How to Market your flip on the Multiple Listing Service without paying a listing commission
By Brian Kendrick
The other day I was asked by a beginning investor who had just rehabbed a house what FSBO (For Sale by Owner) websites we suggest to market properties. He understandably wants to save on commissions and I can’t blame him because if his flip is like many of our real estate flip homes here in San Diego, his profit margin will likely be tight. We’re no stranger to FSBO as we sold all of our homes that way until starting our own real estate brokerage RBD Residential recently.
So here’s what I told him: You are almost wasting your time advertising on anything but the MLS (Multiple Listing Service) unless your intention is to build your brand. The MLS is going to bring you ready and qualified buyers whereas a very high percentage of potential buyers searching property websites haven’t even been qualified for a loan by a lender or are working with a realtor.
What does this mean? You want an offer on your real estate flip home yesterday and you don’t have time to work with someone that still needs to get qualified for a loan. Depending on their motivation and individual situation it could take months until they are ready and able to buy. You want to focus on low-hanging fruit and that’s what the MLS gives you.
This is how you can sell your real estate flip home using the MLS without paying a listing commission. Find a real estate broker that will list the property (listing broker) on the MLS as an open listing for a flat fee. You shouldn’t have to pay more than a $250 one-time fee for a 12-month listing with the ability to make unlimited changes to the listing. You provide the pictures, property characteristics, determine sales price, handle the calls, negotiations and manage the escrow. So that’s it, no commission to the listing agent. You are going to offer however a commission to the agent representing the buyer known as the selling agent. We used to pay a 3% commission to the selling agent and depending on your market, you may offer at least a 2.5% commission.
Depending on how many real estate home flips you do in a month and your ability to juggle acquisitions, rehabs and sales, you may get to a point that you want to hand off your listings to a realtor. That’s fine. You’ll know when it’s time for you.
“Brian Kendrick is a co-founder of RBD Ventures, a residential redevelopment company based in San Diego. He will be one of the speakers at RBD Ventures’ 3-Day Intensive Rehab Workshop from July 27-29. He can be reached at email@example.com.”