Pros and Cons of Listing on MLS For Sale By Owner
Do you want to get your home listed on MLS as a for sale by owner? One of the questions those who are thinking of selling for sale by owner will ask is whether they can get their home on the Multiple Listing Service (MLS). The answer is yes, you can with flat fee MLS.
It is not unusual at all for someone who wants to sell without a real estate agent to know how to list on MLS for sale by owner.
The MLS is the primary resource for home buyers and sellers looking to buy or sell – the vast majority of homes for sale are listed on the MLS, so it is the go-to place to find a home to buy or to list your home for sale.
The MLS, through a feed, sends all of the listings to the most popular real estate sites where buyers spend hours a day looking at homes. Some of these popular channels include:
- Coldwell Banker
- Keller Williams
- Century 21
But not just anyone can list a home on the MLS. You have to be a real estate agent. The lack of access to the MLS as a marketing channel for home sellers makes selling your own home without a real estate agent quite challenging. That is why many sellers choosing the For Sale By Owner (FSBO) route seek out real estate agents for their help.
You can pay an agent to list your home, which is one of the best ways to get the word out about your listing and ensure you get potential buyers through the door. These types of real estate agents are known as entry only or flat fee MLS.
An entry-only flat fee agent will not provide any service to the seller other than the posting of the listing within the area’s Multiple Listing Service and giving the seller’s contact information to cooperating agents.
It is essential to understand that there are some excellent reasons to hire a real estate agent beyond listing your home on the MLS. While you can potentially keep more of the commission when you sell the home yourself, you are missing out on many services that could help you achieve a sale that would be more satisfactory for you and your goals, like helping you make more off of your home.
Thinking an entry only listing is the way to go could be a significant mistake if you want top dollar for your home. As a consumer, you give up a lot with a flat fee MLS arrangement.
Let’s look at some of the pros and cons of only using a real estate agent just to list your home on the MLS. That way, you can make an informed decision about how you want to move forward with your sale.
Pros of Listing on MLS Without an Agent
There are some benefits to going the FSBO route, especially if you take advantage of a real estate agent to get your home on the MLS. Here are some of them:
1. Potentially save the commission you would pay a sales agent.
This is the #1 reason that homeowners choose FSBO – they want to avoid paying the cost of hiring an agent to represent them in the sale. A sales agent will tend to get about 5-6% of the sales price of the home as commission. However, that percentage can vary depending on the area you are selling, the type of property you are selling, and the personal arrangement you make with the agent that you choose.
However, that does not mean you can totally avoid paying commission. Putting your home on the MLS means you are going to encounter multiple buyer’s agents, which represent buyers interested in your home. If you sell to one of those buyers, you are going to need to pay the commission that they are owed, which is usually half the total of 5-6%. This is known as a cooperation fee.
So, instead of paying a traditional real estate agency a full commission, you’ll only pay half. Many for sale by owners, however, get shortsighted and look to save even more by shortchanging the buyer’s agent side of the commission. Doing so is a SIGNIFICANT mistake!
You want the buyer’s agent to feel great about selling your home – not the exact opposite. Lowering the commission increases the odds you will net less money, NOT more!
2. Get complete control over the sales process.
One common worry among people selling homes is that hiring an agent means that they have to do what the agent says – like the agent may force them to do things that they don’t want to do, such as setting a lower price than they would like for their home, making price reductions or having open houses every weekend.
Reputable agents are not going to force you to do anything that you don’t want to do, but they will try to encourage you to make choices that will facilitate the sale of your home. However, if you don’t have an agent, you don’t have to deal with any situation where the agent advises you to do one thing while you would prefer to do another.
You can decide on your price, write up all the marketing material, show the home, and negotiate the contract without worrying about needing to discuss your decisions with the real estate agent.
3. Your listing is seen by most buyers through the MLS.
When you hire a real estate agent to list your home on the MLS, you gain access to the biggest possible audience for your listing. All of the listings on the MLS are seen on the foremost real estate sites mentioned above, like Zillow, Trulia, and Realtor.com.
They also go to all the real estate agent sites where agents look for homes to bring to their clients. There are some sites that do not accept listings from anywhere else but the MLS, so paying the $300 to $700 or so that it usually takes to get an agent to put your listing on the MLS is generally worth the cost.
Cons of Listing on MLS Without an Agent
There are several negative aspects to FSBO and listing on the MLS only eliminates one of them. Yes, you get on the main real estate agent listing service by hiring an agent exclusively to list your home on the MLS, but you still have to deal with all the downsides of trying to sell a home on your own.
For most sellers, these negatives are not worth the money they may save – and often they don’t save as much money as they thought in the long run.
Some of the negative aspects of selling without an agent – even if you list on the MLS – include:
1. The home may not sell for as much money.
Saving the seller’s agent commission fee is the biggest motivating factor to selling a home without an agent – but once the dust settles and all the numbers are added up, sellers often are unable to sell the house for as much as they could have with an agent.
Many owners wind up selling for so much less that they would have made more even if they had paid the listing agent’s commission. If you think about it, this fact is not really that surprising.
Real estate agents are trained to sell homes. Selling a home is part art and part science, and doing it well takes practice and experience. You have gotten better at your job as you have gained experience – enough that you are probably better than the new hire that comes through the door fresh and wide-eyed. The same realities apply to real estate sales. There are a number of things that a full-service real estate agent does for a seller.
It should be expressly understood that an entry only or flat fee MLS agent does none of these things for a seller. In other words, you’re giving up a ton.
An experienced real estate agent is going to know how to do everything possible to sell the home for as high a price as possible. That means setting the right home price at the beginning so that you attract the most buyers.
2. You will not have any marketing.
When you choose the flat fee MLS route, there will be no marketing. There will be no agent for creating the best marketing plan to sell a home. It cannot be emphasized enough that just throwing your house in MLS as an entry only listing does none of the things it takes to get top dollar.
You want your home marketed across multiple channels using the best marketing materials available, including professional photographs, descriptive home listings, and an extensive network of personal connections.
Photography can, in fact, make or break a sale. First impressions are created on your home the moment it hits MLS. When a buyer likes the photography and wants to learn more, they will read what the Realtor has said about the house. Creative home descriptions make a difference, as well. The description should entice a buyer to schedule a showing.
When you list your home with a flat fee real estate agent, you are NOT going to get the best marketing. There is ZERO incentive for the agent to go above and beyond doing anything for you. They already made their money. Without exceptional marketing, you are far less likely to have a bidding war – something every seller should strive for.
3. You will have no representation.
One of the most significant downsides of listing your home in MLS as an entry only property is a lack of representation.
Once buyers start to come through the door, the best real estate agents know how to answer the tough questions without driving people away and know how to negotiate for terms that are in your best interest.
All of these skills tend to yield better results – like a higher purchase price for your home. The entry only agent will send you the offer, and that’s it. If you come to an agreement, the second phase of the transaction will just be starting, including the buyer having a home inspection.
With a flat fee MLS agent, there will be nobody attending the home inspection representing your best interests – a significant drawback.
There will be no agent to meet with the appraiser either – good luck with that. How about someone to help when a problem arises like the fact you skipped out of getting proper building permits?
Did I mention doing a thorough check of the buyer’s finances before the offer was even accepted? Getting a mortgage pre-approval and verifying the buyer doesn’t have a property they need to sell. These are the kind of things when left unchecked can totally screw up a transaction. I could go on and on.
So many things happen behind the scenes in a real estate transaction to keep it on track.
4. The work you have to do is going to take a lot of time and energy.
You may be able to sell your home pretty easily if you take the first offer that comes through the door. But if you plan on pushing for the best offer, it means you will need to do all the things a professional real estate agent would do for you – while you still take care of all of your other responsibilities.
Selling a home requires multiple steps and ongoing engagement. You will need to hire a professional real estate photographer to take photos of your home – because bad pictures are going to drive buyers away. You will need to write a compelling listing that tells the truth about your home while still making it seem as desirable as possible.
It is also necessary to choose a price for the home, one that is competitive for your local market – which requires comparing recent home sales prices and all the various ways your home is similar or dissimilar to others around you – but still ensures you will get the best price for your home you can. All of these things need to be done before you list the house. Not doing these things is why for sale by owners fail.
Once the home is listed, you will need to make it available to buyers and their agents. You may need to show the house over and over to find someone that really wants to make an offer. Answering phone calls day and night is also part of the deal. And then, you need to negotiate on the terms of the sales agreement, including price, concessions, closing date, and other concerns.
You will need to handle all of the contractual work in a way that adheres to local laws concerning real estate sales to avoid potential liability. There will be no confidant in your corner advising you what you should and shouldn’t do.
It should be clear by now that the work a real estate agent does is considerable. If you want to get similar results to a professional agent, you will need to act similarly.
5. You will likely spend months second-guessing yourself.
One of the significant benefits of hiring a professional to do a job for you is that you can rely on them to catch things you may miss. Sure, you can watch some YouTube videos and learn to do just about anything at a really low skill level.
But if the stakes are high enough, like your car’s seatbelt system or selling the most valuable asset you own, you may find it hard to feel comfortable navigating the process with only your knowledge. Some part of you is going to wonder if you are doing things right or if you missed something.
It can take months to sell a home. If it takes longer than a few months, you are probably doing something wrong – like setting the price too high. Without a professional real estate agent at your side, self-doubt is inevitable.There are significant downsides to just putting your home in MLS with no real estate agent including: No advice, no marketing, and no representation!Click To Tweet
So, as you can see flat fee MLS on the surface sounds wonderful but in reality there are a ton of drawbacks.
Final thoughts on flat fee MLS without an agent.
There is a reason why the vast majority of sellers choose to work with a full-time real estate professional. The results are head and shoulders better than when you don’t. There are far more downsides to listing with an entry only flat fee agent. Could you get lucky and sell your home quickly for top dollar as an entry only listing? Sure, but the odds are stacked against you.
Every year I see countless homes that start off as entry only flat fee listings and end up with a full-time agent due to a lack of success. Are you a gambler or looking for a sure thing? If you have come to the conclusion that enlisting a pro is the best way to go, make sure you do your research.
It is nearly as harmful to pick a terrible full-service agent as going entry only. Real Estate agents, unfortunately, are a dime a dozen. The right agent, however, can make a world of difference. Go through a careful interview process with agents to increase the odds of making the right decision.
Look for someone with a track record of success. There is no better recommendation.
About the author: The above Real Estate information on listing a house on MLS without a Realtor with flat fee MLS was provided by Bill Gassett, a Nationally recognized leader in his field. Bill can be reached via email at [email protected] or by phone at 508-625-0191. Bill has helped people move in and out of many Metrowest towns for the last 33+ years.
Are you thinking of selling your home? I have a passion for Real Estate and love to share my marketing expertise!
I service Real Estate Sales in the following Metrowest MA towns: Ashland, Bellingham, Douglas, Framingham, Franklin, Grafton, Holliston, Hopkinton, Hopedale, Medway, Mendon, Milford, Millbury, Millville, Natick, Northborough, Northbridge, Shrewsbury, Southborough, Sutton, Wayland, Westborough, Whitinsville, Worcester, Upton, and Uxbridge MA.