Do Flat Fee MLS Listings Work?

The answer is yes but there are plenty of things a FSBO seller with an MLS listing can do to get their flat fee listing noticed by Realtors® and buyers.

Price is the foremost concern for any flat fee MLS listed seller. Below are my top 5 ways to sell flat fee in the MLS and have more success:

1) Forget about the 2005 bubble spike in prices when setting a listing price in a buyer's market. Where the market has been has no bearing on where it is today. Unfortunately, many homes bought during 2004-2006 are currently in a negative equity position and you might consider a short sale. For those sellers who are not underwater, price your property to the buyers.

2) Use my cash test to set your price when listing flat fee. The cash test uses the advertising concept called ADMA. Attention, Desire, Memory and Action. If you want to get someone's attention, advertise a price that creates action. Selling a home flat fee is not any different than selling a car. Once buyers are in your home, maybe one spouse will become attached and convince the other that your home is perfect (desire & memory). My cash test is: advertise your FSBO-MLS home for the price that you would sell to a cash buyer. Of course add in your buyer's agent commission and closings costs.

3) Do not leave room for negotiations when listing flat fee in the MLS. In 2 above, I did not discuss leaving any room for negotiations because the goal is to get offers. Negotiate possibly 1% off your MLS listed price. This will surprise the buyers and the Realtors® but that's OK. Let them figure out whether or not your flat fee MLS listing is a good value.

4) Consider offering a higher buyer's agent commission. Normally, flat fee sellers and full-service agents co-broke (share commissions) with buyer's agents® at 3%. Be different and offer 4%. Your flat fee listing will stand out. To advertise this higher than normal buyer's agent commission, consider using a flat fee MLS Realtor® eblast program.

5) Lastly, negotiate well. Flat fee sellers typically represent themselves. This is good and bad. The good part is you keep control and save about 3% in commissions. The bad part reminds me of the adage "a lawyer that represents himself has a fool for a client" and can also be applied to for sale by owner sellers. Most flat fee MLS listed sellers are not qualified to negotiate a sales contract, deal with contract repair limits and other contract matters. Often, unrepresented sellers leave money on the table by either negotiating too much or by being too generous when negotiating issues found on an inspection report. A skilled broker or agent would likely do better for the seller. Find a flat fee MLS program that addresses this concern.

Flat fee MLS works if you pay attention to details. The flat fee listing service that you list with can greatly affect your success. Self represented FSBO sellers often leave too much money on the table when negotiating. Pricing your home as if you're negotiating with a cash buyer can be a key in getting more showings and more offers.