Today, if you want to sell your home, you have a number of choices.
Real Estate Agents have always been able to offer Flat Fee Service but what has changed is that now the “listing agent” can input the listing on the MLS® System of the Ottawa Real Estate Board but reduce their services to you!
So what, exactly, does this mean to a seller and what is a flat-fee listing?
A licensed real estate agent is asked to enter a listing under an agreement whereby the sellers act as their own representative. If they find their own buyer, there are no commissions involved. If a buyer comes through their presence on the MLS® System of the Ottawa Real Estate Board, they must pay a commission to the buyer agent only. It sounds great but there are always two sides to every story.
From the seller’s perspective, the downside is as follows:
- The agent is not available to the seller for any assistance
- The seller must handle their own advertising
- The seller must handle their own open houses
- The seller must book and handle all showing requests
- The seller must handle all paperwork, contracts, offers
- The seller must handle their own negotiations
- The seller must handle all inspections (house, septic, well)
- The seller must handle any issues or complications that arise
From the “listing agent” perspective, here is the impact on them:
- Everything the seller does reflects on the Agent since it is the agent whose name is on the listing (poor photos, unanswered phone calls, inflated pricing, offers mishandled with buyer Agents, etc)
- Sellers stop thinking of the Agent who offers flat-fee listings as a full-service real estate agent and, if they decide this system isn’t working for them, tend to jump ship and go with a different full-service agent to get the home sold.
- If potential Buyers aren’t handled well, it’s the listing agent who gets the phone calls and complaints.
- The seller is only selling one home. To create a profitable business from this model, an Agent would have to “list” many, many homes.
- An experienced Agent agonizes while watching a situation “go south” that could have been successfully handled with a full-service agreement
I have actually been involved with a number of these transactions during 2010. From my perspective, as a Buyer’s Agent, here are some comments about my experience:
- Typically, the homes are overpriced and don’t show well. The homes aren’t staged and there has been no advice given on how to show a home at its best.
- The Sellers are not responsive to showing requests. Agents are used to receiving confirmations within an hour or so.
- Sellers typically want to be at home during a showing – this means we are working to their schedule, not to the potential Buyer’s schedule
- Photographs are usually not well done
- Listings usually don’t have virtual tours
- The Sellers don’t understand the Buying process, so the Agent (me) ends up assisting the Sellers (without remuneration) just to ensure that the deal goes through for my Buyer.
- Buyers are very educated in today’s market. When viewing a home becomes difficult, the buyer will typically move on to the next, better priced home.
In summary, a flat-fee listing just might be the right scenario for some of you – but if I were a Seller hoping to save a few dollars when selling my home, I would carefully weigh the cost savings of this approach versus using a “Full-Service Agent” before choosing this option. Most productive agents have invested significantly in providing their clients with the best service and the benefit of their experience when selling their home. If this type of selling appeals to you, I would strongly urge you to contact me to discuss the ‘real’ costs associated with Flat-Fee Selling!