8 Facts Denver Sellers Need to Know About Flat Fee MLS Listings
Originally posted on http://blog.bluematch.com/8-facts-denver-sellers-need-know-flat-fee-mls-listings/
Everything you’ve heard about selling a house in Denver is wrong. For example:
- You should always hire a Realtor
- Price your house any way you want
- Never sell FSBO for the best money
- The market is hot enough to skip the MLS
The residential market in Denver shows conflicting conditions. Inventory is low by historical standards. However, prices are not rising as fast as they did a year ago.
Agent commissions are costly. Selling your house on your own can mean leaving plenty of money on the table. Read on to learn more about how a flat fee MLS listing can save you real money.
The Cost of Selling Your Home Doesn’t Have to Be 3%
You can save the commission on the sale of your home by taking on tasks associated with selling your home. There is no law in Colorado restricting real estate transactions or the MLS to Realtors.
Anyone who passes the exam is a real estate agent. But only certain agents may call themselves Realtors. A real estate agent and a Realtor are both licensed professionals in Denver. Realtors belong to the National Association of Realtors.
Most Real Estate Agents Work for Commission
In Denver, the going rate is around 3% of the sales price to the agent listing the house plus 3% to the agent who brings the buyer. You expect a listing agent to:
- Provide expert advice and market research about the home price
- Prepare and distribute market marketing materials to buyers agents
- Place a sign on your home
- List the property for sale with the correct local MLS (Metro Denver)
- Schedule showings with buyers and buyers agents
- Present and explain offers from buyer and buyers agents
- Assist in negotiations such as counter-offers and offer acceptance
If you take on all of these duties, you can save the commission. That can add up to thousands of dollars, especially since the median sold price for a single-family home in Denver is now $452,000.
FSBO Stands for For Sale By Owner
It means that you do all the research to determine a home’s property value. Then you find a buyer and place the house under contract. It sounds simple, but in a changing market like Denver, you may find the process of setting your asking price daunting.
Undervalue your home and you leave thousands of dollars on the table. List your property too high and you will be on the market forever. Finding a buyer is another challenge.
Without marketing and an MLS listing, how will buyers find your house? Buyers now find their homes online or through the MLS. Driving through Cherry Creek looking for signs on Sunday afternoon is no longer the preferred home search method.
As an FSBO seller, you are fully responsible for accurate home descriptions, showing the house, etc. In Colorado, all the necessary forms for disclosure and notifications are available online. You should consult with an attorney if you are unfamiliar with the process.
Sites like Zillow, Realtor.com, and others depend on listing from the MLS to populate their web pages. MLS listings are limited to licensed real estate agents in Colorado. Other areas restrict their MLS to Realtors only.
Flat Fee MLS Lets You Onto the Agent Platform
Use an agent’s most effective marketing tool for a better outcome. Instead of 3% to a listing agent, you pay only a flat fee and gain maximum exposure to active buyers and buyers agents. That saves you $13,560 of the commission on a median-priced Denver home.
Only licensed brokers may list on the MLS (Multiple Listing Service.) It is the local database of available homes for sale. It also contains information available only to subscribers, like historical sales, days on market and more.
Listing on the MLS lists your home on hundreds of real estate websites. A “full-service” realtor writes your listing, helps you set your price, etc. The question is whether that service has earned the $10,000 or more paycheck.
With a Flat Fee MLS listing, a licensed real estate broker provides data entry service. They list your home and that’s it. Instead of a broker telephone number, they list your personal contact information. You will still need to pay a commission to the buyer’s agent.
You Pay for Service as You Go–No Extras
Some services cost as little as $299 to $399. However, photographs may be limited or the listing restricted in some way. Flat fee listings tend to be “ala carte” and each task is priced individually.
This is no problem if you plan on doing all of your work. However, fees for additional photographs, price changes, listing open houses, telephone forwarding, etc. can add up.
Entry-Only Service Means You Are In Charge
When you pay for “entry-only” listing service, your name and contact information are listed. That means that if anything is wrong with your listing, you face a fine from the MLS if it is not corrected promptly.
Since you depend on your listing service to access the MLS, look at their customer service reputation.
Pick the right flat fee MLS listing service the same way you would select a full-service brokerage. Look for:
- Experience- Are the cooperating agents experienced?
- Volume: How many transactions do they close per week?
- Networking: Are the cooperating agents local?
- Negotiation and extras: Do they offer any extras?
- Customer Service: Is help available and prompt?
A flat fee MLS listing service matches you with a cooperating agent. The agent is then responsible for entering your information into the correct MLS. There are several MLS in Colorado. If a service matches you with someone in Colorado Springs, buyers in Denver may not see your listing.
Keep abreast of any status changes and make sure your cooperating agent updates your MLS listing promptly.
You Drive Marketing
Photos and description make your MLS entry interesting to prospective buyers. Your MLS dictates the number of photos required or allowed. Your description also has a character limit.
Take Your Own Photos
You don’t necessarily need a pricey professional photographer. Look for a clear, well-lit photo of each room and exterior photos including yards, pools or other features. Photos are a key part of marketing your home.
Perform a walkthrough of your home and remove clutter, clean surfaces until they gleam and turn on every light. Remove overly personal items from the photo. Take photos that highlight the key features of your home.
Dark, out of focus or poorly framed shots make your home look like there is something wrong. Use a good camera and professional lighting equipment, if needed.
Write Your Description
The right photographs bring people to your listing. make your listing shine, too. Describe your home in descriptions of benefits instead of features. A pantry is a feature. “Plenty of room for an upright deep freeze and a month’s canned goods supply” describes a benefit.
Be specific, truthful and positive. Feature the new roof, brand name appliances, or double-paned windows. Avoid words that signal bargain hunters, like “repairs” or “motivated seller”.
You Set Your Price With Your Own Research
There are two prices. Your asking price is one, the market price is the other. The market price is what a buyer is willing to pay for your home. Set your asking price too high and your listing languishes on the market until you lower your expectations.
Set your listing price too low and even a full price offer may fail to meet market expectations.
Act Like an Agent
To make an educated guess on price, an experienced agent looks at “comps”. Comps are other recently sold homes with the same characteristics as your home.
Condition, age, quality of construction, etc. make a difference. Look closely at comp homes. It’s easy to compare houses from like neighborhoods, but Speer and Cherry Creek are completely different, even if they are separated by just a short distance.
Use All the Info
After you get comparable selling prices for the last six months in your area, it’s time for some number crunching. Add and subtract features to get a reasonable price range. For example, the number of bedrooms affects value.
If comps show 3 bedroom houses are selling and you only have two, then you adjust downwards by the market value of a bedroom. The number of bathrooms works the same way. Special features such as a double lot, a swimming pool or a superior school district can make a difference.
Once you have all the information you need, list the home for what you want. Don’t try to list below market value to create a bidding war. What happens if the only offer is below market rate?
You Show Your House and Close the Sale
With some luck and the right price, you should see plenty of interest in your listing. Inquiries come straight to you, so it is up to you to provide information, vet the prospective buyers and show the house.
Be Ready to Show and Sell
To help your home look its best, start with curb appeal. Clean and declutter the front walk and entryway. Spruce up the landscaping.
Clean and declutter inside, too. Small touches like new cabinet hardware and fresh paint make a difference too.
Be Careful with Strangers Entering Your Home
For your safety, remove or lock up private materials and valuables from your home when you show the house. This includes prescription drugs, jewelry or art that is easily carried. Consider letting the buyer’s agent show the house on their own.
Consider how you want to qualify prospective buyers before they enter your home. At an open house, for example, you may have many people visit who have no ability nor intent to buy in your medicine cabinets and closets.
Keep your MLS listing agent aware of any offers or progress that you make. Updates to your listing must be within 24 hours of status change. You are responsible for any fines if you miss a status change.
You will negotiate directly with your buyer’s agent or with the buyer if they have no agent.
An offer contains more than just the price the buyer is willing to pay.
- Length of time the offer is valid
- An amount of money for the seller to consider the offer “earnest money”
- Down payment amount
- Address and legal description of the property
- move out and closing dates
- Items to be included or excluded in the sale, such as carpeting, draperies, fixtures, appliances, etc
- Terms for the buyer’s final walk-through
- Terms for an inspection clause
- Assurance for a clear title to the property
- Escrow instructions
- Liquidated damage or payment for use and occupancy of the property if you do not leave by the agreed-upon date
- Terms for paying expenses such as utilities, property taxes, and homeowners’ association fees through the closing date (usually the seller)
- Any contingencies
The offer documents should be reviewed by an attorney or licensed professional. If you wish to counteroffer, you may download all the required disclosures and contract templates from the internet. Some flat fee MLS listing services offer this kind of assistance for an additional fee.
With an offer to purchase in hand, you can propose a counteroffer. This can go several rounds. Negotiations often happen over the telephone or fax. After a few phone calls back-and-forth to your real estate agent and potential buyer, you may move on to the closing on your property.
Contract Paperwork and Work With Title
FSBO also means that you prepare all of the documents. You are solely responsible for the quality and accuracy of all the information. You will select a title company, who will provide the deed transfer.
These functions are priced individually by most flat fee MLS listing services.
There’s an Alternative to Flat Fee MLS and Full-Commission
Somewhere between the bare-bones flat fee MLS listing and an expensive full-service listing, there is another type of non-traditional brokerage service to consider. For a flat fee instead of commission, you can have your MLS listing, help with showing requests, have all of your documents prepared and checked for legal compliance.
The commission-free real estate brokerage is not a new model for Denver. Imagine paying 1/3 (or less!) than the commission on an average home.
Leverage data and technology to reduce the cost of selling your property. Ready to start your listing with all the services you need and none of the excessive fees?
Contact us today!