First of all let’s define just what a flat fee MLS listing in NYC is:
A NYC Flat-Fee MLS listing is a way for a FSBO seller to list his/her property in the city’s broker database without having to pay 6% to a traditional listing agent. Typically a FSBO seller will pay a discount, or “flat fee” listing agent, up to $2,000 upfront to list their property on their local MLS (Multiple Listing Service). Listing on the MLS allows FSBO sellers to credibly offer a commission to buyers’ agents who are members of that MLS.
In NYC, there is not actually a dominant and traditional ‘MLS’ database. This is because there is no dominant National Association of Realtors (NAR) related MLS in the city that’s used by all of the city’s brokerages.
If NYC doesn’t have a traditional MLS, how is a NYC Flat Fee MLS listing even possible?
Instead, most brokers use the equivalent inter-brokerage database which is called the RLS (REBNY Listing Service). This broker database system is accessed by buyer’s agents through a variety of REBNY approved RLS vendors such as OLR, Nestio, RealtyMX or RealPlus.
In order to list on the NYC RLS broker database (MLS equivalent), a FSBO seller must sign a flat-fee MLS listing agreement with the discount broker. This is typically an “exclusive agency agreement” or a modified “exclusive right to sell agreement”. This agreement makes it clear that the broker is offering limited service to the FSBO seller in exchange for the FSBO seller having full responsibility to respond to buyer inquires and conduct showings.
If a buyer comes through a buyers’ agent (most likely because of the brokerage database) and the FSBO seller accepts an offer from a represented buyer, the seller will have to pay the buyer’s agent commission he agreed to offer in RLS. However, if the ultimate buyer is an unrepresented buyer, the seller has lucked out and ends up paying no percentage points in brokerage commissions.
Now this seems like a clever idea and an easy way for a broker short on listings to drum up some business, appear to have more listings and make a quick buck upfront for some data entry work.
However, a flat fee MLS listing in NYC continues to be a rarity. Why?
Let’s first review some of the upsides for agents:
Agents get exposure and the appearance of success with their listings all over the web
Agents make some cash upfront for inputting the NYC flat-fee MLS listings
Agents may convert customers to full-commission, full-service
Now let’s consider some of the downsides for NYC agents:
Damage to the agent’s reputation. Remember that these are ultimately For Sale By Owner home owners, not professionals. For most of them, it is their first or second foray into real estate.
FSBO sellers could ask silly questions, not respond in a timely manner or at all, get in arguments with buyers’ agents, incur MLS fines or penalties on the agent or hinder showings or open houses with their inexperience. Even if an agent’s state doesn’t have minimum service level requirements or liability for Flat Fee MLS Listings, everything a FSBO seller does reflects on the agent. Since FSBO home sellers often refuse to pay for professional photographs to save money, they’ll usually have terrible photos which means the agent’s listings have terrible photos.
And if the agent is trying to hide the fact that he is doing flat fee limited service listings, forget about having the client protect the agent’s reputation. For Sale By Owner sellers are by definition penny pinchers, ruthlessly focused on saving the maximum amount of money for themselves, and will more often than not be willing to throw their flat fee listing agent “under the bus.” Doing a flat fee MLS listing in NYC can result in confused buyers’ agents and the appearance that the listing agent has an “out of control” client.
How can I use a NYC Flat Fee MLS Listing Package if most agents won’t offer it?
NYC FSBO sellers have faced a number of problems over the years which have resulted in a historically high failure rate. These problems mostly centered around the poor quality of the available NYC Flat Fee MLS listing package providers.
Here are a few of the problems that NYC FSBO sellers had and still have with their NYC Flat Fee MLS companies:
National NYC Flat Fee MLS Companies – Problems:
Lists NYC FSBO seller properties on the wrong MLS. Even today we continue to hear stories of NYC FSBO sellers hiring a national FSBO company who doesn’t know that RLS is the main broker database in NYC. What good is being listed on the New York State MLS when it’s not used by any of the biggest buyer’s agents in NYC?
Doesn’t list your home on StreetEasy. Considering that most NYC home buyers don’t even know what Zillow is, not being listed on StreetEasy is an unforgivable crime which legitimately decimates your chances of selling for the highest price or selling at all.
Expensive. We still can’t believe that many of these national FSBO companies still get away with charging FSBO sellers up to $2,000 for the wrong MLS listing in NYC!
Shameful customer service. Most of these national FSBO companies have no awareness of the local NYC real estate market and probably barely know their network of flat-fee broker affiliates. This means that as a FSBO seller, you may have a very hard time making changes to your listing or being paid attention to at all.
Local NYC Flat Fee MLS Companies – Problems:
Poor reputation. From the moment a NYC brokerage begins marketing itself as a ‘discount broker’, many of the city’s traditional buyer’s agents will begin to boycott the discount brokerage and steer clients towards listings from traditional, full-service agents. The rationale behind this is simple. Buyer’s agents who make a livelihood of earning 6% commission on deals don’t want to help out brokers who challenge the status quo by charging less!
Unreliable. As a NYC FSBO seller, you’ll want to be sure that your NYC Flat Fee MLS provider is reliable and takes you and your listing seriously. Many small ‘mom and pop’ shops in NYC don’t necessarily have the reliability and responsiveness which, even as a FSBO seller under a limited service arrangement, you’d expect from your flat-fee broker.
Hauseit’s NYC Flat Fee MLS Listing Service solves all of these problems. How?
Hauseit is New York City’s largest, most experienced and reliable NYC Flat Fee MLS Listing company. We were born in NYC and have an intimate familiarity of how the city’s real estate market actually operates.
Our benefits to NYC FSBO sellers include all of the following:
We list you on the correct MLS in NYC – RLS
We list your home on StreetEasy
We have excellent customer service (check our reviews everywhere online)
Our affiliates are all full-service, REBNY member firms with excellent reputations
We are reliable and available for our clients
Our NYC Flat Fee MLS product works