer. To be competitive, you would still offer the 3.0% if you use a flat fee MLS listing service. The cost comparison in my example is between the listing-side of the commission which is 2.9% and the flat MLS listing fee. In both situations, the seller will pay the buyer broker the same co-broke commission.

Real estate listing commissions are negotiable. It may be possible to negotiable below the 5.9% used in my example making the cost comparison to a flat fee MLS listing service even more competitive. If you negotiate the listing side of the commission to 2.0% (5.0% in-total), then the cost comparison would be between the flat MLS listing fee plus add-ons to the 2.0% listing-side of the commission assuming the 3.0% co-broke is the same.

FSBO Facts & Impressions

The recent NAR annual survey found that 13% of all homes sold were without the assistance of a real estate agent. Of these sales, 45% were to buyers that the seller already knew. Removing these known buyers, only about 7% of all homes sold were without the assistance of a real estate agent to parties unknown to the seller. By any measure, this is a small percentage of residential homes sold.

As we know, buyers overwhelmingly use the Internet in finding a home, yet only 25% of "for sale by owner" FSBO-sellers used the Internet in marketing their properties. Internet marketing is particularly important in attracting out-of-town buyers since these buyers are unlikely to drive around a community´s neighborhoods looking for yard signs or attend open houses. Out-of-town buyers are almost certain to have established a relationship with a buyer broker before traveling to look at potential properties to purchase. When out-of-town buyers arrives in-town, in most instances, they have already selected the houses they intend to see during their visit. They are also highly-qualified and probable buyers since they have incurred the expense and time in visiting for the distinct purpose of looking at homes to purchase. Yet, FSBO-sellers have not effectively marketed these buyers. Moreover, if the FSBO has not offered the buyer broker a competitive co-broke, the buyer broker will not be incented to show the FSBO´s property to the out-of-town buyer.

Using a flat fee MLS listing service is most commonly used by FSBOs. Buyers many times view FSBO properties as being distressed or troubled. It has been my experience that FSBO properties tend to be overpriced when compared to the market as FSBO sellers are unrealistic about the value of their property or they have too much debt on the property and "need" to sell it for a higher-price. It seems to me that FSBO properties tend to attract opportunist buyers that intend to make low-ball offers hoping to prey on distressed buyers.

A Sensible & Affordable Alternative

As my father often told me, "You get what you pay for." When using a $199 flat fee listing "service" plus the cost of add-ons, be careful that you don´t get less for your property than you should and take-on unnecessary legal-risks because of your inexperience with the legal aspects of buying and selling real estate. Saving $5,000 in real estate commissions to end-up embroiled in a lawsuit isn´t a good outcome and far more costly in the long-run.

I offer sellers a variety of real estate listing service plans and commission fee options. In designing my listing service offerings, I handle the most important aspects of selling your property regardless of the Service Plan or Fee Option that you select. You will spend more money in listing your property with me compared with a low-cost (low-service) flat fee MLS listing services, but you will maximize the marketing of your property. My goal is the same as yours – to sell your property for the highest price in the shortest amount of time.

My real estate listing options include a Success Fee commission ranging from under 1.0% to 2.50% of the selling price depending on the Service Plan and Fee Option exclusive of the co-broke commission that you decide to offer buyer brokers. My minimum Success Fee is $1,495. There is no ala carte menu, add-ons or hidden fees. My Success Fee is earned and paid only if and when your property is sold pursuant to the terms of our listing agreement. I return phone calls and respond to email messages.

My web site is descriptively named Real Estate Listing Options or RELO for short. To learn more, visit RELO at RealEstateListingOptions.com and complete my online form to get started.