More and more, home sellers are using non-traditional real estate service companies to sell their homes, and I wonder if this says something about the future of real estate agents.
Up until several years ago, a home seller had to list their home with an agent if they wanted their property to be a part of the Multiple Listing Service (MLS). And most sellers wanted to be a part of MLS because that's how the majority of homes were advertised and sold.
But now there are discount brokers and real estate service companies that offer home sellers the opportunity to be a part of MLS at a much lower cost. Many are featuring "a la carte" pricing, so sellers can pay for exactly which services they want, but often save significant money when compared to traditional real estate agent commissions.
Consider a home selling for $200,000. A typical commission is 6%, or a total of $12,000 on the sale of this house. Then consider a service like Custom Fit Realty. Services start at $499 for a listing with MLS. Sellers then add on services, with choices including $99 per month for the agency to handle all phone calls regarding the listing, $99 for an online video tour of your house, $349 for an appraisal, $199 for a 90-minute Sunday open house, $499 for closing services, and more. Even if you maxed out on all the company's services, the site estimates you'd spend only $8,900. That's a significant savings off the $12,000 fee for a traditional agent.
Naturally, a non-traditional real estate agent arrangement might not work for all sellers. But I bet it would work for a good percentage, and the savings seem to make this type of business model a no-brainer. I think that we're going to start seeing more and more of these types of services springing up as home sellers realize they can save thousands of dollars and still get quality services to help sell their homes.
Tracy L. Coenen, CPA, MBA, CFE performs fraud examinations and financial investigations for her company Sequence Inc. Forensic Accounting, and is the author of Essentials of Corporate Fraud.
Traditional real estate agent services going out of style?