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With home sellers continually looking for ways to save money when selling a home, and many sellers attempting to sell their homes on their own, it is becoming more popular for agents and brokers to start providing their real estate services ala cart, meaning they can sell different services instead of the typical “get it all for 5 or 6% of the sales price” type of commissions.
There are benefits of providing ala cart real estate services. Most established full service brokers will strongly discourage their agents from doing this, afraid it would cause a decrease in real estate commissions, but many emerging and local brokers over the past few years have been catering to these needs with good results.
If you are considering providing ala cart real estate services, you should first consult with your broker - there’s a very good chance they will not allow you to do this. However, if you ARE the broker or have freedom on setting your rates and commissions, having a few different commission structures set up for several situations could help you in the long run secure more methods of income while at the same time attract more clients looking to save money by doing more on their own.
To illustrate what I mean by providing ala cart real estate services, here are a few examples of different things you could do:
1. Charge a flat rate for a market analysis: Most agents will do this for free in the hopes of getting a listing out of it. However, you could also reasonably consider selling in depth sales reports and CMA’s to help the FSBO make sure his or her home is priced competitively. You will have to make sure if you do this however that the information is more detailed than what is available through public record searches online and does not interfere with your broker’s policies, state laws, or your local MLS rules.
2. Discount Marketing Package: Many brokers have emerged with “Flat Fee Listing” services - for a set amount, they will list the property in the MLS, put a sign up in the yard, and possibly even throw in a few ads to boot. If doing this, you will have to be very clear with what the seller can expect and your individual responsibilities.
3. Transaction Only Services: By providing transaction only services, you would have nothing to do with introducing the buyer with the seller, but can be the person to coordinate the closing and make sure both parties are on top of their contract responsibilities. This one can be tricky, so make sure you understand the laws and necessary requirements for being a transactional licensee and that the parties do not misconstrue your services as those of a real estate attorney.
4. Hourly Consultation Rates: You can also choose to provide hourly consultation rates. This can be done via the phone or in person. Again, you will have to make sure that you do not misconstrue your professional advice as legal advice.
5. Buyer Services: Another option is to have flat fees for buyers instead of a standard seller paid commission price. In their eyes, this will allow them to negotiate a better sales price for the home since the seller will not have to pay as high of a commission. A lower sales price could also potentially save them on taxes, depending on how taxes are calculated in your market.
What are your opinions on charging flat fee rates or providing ala cart real estate services? Do you think it is something worth doing to secure additional customers and sales? Or do you see it as a threat to the standard commission structure most agents are still using today? If you’ve provided flat fees or ala cart services, what were your results?
8 Comments
I have not seen anyone doing this in Austin yet. From what I have seen, potential clients are pretty cheap and don’t want to spend money. Most balk at a transaction fee. I am curious to hear about results as people take this approach.
You are right Sam. My friend Jeff told me about same thing that you said. Most clients are really don’t want to give money.
I think not all are cheap. Some of them are but most of them are not. My dad had a client and he said that they are good. We should not think about bad things to our clients.
We had a few brokerages opening up in my area, but they closed down pretty quickly. It might work in some parts of the country, but it didn’t work in the Philadelphia area.
Website Bucks County Real Estate
Ya I don’t think its effective because clients have the NEED of more then just what they “think” and then the issue is they will try to get all the info they can for the least amount of money, the RE agent then ends up putting way more work in then what they were paid for…..We have a couple brokerages that have tried this idea but they get no where with it because there is a need in 99% of the cases for a real estate agent to complete a transaction from beginning to end, too many people just believe that they can “do it themselves” and save all this money but get stuck or don’t realize their not helping themselves at all. At the end of the day when your in charge of a business transaction worth hundreds of thousands of dollars its not like anything else “most” people have ever encountered prior, and I think most do it yourselfers or real estate agents who do “al le carte” don’t realize that this is a not a business transaction that is going to be able to be broken up into little pieces….Just my thoughts though
You have a good point Michael - I could see how a customer could think they only need x an y but need the z too and then not want to pay for it & disagreements arise…
I too have seen a few companies that solely do ala cart fall flat on their faces, but I think this was more in part due to their shady activity than the actual ala cart part.
I think discount and ala cart agents are fine as long as they do their side of the transaction. I hate it when they simply try to push all their work onto the other agent.
In south america the only way not to pay commission is to find directly a seller and do all the process withaut any realtor. They just upload the property to a website and they get in contact directly through that site; they just pay the notary and they save more than 5 % in expenses.