Flat Fee MLS Blog

An article written by Mark S. Nadel, a government attorney, concludes that “residential real estate brokers and salespersons have long quoted their fees as a straight percentage of a home’s sales price. This traditional forumla, however, ill serves the interests of both home buyers and sellers, and is the primary reason why such fees may be inflated by, on average, more than 100 percent or $30 BILLION a year.”

There is intense competition in the real estate industry, but not in terms of price or fees. In his article, Nadel compares the real estate industry’s “flat fee” “take it or leave it” practices to those of the funeral industry, as exposed in the 1963 book “The American Way of Death,” which found that families were regularly ask to pay a single price for a bundle of funeral services, many of which they did not need or want.
Nadel charges that consumers would be substantially better off if residential brokers used fee structures similar to those used by professionals in other advisory/consulting service fields, such as law and accounting.

Nadel’s Cry…Consumers Take Action:

Traditional brokers revenue could be cut by $30 billion dollars per year with price competition. To level the field and insist upon true price competition, consumers should be armed with the following 5 pieces of information.

1. Buyers should receive an estimate of the dollar amount of the fee that their broker expects to receive in a home-sale transaction.

2. Buyers should be told whether their broker’s agent may refuse to inform them about homes that meet their criteria, if those homes are not listed by traditional brokers.

3. Buyers should be advised that fees paid to a buyer’s broker can be treated as part of the sales price for mortgage purposes.

4. Sellers should be informed that many buyers have no broker, that others have brokers who have agreed to receive less than the customary 3 percent buyer broker co-op fee, and that both groups of buyers expect to be able to translate that savings into a price reduction.

5. Sellers should be told whether their listing broker will attempt to limit the distribution of their listing by competing brokers.

In conclusion, the traditional 6 percent rate structure in the real estate industry has serious drawbacks and the structure is not defensible. 6 percent fee’s provide an incentive for a broker to sell quickly because their fee is based on the sales price, rather than on the time, effort and marketing dollars required to sell the home. Buyers and Sellers owe it to themselves to learn all the information before they hire a real estate broker.

Prospective home buyers form an opinion about the home you’re selling in 15 seconds and the clock starts ticking at the curb-even before the home buyers get in the house. 

In this competitive market if you’re not staging your home, you may be at a disadvantage. It is estimated that about one in four homes nationwide are staged. Staging takes some time and money, but it works. Staged homes remain on the market less than half the time that unstaged homes do.

Staging is all about paring away personal decoration. Why? The idea behind staging is to let buyers imagine themselves living in your home. It’s all about them and their taste, not yours. Everything about staging starts from this basic idea.

Here are some tips:

1. Declutter- this is the GOLDEN RULE. Basically, remove two-thirds of the visual knick knacks and arrange the rest in nice little displays.

2. Remove half of the furniture to stage your home, rearrange remaining furniture to highlight the focal point of the room providing an inviting, approachable scene.

3. Be a neat freak-this is important, steam-clean the carpets, paint walls if needed, clean all outdoor decks and patios, super clean the bathrooms, declutter  ruthlessly and add a candle or two.

4. Hide all the collections-this also means all family pictures and religious items, remember, you’re selling your space not your taste.

5. Let some fresh air in before a showing-don’t try to hide odors with potpourri or by baking cookies. Search out the odor and destroy by cleaning or removing the litter box or the dog. Just open the window and hope for a cool breeze.

6. First impression is at the front door-this is where the buyers spend the most time, waiting for the door to be unlocked. Paint the door if needed and make sure the light fixtures are clean and functional. A potted plant by the door adds a nice touch.

7. Next impression, the foyer-this is where you WOW the  home buyers. Make sure your paint and flooring look great, a small table with a lamp and a vase of fresh flowers is a great way to make a good impression with a small budget. Fresh flowers thoughout the house is a must.

7. Make your home current -you want your home to have a  feeling of up to date and maybe a little trendy. Pick up some magazines that focus on the style that’s popular today to get some ideas. Think streamlined and spacious, that’s what’s in today.

8. Let the light in-you want as much light as possible, pull those drapes aside or make it as sheer as possible. You want to hear the buyers say ‘I could live here, it’s nice and bright.’

Now start your decluttering. Be ruthless.

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