Lashae,

Sorry to hear that you're in a financial pickle - as many are right now. I know you don't want to hear this, but the market will drive what your home is worth, not the balance on your mortgage(s). In a balanced or Seller's Market doing a FSBO with a service agreement for MLS might make financial sense, but it's still a risky proposition. But in this market? I've seen wonderful homes go almost unnoticed because they missed their price point by a few thousand dollars. What happens when you enter negotiations and you have NO wiggle room on price because you won't net what you owe?

I don't want to advise you not to list your property, but you need to get realistic on your chances of selling as a FSBO for a price (factoring the strong possibility of paying the Buyer's closing costs) which still nets enough money to pay off your mortgage(s). Maybe now is not your time - not in the coming Fall market anyway, which is traditionally very slow. If you need to sell, then I would recommend hiring a short sale savvy professional who will try to keep you from falling off that cliff as much as possible, but will also be able to handle a short sale if it comes into play.

Pay a pro - you won't regret your decision. Or rethink your goals and the market and see if the timing is right for what you hope to accomplish.

Just my two cents worth - best of luck to you.
-Dan

p.s. Please take a minute to read a post from the Q&A section of our website regarding FSBO's. They really make far less sense when you think through the process:

http://www.swansonrealtors.com/ewr/infolib.asp

Thanks for all the advice.....the reason we have to do this as a FSBO is that we would OWE money to pay out a 6% fee. So, while I would love to get a full service listing we can't afford it. I paid $154K and just in 1 week we've spent $4-$5K towards updates......appliances, wood flooring, paint, fixtures, garage, etc. To top it off there is a property in my association on the market for $95K. Granted it isn't updated and has been listed for over a year, but it's still there + others.

I can't compete except with price and features.

If any of you are willing to help me list on the MLS for a flat fee, we are ready. Let me know.

Lashae,

You might read Keith Sorem's response to another users question regarding discount brokers. Some interesting facts if nothing less and something to consider before spending $495.

http://www.trulia.com/voices/Home_Selling/our_listing_contra…

To answer your question very simply. The buyer's broker is paid by the listing broker through the rules and regulations set forth in the MLS bylaws. The amount paid is up to the listing broker. To make sure that the broker isn't "holding back" some commission you can ask to have a clause put into the exclusive right to represent and also request to see a copy of the agent report from the MLS showing that they are offering 3.0% to the buyer's broker.

All of that aside I would strongly encourage you to consider all of your full service options prior to listing with an MLS only broker. Today's market is very different from the market that brought these companies to viability. Some might argue that in a buyer's market the MLS only companies don't have a viable business model.

Cameron Piper
#1 Trulia Agent in MN

Lashae,

You have some good questions and unfortunately this is a good example of why For Sale By Owner is a bad idea. If you have questions about the listing agreement, imagine the challenges you may face when you receive a 20 page purchase agreement with contingencies and addendums from a licensed real estate agent who represents the other side.

You're already taking a chance by paying $495 up front that's not refundable if your townhome doesn't sell. Listing with a real estate agent doesn't cost you anything upfront and comes with experience and insight in this very challenging market.

It reminds me of when I tried to change my own spark plugs in my car some time ago. How hard can that be right? I went to the auto parts store, got the right plugs, went home pulled the old ones out and replaced them with the new ones. I thought I was pretty cool by doing it myself and saving money until I went to start the car and only some of them were firing. Embarrased, I took the car to the auto shop, asked if they could check it right away and paid the same amount to have them tell me the spark plugs need to be spaced properly before installing. Who knew? I spent the same amount of money and wasted a lot of time when I (in hind sight) should have just let the pros do it in the first place.

I wish you the best of luck.

By the way, did you know that Thursday or Friday is the best time to put your house on the market? That's when most buyers and their agents are setting up groups of showings for the upcoming weekend. Your listing may accumulate four days on the market before you get a showing scheduled.

I would strongly recommend for you to reconsider your selling strategy.

Lashae,
Make certain that you understand all the terms of your listing contract (Exclusive Right to Sell) prior to signing. These questions should all be asked to your chosen Realtor who is offering you (apparently) an MLS-listing-only contract at a flat fee of $495, which is also an Exclusive Right to Sell.

Remember that all commissions are paid to brokers who represent either the Buyer, the Seller, or both (dual agency). The broker(s), in turn, pay the agent(s) involved in the transaction. So when you pay a commission, you're paying a broker, not an agent.

The contract should be very specific in how much is being paid to whom for services rendered. The Listing Broker (your broker in this case) normally gets the entire commission amount and then pays the Buyer's Broker from those proceeds. On every MLS listing there is a block which details exactly how much is being offered to the Buyer's broker or a Facilitator as a commission on the sale. If you want to offer 3% to the Buyer's broker you need to make certain that 3% is specified on your MLS listing paperwork (which you must also sign) for the Buyer's broker commission.

There is no reason to suspect the Realtor of anything devious in this case. But you need to make certain that the paperwork and contract that you are signing say what you want them to say. If you have questions which are not answered to your satisfaction by your Realtor, seek legal advice from an attorney.

-Dan