Posted by Ron (MD) on March 22, 2001 at 18:01:49:
Here in Baltimore there are brokers that will do this for $99 or $199. You get essentially no service from the listing agent beyond multiple listing the property.
Even though I am licensed and get back half of the listing commission, I have used these bare bones brokers.
Now, one caveat. It wouldn’t hurt to talk to agents from other brokers to try to get a read on the local agents’ attitude toward these cheapie listing companies. Here, many agents won’t show a house listed by Mr. Lister (probably the biggest) because the other agents hate that he’s taking away some of their business. Also, they complain that they are only getting half commission (i.e., 3%), yet they are doing the work for both sides of the deal. As you probably know, though, after a property is listed, there is very little for the listing agent to do.
When I was using one of these companies, I was using a small, little-know broker. My hope was that other agents wouldn’t know that it was a cut-rate listing broker. I will say that I was disappointed by the amount of activity, but I couldn’t be sure if it was due to the listing agent’s reputation, etc. or the location or price of my house.
What I do is, I FSBO a house during the repair period and for 30 days after the work is done. Then I list them. I don’t like to pay a realtor commission, but I also don’t like to let a house sit.
I will say one thing about using agents. When I FSBO a house, my standard contribution to the buyer’s closing costs is $2,000 (on a $60k-$70k house) and I always get full price. I used to be concerned that a buyer’s broker would try to beat down the price and increase my contribution. In fact, I found that their first priority is to get the deal done. Typically, before they write a contract, they call me to see how flexible I am. I tell them I will only accept a full price contract and I will contribute only $1,000 (which is half what I normally do). The contract almost always comes back with those terms. I even had one come back with a $5k higher selling price! Bottom line, I am usually able to mitigate the commission a bit by reducing my contribution.
One other thought. I do almost all of my rehabs in one zip code. Most of my sales are without having to multiple list. The bad news is that my houses do not show up as comps in the system. Since my houses usually sell well above most others in the area, I want the appraisers to use them for comps. To do this, I’m going to start paying $99 to have them put in the MLS even when I find my own buyer. It should make future appraisals a bit easier.
Hope that helps.