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Co-Broking and Flat Rate MLS As those in the real estate industry know, this typically refers to real estate agents sharing a listing. For example, a real estate office with a listing will "co-broke" with another real estate office, which may have a buyer. If there's a sale, the real estate agents involved (listing agent and selling agent) will split the commission. When it comes to selling your home "by owner", it is possible, even desirable, for you as the seller to co-broke your own property. When you decide to sell your home FSBO, you are ultimately performing the functions of the listing agent (or, at least, you should be!). You've put a real estate sign in front, you're advertising, you're taking phone calls, you're conducting Open Houses and on and on. Therefore, you can claim the equivalent of half the commission. In a typical real estate sale where there's a 6 percent commission, the listing office gets half the commission (3%). The other half (the other 3%) goes to the selling office, the agency that produces the buyers. Your half is the same as the listing office's half, when you deal with an agent while selling your home FSBO. Here's how it works: WHEN A BROKER HAS A BUYER Often, a real estate agent will call a FSBO seller and say that he or she has a potential buyer for your property. They will ask if you're willing to co-broke or co-operate with real estate agents? What does the agent mean? What the agent wants to know is whether or not you'll pay them the selling office's share of the commission? In other words, if they bring in a buyer, will you pay them a half, or a 3 percent, commission? Again, since you're doing the work of the listing office, you'll be keeping the other 3 percent. If you're agreeable, they'll usually want you to sign a short term listing (typically a 24 or 48 hour listing), to protect themselves, and then they'll introduce the buyer. If you sell, you'll owe them that 3 percent commission. SHOULD YOU DO IT? Many FSBO home sellers are purists. They are determined to pay no commission at all. They hope to find a buyer on their own. Bear in mind the odds of successfully selling your own home and realizing a savings of all commissions is slim. The majority of pure FSBO listings fail. On the other hand, why not go with the old bird-in-the-hand theory? A broker who has a buyer for your property could mean a quick sale. You'll still only be paying half the usual commission. If you have already discounted the price based on real estate commission savings then you will have to consider the circumstances. Along these same lines are companies that offer pre-arranged co-broking agents or hybrid listings to FSBO’s right out of the gate. This process allows you to maintain your right to sell your home yourself without real estate fees but also places your home in the hands of a local real estate agent with an agreement to pay 3% if your home is sold through any real estate agent. These companies typically charge an MLS “flat rate fee” ($199 - $499) and include the exposure of an FSBO MLS listing that puts your home in front of thousands of real estate agents looking for a home just like yours. You still save the 3% (less flat fee) while substantially enhancing the likelihood of selling your home. FSBO TIP Don't expect the selling office to do your work for you for half a commission. They should however provide the written agreement of sale and negotiate the sale between you and the buyer. They will not run your end of the escrow, help you clear title or any other work that a “listing” office typically performs for their 3% fee. SELL YOUR OWN HOME – FREE FSBO Real Estate Products and Tips! |
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