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With Alternative Realty,
home sellers are able to save at least 3% in
traditional real estate commissions. For decades
now the Multiple Listing Service, commonly known as
the MLS, has been responsible for the larger portion
of home sales in America. The MLS is essentially a
member-only database of properties listed by
individual real estate brokerage firms. They
cooperatively work with other licensed brokers in
the system to market properties.
A lot of money is made in real estate
transactions typically by the receipt of a
“commission,” customarily 6-7% from the final price
of a home sale. This commission is typically
divided between a selling and a buying broker. If
the commission is negotiated at 6%, it is equally
divided between the two co-operating brokers after
closing. A $200,000 property will yield as much
$12,000 in real estate commissions.
This fee is usually justifiable as
Realtors® provide not only access to a local MLS
system but also advice and expertise in protecting
both buyers and sellers best interests in a
transaction. While legal counsel is also readily
available when it comes to contract negotiations,
most home sellers elect to use a real estate broker
to handle their marketing and property selling
affairs.
A few years ago, many licensed
real estate brokers and MLS service providers began
to offer a “Flat-Fee” MLS selling module.
Essentially, it does away with the listing agent and
his customary 3% listing fee for representing and
marketing a seller’s property. The seller now has
access to the Multiple Listing Service by virtue of
paying a flat-fee instead of a full 6% commission
and is allowed to carry on the sale of his or her
own home and the option to pay only 3% to an agent
who produces a qualified buyer. |
In spite of many opinions on this
subject, flat-fee MLS services and brokers have
proliferated across the United States and have
developed growing popularity among die-hard for sale
by owners and sellers who simply can’t afford to pay
a full 6% commission off their equity. Since most
homes are sold through the MLS, many FSBOs, jargon
for “for sale by owners” seem to like this new
selling method and are willing to pay flat-fees
ranging from $299 to $899.
The system seems to benefit many agents working with
buyers since they can often pick up an additional
transaction by helping the flat-fee seller purchase
another home, thus creating an additional source of
income. Most home sellers, however, continue to use
the professional services of a real estate agent for
convenience, expertise and advice.
Flat-fee programs not only offer
access to local MLS systems but also to the
high-traffic Realtor®.com site. With 85% of
homebuyers now using the Internet to look for homes,
it makes sense to have as much online exposure as
possible.
In conclusion, flat-fee services
are not a replacement for the services of
traditional real estate agents or legal counsel but
the Internet and providing limited real estate
services has made it possible to change the
one-size-fits-all mentality when it comes to the
typical real estate commission structure.
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