How Changes to the MLS Changed Real Estate Commissions Forever

As with many things in the world, real estate is changing. Some of the biggest changes have to do with the Multiple Listing Service (MLS). Once an exclusive database for brokers, the syndication of much of its contents to online websites has dramatically changed the public’s opinion about the value of a broker.

The MLS Then

Years ago, before the Internet, real estate agents had a secret real estate weapon known as the Multiple Listing Service (MLS). The MLS is a database of all the houses for sale in any given area and was used to help sellers find buyers for their home. If you wanted your home added to the MLS, then you had to go through a broker. If you wanted to know what houses were for sale, you had to go through a broker. There was no other way.

Because of the exclusive nature of the MLS, brokers used their ability to access this database as their unique selling proposition. They told buyers and sellers that the MLS was the main reason they were valuable, rarely explaining the many other functions they performed.

For the rights to the MLS, buyers and sellers were willing to pay the commission set forth by brokers, which was typically 6% of a home’s selling price. Even though some people felt the price was steep and even wondered why it was a percentage based commission, they paid the price with the understanding that the MLS made it worth their while.

The MLS Now

However, not too long ago, things began to change. Much of the information on the MLS that used to be exclusive has been syndicated. This means that online sites, such as Zillow, Trulia, Realtor.com, and others can show anyone with a computer what is for sale.

Although a broker is still needed to add anything to the MLS, the data found within is no longer exclusive. Almost overnight, brokers had to rethink their selling proposition. They had to quickly re-educate the public about what they did and why they were still valuable to the selling process.

Public Opinion About the 6% Commission

Because the public had been conditioned to believe that the biggest reason they needed an agent was access to the MLS, consumers began to wonder if a broker was even necessary anymore.

Agents began to create lists of things they did for their buyers and sellers, but consumers were not as impressed as they had hoped. In fact, many sellers looked at the list and decided that with advancing technology and their social networking skills, that they had what it took to sell their own home. This led to the birth of many For Sale By Owner (FSBO) sites, which, for a flat fee, would provide a few services like a dedicated marketing website. Discount brokers also popped up, providing the inclusion of a property on the MLS for a flat fee.

Many sellers were willing to sell on their own to save money on the high fees. Unfortunately for them, the failure rate for FSBO and discount broker sales is extremely high. 88% of those that try to sell their home on their own fail and end up listing with a broker.

Despite the odds, sellers were still not convinced that paying a percentage-based commission for the sale of their home was right. The syndication of MLS data, along with technological advances had changed everything, and the consumers knew it.

Flat Fee, Full Service: A Better Way

Recadia understands the value we provide to our clients. We recognize that selling on your own or hiring a discount broker does not lead to success. However, we also understand that a percentage based commission no longer makes sense given the changing face of real estate.

That is why we have created a flat fee, full service model that gives our clients exactly what they need to have the best odds at success at a fairly priced flat fee. With Recadia, you will get:

  • A listing presentation package
  • An overview of current market conditions
  • A marketing plan including MLS, listing on major online sites, signs, etc
  • Professional HD photos
  • Suggestions for increased curb appeal outside and first impressions inside
  • Fielding potential buyers and buyer’s agents
  • Showings
  • Reviewing offers
  • Negotiating and preparing counter offers
  • Legal contracts
  • Coordination of inspections and appraisals
  • Coordination of brokers and lenders at closing
  • Solving title problems
  • Review of documents
  • Communication that keeps you up-to-date on the process
  • And much more

However, instead of paying a commission based on your home’s selling price, you will pay a reasonable flat fee of just $3,000, saving you thousands. To learn more about Recadia’s flat fee, full service model, you can read How Recadia’s Flat Fee, Full Service Real Estate Model Can Save You Thousands of Dollars on Real Estate Commissions.

If you want to use the full service of a traditional broker but don’t want to pay the traditional 6% commission, then Recadia’s flat fee, full service model is for you. Give us a call at (214) 281-8500. We would be happy to help you with your home buying and selling needs.

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