Home Sale Via Fixed Fee Real Estate Broker?

[Ian S]

We have purchased a new home and now need to sell our existing one. The flat fee type brokers seem to be a way to save on commissions. Looking at one local agent of this type (Flatfeegroup), they seem to offer a lot for a fee of $995. Of course, you still would pay a buyer's broker the customary 3%. Nice thing is if you sell it on your own, you save that commission too.

Our home is in a small patio home development that over the past year has seen turnover as older folks move into assisted care or downsize. There is one flipped and renovated home on the market at present. Ours would be the last of the units needing updating throughout coming on the market any time in the near future and would be priced appropriately. With the recent sales in the complex and others nearby, comps should be straightforward. I already have an offer from Zillow (pending inspection) so have an idea of a lower bound on price. I really don't see what going with a conventional broker would gain me when the flat fee guy would offer the following:

• Up to One Year, cancel anytime
• Local MLS Listing with up to 25 photos
• Post & Sign Installed
• All Contracts From List to Sale
• Make up to 7 Changes
• Zillow, Trulia & 400 More
• MLS box *Where Available*
• Email & Phone Support
• Comps and full Market Overview
• Full Offer Review w/ Seller
• Broker Negotiates All Offers
• Assistance with Escrow Docs
• Video Upload Possible
• Flyer pdf available no charge - Request
• Settlement Statement Full Review
• MLS Agent Activity Reports
• 3rd Party Listing Reports Included
• MLS Portal Included

Curious if others have had experience going this route.

 

[Big_Hitter]

you get what you pay for....

 

[Ian S]

you get what you pay for....

Pithy but I guess I'm more interested in what more specifically I'd be getting with the services of a conventional seller's broker.

 

[brucethebroker]

As a "conventional sellers broker", it would appear that most of your needs/boxes are checked. You might want to know how many sales this person has assisted on, and how long in the business. And make sure they are LOCAL to your area-not in practice 40 miles away.

In our area, many of those type brokers have gone under. Believe it or not, $995 is not enough money to fully cover your brokers expenses-but that isn't your problem (unless they drop out of business during your listing time frame). Good luck.

 

[Fishingmn]

The biggest 2 things I can think of (I'm a Realtor) -

- Staging advice. I hire a home decorating professional at my expense to provide staging advice. Think of it like a mini-HGTV session.

- Professional photos. The vast majority of buyers use the internet to evaluate and choose homes to see. High quality photo's are critical. Many agents use their cell phone or digital camera. Good photos require wide angle lenses, tripods, light meters and a knowledge of composition. They also typically include touch up after being shot.

 

[Scrapr]

Full service broker will put up professional pictures. Ours did video on 2 floors. Since they are local they will walk your property & get a sense for the neighborhood. They will host a brokers open so that brokers in the office see/touch/feel your property. Ours attended every inspection & repair. Buyers agent did not. Buyers agent was full service as well. Other broker failed to notice the furnace & roof were 23 years old. I would imagine the flat fee broker won't notice that either. Our broker really was part psychologist. I am in construction & around closings all the time. Nearly 30 years. I'm not proud to say i was a wreck. It was an important deal for us. We ended up selling in 2 weeks. I would have been on strong meds if it was 3 months

You do you though

 

[tb001]

Scrapr’s comments about a good agent being part therapist ring true for us. We recently went through the process of selling and buying at the same time. We were in a sellers market and the thought of paying an agent the commission we paid was honestly tough to swallow, but she was absolutely fantastic at getting a what ended up being very difficult transaction done. Without her guidance we almost certainly would have made price concessions that were on the level of her commission.

On our purchase, the sellers used a low fee agent. Their house had been on the market for three years, the last year or so with that agent. I can honestly say that if we hadn’t been under the gun to find a place, we would have walked away from the deal due to his unprofessionalism. He introduced a LOT of drama into what was already a stressful transaction. Our buyers agent did a reasonable job of managing him, but it was a horrible experience dealing with him.

Both our agents talked us off a ledge several times during the transaction.

 

[travelover]

you get what you pay for....

This is not true nor helpful, in my own experience, with real estate agents or practically anything else. It is an easy justification for overpaying.

 

[brucethebroker]

+1 to the professional photos-forgot to mention that on my reply. Ask your discount broker for a lead on a home photographer. In our area, 20-30 inside & outside photos run around $150 and turnaround is a couple of days after he takes the photos. If you don't think this is important, you are not paying attention to listings of other homes-the difference is breathtaking between the pro and iphone type amateur photos.

Our guy offers video tours in addition to regular photos. Personally, I am not a fan. 20 or so well taken photos should get the job done without spending the extra $.

 

[2018]

Speaking from experience of doing regular & flat fee with almost a dozen properties in 10 years I would encourage you to also explore option 3 if available in your area. There are numerous companies out there now who will make an offer on your property and allow flexible closing schedules. (Open Door, Zillow, OfferPad, etc.)



I would only suggest the flat fee / discount broker option if you have recent prior experience selling other properties. If you haven't bought / sold recently there are a lot of rule changes since the Recession and most discount brokers I have dealt with don't hold your hand to ensure everything is explained and completed correctly. This can cause delays, lose contracts, cost you $.


Yep, full service realtors can get a hefty fee but sometimes it's worth it. We built our retirement home and then sold our other home. For every month it was on the market I figured it cost us $1500/mo and if you go into winter months you just added 6 mo to your holding cost as most home sales occur in spring-summer when families can move easier.
Disclosure: I am not a realtor, but an active RE investor. We used a discount broker to sell our last personal home and it was completely updated (think HGTV) prior to placing on the market.

 

[craigbro63]

I sold my first flat fee property a couple of years ago and the experience was great. The agent that listed it was very helpful through the entire process offering advise, forms, consultations, etc. I also agree with the professional pictures but there are so may photography hobbyists that do outstanding work so check your friends list. I offered 3% to the buyers agent right off the bat because I was looking to move the property quickly (and did in only one week!) but it was suggested to offer less to start out with if I had the time and patience. Obviously experiences may vary but the money that I saved was worth the extra effort for me.

 

[Buckeye]

We used a flat fee broker to sell our home in rural Ohio in 2009 and it took us 30 days. We actually paid for a professional appraisal prior to putting the home on the market. I think it was about $400 and it was money well-spent. You don't have show it to anyone, but it gives you an idea of what the purchaser will see as valuation when they attempt to get financing.

 

[Big_Hitter]

This is not true nor helpful, in my own experience, with real estate agents or practically anything else. It is an easy justification for overpaying.

it certainly is if you are selling a high-dollar house

not a transaction on which I would like to get shortknocked, which is what would happen for paying $1K to basically just get the house on mls; what a rip.

is the fixed fee broker going to ACTIVELY look for buyers or otherwise proactively market the property? (no)

 

[Tiger8693]

Sold a home for $350k in 1 week. I am not convinced that the "extras" provided by a full service broker had anything to do with that as it had barely made it to the market.

I would have loved to have paid $995 and had the potential of even a couple thousand "learning mistakes", rather than the 6%, $21k the professional guy walked away with after 1 week.

Then again, maybe I need to consider a career path?

 

[Big_Hitter]

I would only suggest the flat fee / discount broker option if you have recent prior experience selling other properties.

+1

 

[Big_Hitter]

Then again, maybe I need to consider a career path?

they are rolling in the dough right now, but there are few barriers to entry in that profession and it's very stressful - basically commissioned sales

 

[Scrapr]

Sold a home for $350k in 1 week. I am not convinced that the "extras" provided by a full service broker had anything to do with that as it had barely made it to the market.

I would have loved to have paid $995 and had the potential of even a couple thousand "learning mistakes", rather than the 6%, $21k the professional guy walked away with after 1 week.

Then again, maybe I need to consider a career path?

Then again it wasn't 1 week to close. My brother sold his $750k home. Couple weeks before closing buyers wanted out. Kill the deal. His agent put everything back together. There are inspections. Then the negotiations over repairs. Our buyer went to Hawaii while this was going on. Then he broke his leg & couldn't fly. I'm thinking that's OK, just sign & Fedex overnight. Title company Fedex account was hacked. The doc got "stuck" in Fedex system. No visibility as to where it was.

Agent got our title fees rebated. Things happen out of the blue in home sales. For us I'm glad we had some help

 

[Big_Hitter]

Things happen out of the blue in home sales. For us I'm glad we had some help

no doubt - something I wouldn't want to scrimp on to save a few bucks; a screw-up or omission could easily end up costing tens of thousands

 

[Tiger8693]

MLS/Realtor have done a great marketing job convincing everyone of the difficulty and "trials and tribulation". You have to have a real estate attorney, but even that cost is minimal compared to the Realtor.

Sorry, I'm not convinced. I will go the Fixed Fee route next. Tome, it is akin to another "Broker" fee that was so marketed not so long ago....

 

[akck]

My son sold a house using a fixed rate broker about 2 years ago. He needed to stay on top of everything, calling the broker many time to make sure the broker completed the tasks they were obligated to do. He had direct dealings with the buyer agents to make sure things didn’t fall through the cracks. In the end, the house sold quickly and he did save on some fees. So if you have the time to hound your broker to do what they agreed on, it is a way to save some money.

 

[Big_Hitter]

My son sold a house using a fixed rate broker about 2 years ago. He needed to stay on top of everything, calling the broker many time to make sure the broker completed the tasks they were obligated to do. He had direct dealings with the buyer agents to make sure things didn’t fall through the cracks. In the end, the house sold quickly and he did save on some fees. So if you have the time to hound your broker to do what they agreed on, it is a way to save some money.

once they are paid the $995, or whatever, what incentive do they have to put in the time to sell the home?

 

[Fishingmn]

Full service agents fees are negotiable too.

I'm a Realtor and would never charge 6%. My normal commission rate is 4.7% which is 2% for me/broker and 2.7% to buyer's agent (the going rate in Twin Cities). I also never charge the extra $500 Broker Admin Fee that many add. This includes professional staging and professional photography.

I'm into FIRE - can't really justify others paying more when I'm so concerned about saving money too.

 

[Lakedog]

Full service agents fees are negotiable too.

+1
Just recently sold a river access attached home in TN where the agent took the listing for a flat $5000 (worked out to only around 2% of sales price). I had a contract in 8 days, and as it turned out she was the only agent involved so did not have to share the lower commission. I have also sold a couple of FL condos with full service agents at 4%.

 

[Tiger8693]

+1
Just recently sold a river access attached home in TN where the agent took the listing for a flat $5000 (worked out to only around 2% of sales price)..

That essentially is a "flat fee broker".

As the old saying goes "we determined what you are, now we're just haggling over the price!"

 

[Lakedog]

That essentially is a "flat fee broker".

As the old saying goes "we determined what you are, now we're just haggling over the price!"

She was actually a typical full service agent who asked 5-6% for listings. She did my sale this way only because she was selling new units for the developer and had lots of folks looking for a property in this particular development.