For many years, real estate agents offered home sellers one option – the “full service” listing with a commission paid at closing of 6%. “Full service” could mean a professional, well thought out marketing plan coupled with thoughtful, knowledgeable guidance and advice from an experienced agent with the sellers best interest in mind, or it could mean an agent who got their license last week sticking a sign in front of the property, submitting it to the local MLS, and hoping to get lucky. For most home sellers, it was often difficult to know which of these you were getting when you signed the listing agreement. The lack of price competition and choices in services and fees contributed to the low public perception of the real estate community – perennially ranking it at or near the bottom of trusted occupations.
The real estate industry has proven to be more resistant to change brought upon by the internet and other new technologies than many other industries, but a combination of factors have converged to bring consumers a wider range of choices when it comes to real estate services and fees, and this is a trend likely to continue. These are some current options available to home sellers wanting to list their homes for sale with a real estate agent:
Entry only – agent lists your property on MLS. You do everything else (stage, photograph, advertise, show, answer questions, negotiate, renegotiate, etc., etc.). Up front fees from $200 (basically data entry only, you provide info to agent who inputs into MLS) to $500 or more (agent will come out to gather and verify info to put on MLS). Gives you exposure and ability to offer compensation to local agents through MLS and exposure to potential buyers through agent/broker web sites using MLS IDX feed, as well as Realtor.com, Trulia, Zillow, Yahoo, Google, etc. through syndication from MLS.
Flat Fee – listing services offered in pre defined packages or a la carte for set prices, payment can be all or part up front and/or at closing. Widely varying prices. Can find what seem like exceptional deals ($1000 or less for a “full service” listing), but need to be aware that some agents will treat these as a loss leader to use as a lead generator for buyers to represent in buying other houses and, as such, it is not necessarily in that agent’s best interest to see your house sell.
% Commission paid at closing – agent receives % of the sales price paid at closing. Total commission varies depending on services and price of property. Can get essential services around 1%, for 3% in a high price range may include staging, cleaning, home inspection, premium advertising, professional photography, catered open houses, etc. Can also be used as buyer lead generator, but since the agent is only paid at closing, the agent’s incentive is to sell the listed property.
The real estate industry is starting to catch on to the fact that all properties and property sellers are different and may require different levels of services and fees. While the traditional 6% paid at closing commission is still very popular among both agents and consumers, both groups are finding advantages in having a broader range of choices than one size fits all..