Real Estate

Lower your Listing/Selling Fees - Use Flat Rate MLS

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Deal Addict
Feb 5, 2010
2764 posts
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rkanwar109 wrote:
Jan 28th, 2015 10:22 am
Love your site. Soon there will be no need for agents at all as buyers can just go straight to the seller.
True from one point of view. But DIY can't always apply for everyone and researching /googling on the web can only take you so far right. There will always be situational variables, follow-up questions, leveraging from one's experience, unlisted opportunites etc.

Technically, anything can be DIY. Taxes, Accounting, Selling/Buying a Home, Plumbing, Remodelling your Home, Investing etc.

Question is, can a person on their own deliver better then someone else whom provides the paid service?

I'd say in many cases no. People get stuck, too much time, don't want to make costly mistakes, or will have questions.
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Apr 16, 2011
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Toronto
A smart diy will have a real estate lawyer on board to ensure the agreement is drawn up correctly. The FSBO approach is not for everyone, as some buyers/sellers will see value in the traditional full service realtor. The point is the market has provided more options for them with the flat fee MLS service.
Penalty Box
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Apr 21, 2004
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Someone on Kijiji advertised flat fee mls listing for just $99 for 3 months. Does this sound too good to be true?
Penalty Box
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Aug 19, 2008
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alanbrenton wrote:
Jan 28th, 2015 11:58 am
Someone on Kijiji advertised flat fee mls listing for just $99 for 3 months. Does this sound too good to be true?

Yes, that's a scam. DO NOT get duped into making any upfront payments.

Real estate has always - - and should always - - be about paying for performance.

Tell him you'll pay the $99 only after if he can manage to make the sale.
[OP]
Deal Guru
Aug 2, 2010
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So, I met with a long-time friend last night who is a real estate agent but is winding down working as one and has 'sold' a lot of his book to a young agent. He is retiring shortly. Given that I thought he might be amenable to chatting about my marketing plan (I've resisted talking to him before as many agents are quite touchy about this topic and he has always wanted to list for me) and giving me some of the 'inside scoop' on listing.

I went over my plan with him and asked him what this mysterious 'marketing plan' is that all agents talk about but cannot explain at all. His reply? "Because it's bullcrap! What you outlined [which you can see in my first post on here] IS the plan.". Indeed, I already know that as no one on here, even real estate agents, has been able to add anything to it. Then I mentioned there is this real estate agent on RFD who keeps saying he won't answer any questions about what else is in his marketing plan other than that which I have enumerated because he "doesn't give free advice". To that my friend couldn't stop laughing.

He said the following:

1. Open houses are pretty well useless and mainly for the agent to market themselves. The potential listing agent, if he has a buyer, will provide a buyer regardless of whether they end up listing the house or not. He said these days with the Internet it almost never happens that someone buys a house without an agent because they just happened to be driving around and saw it. He said that anyone in the market for a house would have found it on an MLS search anyway or through their agent, whether or not they saw it at an open house first.

2. Listing commissions are going way down. He is with a large well-known firm and their standard listing fee is now 1% and he said there is even pressure on that. He says people are becoming wise to what listing a house involves;

3. He agreed with me that one should keep the buyers' agent commission at 2.5% because they have to have a carrot. He said that he himself has witnessed other agents not showing homes that have lower commissions. He said he himself couldn't do it because it is unethical but some agents only care about their own commission and will do anything to get it and make it as high as possible;

4. He agreed that the most important driver for agents is to 'make the sale' and move on. Trying to get a higher price as a listing agent or find a more suitable home if the buyers appears like he may be ready to buy what he has already looked at is, although good for the buyer, counterproductive for the agent.

5. He said there is no magic to the negotiation process but that many people want their hand held and it's scary for some to negotiate such a large sale. He said the process is simple. You accept the offers at a certain time and date, then you just decide which ones to work with (the ones that look the best) and sign them back. As for dealing with the conditions he said these days sometimes you don't even see conditional on inspection any more or even conditional on financing as so many are pre-approved. He said that the closing date might not be what you want so change it and maybe the deposit might not be enough so increase it. He said having the home inspection already done (copies on the kitchen table from a reputable company during showings) is an advantage because even if the buyer's might want to still have one done at least they can see you are not trying to hide anything. He said just make sure you have whatever you want excluded that might be affixed to the home excluded in the contract (you know, that lovely chandelier that you want to install in your next home, etc). He said it's all not rocket science and the forms are standard.

6. He said that bogus offers are a real problem as there are unscrupulous agents out there. He's glad the new legislation requiring registration is coming in this year.

7. He said he has no problem with consumers having access to the MLS historical comparables data because they give it out freely anyway. He said that, just like now, consumers may need agents to intepret the data for them. He said he didn't understand what all the fuss was about. As for MLS creating the database in the first place and paying for it he said that was done so agents could market homes. The sales data being included was just a tiny part of it that takes one second to insert and the database had to be created regardless of the sales data or not as it was required to market the homes in the first place.

8. He confirmed that the work is the same as it was 9 years ago, if not less because of technology, and he does have a lot of pressure to lower commissions as people realize prices have increased 100% since then yet the % commission paid is still on the selling price. Again, he laughed when I mentioned that some agents claim it's more work now.

9. He said he knows agents who are now doing MLS listings, brochure, agents open house, etc for free as long as you agree to use them as your buyer's agent on the home you are buying.

10. He said there are too many agents out there and the problem is there has been no drop in the market to cull them. It's been a 20-year rise in prices that has had people flocking to the industry and there has been no downturn in a long term that results in many leaving. He said that he wishes they would set the bar higher on becoming an agent but doesn't think that will ever happen as it will reduce the revenue the industry gets from the fees required to stay as an agent.

11. He said buyers' agents couldn't care less who you list with as it makes no difference to them as it does not affect their commission one bit.

All of this is just common sense but it's nice to have it confirmed yet again by a real live working real estate agent with years in the biz.

Finally he said he had no problem with my proposal which I am presenting to the government to have commission based on the difference between the selling and listing price (proposal is here: proposed-change-act-governing-real-esta ... n-1711857/), not on the entire listing price (with or without a flat fee in addition). He said agents and clients should be able to decide on any commission they want and could not understand why any agent would be against freedom of choice, ie no one is getting forced into anything. He thought that my idea of capping that commission at 2.5% was an absolutely brilliant simple method of avoiding unscrupulous agents convincing clients to underlist homes and at a higher commission rate such that they'd pay more than under the standard 2.5% of listing price.

He really liked that my proposal is so simple and acknowledged that no one ever chooses the current option of declining commission at varying percentages (a complicated calculation) that is in the Act now because it is a disincentive. He couldn't even believe that commission structure was in the Act. He said "which client would choose to pay an agent a lower % the more he received for his house?" and said that my proposal which achieves the opposite would be a real incentive, although he'd rather get paid his 2.5% on the entire price of the house of course and who wouldn't. He marvelled at how incredibly simple and uncomplicated my incentive-based commission proposal was and that all you had to do was multiply 2 numbers together just like now. He said even a 10-year old could understand it and calculate it and laughed again.
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Apr 20, 2011
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Every agent has their own style of marketing plan. Rudeness and obscenities "bullcrap" won't change anything. Some like the internet, some prefer face to face, some don't answer their phone, some answer 24/7. Some like open houses, some do not. There are dozens of factors involved a marketing plan.

Real Estate commissions are not going down. Individual brokerages such as one percent realty chose to offer 1% rate, which is their right to do. All real estate boards in Canada say correctly that commissions are not set, and can be as high or as low as an agent agrees to with his or her customer. There is no need for dismantling existing consumer protection law to bring in a highly complex tiered commission system.

The labour involved is more than years ago. More showings, more driving, higher fuel costs, and the like. Websites, SEO, data feeds from the board, all add up. There are additional fees and things as well. Some brokers in Vancouver(and likely Toronto as well) even charge you for technology per month even when you don't use their office resources.

Some agents will say you shouldkeep the buyers comission at the normal rate in the hopes you won't list with a discount broker and say that realtors won't show your listings. However, the majority of one percent realty's customers are from other brokers.
[OP]
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Aug 2, 2010
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FYI, I have added some new interesting points to my original post! Enjoy!
Deal Addict
Jul 6, 2005
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Great job eonibm!

I've been on the fence of using a realtor to sell my home.... but my wife totally fell for the whole "marketing plan" promo put on by one realtor we sat down with. I think the hardest part will be to convince her NOT to use a realtor, rather than selling.

One extra thing you may want to add to your original post, are the newest batch of buying agents that actually offer 1% rebates to the buyer! I've recently discovered this, and totally plan on finding an agent that offers this.
[OP]
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Aug 2, 2010
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Repooc wrote:
Apr 23rd, 2015 3:55 pm
Great job eonibm!

I've been on the fence of using a realtor to sell my home.... but my wife totally fell for the whole "marketing plan" promo put on by one realtor we sat down with. I think the hardest part will be to convince her NOT to use a realtor, rather than selling.

One extra thing you may want to add to your original post, are the newest batch of buying agents that actually offer 1% rebates to the buyer! I've recently discovered this, and totally plan on finding an agent that offers this.
Thank you. You might want to ask your wife what in the 'marketing plan' the agent has is not in the marketing plan in my first post because I sure would like to know too. There is nothing else. I know that FOR SURE now. I am sure she was just 'impressed' by him and his pretty little brochure, suit, looks, and how successful he is and it was not that there was anything really that she can point to that is not in my marketing plan. However, if she wants to use him because she thinks it's worth paying 2.5% because he is 'impressive' that's her and your business and your money. After the staging, brochure, MLS listing and all the smaller points I mentioned in my first post which all sellers should do (and if the agent doesn't recommend it go find another one!) it is the house and the price that results it being sold, not anything the agent does. They don't go door to door or call every agent in town asking people to buy the house. MLS takes care of that, not to mention it would take years . Once it is on MLS the buyers and their agents start poking around. That's what sells the house, not the agent going door-to-door or calling every agent in the city, lol. They don't do that. We've had the wool pulled over our eyes too long. However, if I am mistaken please post here or send me a PM and I will add it to my original post, thanks.

Agents who offer rebates or lower rates or fixed + lower % or fixed + lower % + rebate, etc are nothing new actually. I am not sure what the difference is between offering a rebate and just lowering the commission. I know a top agent who did mostly homes in Rosedale, Toronto that would list for 1.5% 10 years ago. What is the difference between charing 1.5% and charging 2.5% and offering a 1% rebate as 2.5% with a 1% rebate = 1.5%?

My original post is how to lower your real estate transaction fees by not paying a % at all, but at most a flat rate listing fee for the MLS listing.

Soon, if my proposal is accepted by the government, the simple commission structure of paying a % of the selling price over listing will become a reality. You can read about it here: proposed-change-act-governing-real-esta ... 1711857/3/
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Apr 20, 2011
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Repooc wrote:
Apr 23rd, 2015 3:55 pm
Great job eonibm!

I've been on the fence of using a realtor to sell my home.... but my wife totally fell for the whole "marketing plan" promo put on by one realtor we sat down with. I think the hardest part will be to convince her NOT to use a realtor, rather than selling.

One extra thing you may want to add to your original post, are the newest batch of buying agents that actually offer 1% rebates to the buyer! I've recently discovered this, and totally plan on finding an agent that offers this.
You're better off using a company such as one percent realty. If you sell your home by yourself, an intelligent buyer will realize you're saving several thousands of dollars and will try to bargain it out of you.

Hopefully such agent offering money or rebates in such a manner discloses it to the seller otherwise (in BC) it would be illegal.
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Apr 20, 2011
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eonibm wrote:
Apr 23rd, 2015 4:56 pm
Thank you. You might want to ask your wife what in the 'marketing plan' the agent has is not in the marketing plan in my first post because I sure would like to know too. There is nothing else. I know that FOR SURE now. I am sure she was just 'impressed' by him and his pretty little brochure, suit, looks, and how successful he is and it was not that there was anything really that she can point to that is not in my marketing plan. However, if she wants to use him because she thinks it's worth paying 2.5% because he is 'impressive' that's her and your business and your money. After the staging, brochure, MLS listing and all the smaller points I mentioned in my first post it is house and the price that results it being sold, not anything the agent does. Once it is on MLS the buyers and their agents start poking around. That's what sells the house, not the agent going door-to-door or calling every agent in the city, lol. They don't do that. We've had the wool pulled over our eyes too long. However, if I am mistaken please post here or send me a PM and I will add it to my original post, thanks.

Agents who offer rebates or lower rates or fixed + lower % or fixed + lower % + rebate, etc are nothing new actually. I am not sure what the difference is between offering a rebate and just lowering the commission. I know a top agent who did mostly rosedale homes that would list for 1.5% 10 years ago. What is the difference between charing 1.5% and charging 2.5% and offering a 1% rebate as 2.5% with a 1% rebate = 1.5%?

My original post is how to lower your real estate transaction fees by not paying a % at all, but at most a flat rate listing fee for the MLS listing.
All realtors have their own way of marketing things. Some value fancy ubertor sites, others prefer newspapers, and various other things. Some use staging, some do not. The price is only one of many factors in selling a home. Some agents go door to door, some do not. There are already many brokers that offer discount listings without a complicated tiered structure and there are yet a 3rd type of broker that already offers an MLS listing for just a few hundred dollars.
[OP]
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Aug 2, 2010
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ahmahndoode wrote:
Apr 23rd, 2015 5:58 pm
We offer 50% commission buyer rebates and $199 MLS listing services
Why not just half the commission? Doesn't 50% rebate achieve the same end result?

Of course it makes more sense for clients to just pay the simple commission of a % of what the house sells over listing because one is going to get the listing price anyway, a change which is hopefully going to be coming to the real estate act soon. I know agents don't like that but they don't have to agree to either.

A lower listing commission is a different incentive. It still pays a commission even if the house sells at the price one would have gotten anyway from the mere listing.
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Apr 20, 2011
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ahmahndoode wrote:
Apr 23rd, 2015 5:58 pm
We offer 50% commission buyer rebates and $199 MLS listing services
Your structure is plain and easy to understand, and perfect for that segment of the market that wants a lower commission. It isn't necessary to offer byzantine tiers or any funny stuff. Just a nice low rate.

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