Home Selling in Phoenix>Question Details

Steve, Home Seller in Phoenix, AZ

Do agensts discriminate against houses listed via flate rate listing services?

Asked by Steve, Phoenix, AZ Wed Jun 11, 2008

I hve had no agent/broker interest event though I will pay the buyer's broker's commission.

Help the community by answering this question:


My experience with limited service listings is this.... The seller's home is overpriced and they are trying to cut costs wherever they can, so they hire half an agent for a fraction of the cost, pay upfront fees and then wind up a full time, full service realtor, 3-6 months later. I have heard time and again from clients that it was a complete waste of time and money. It takes a lot more than a file in the MLS database to get a home sold.
As far as your buyer broker fee, is it a buyer's broker fee that is considered typical in your area or is it significantly less? Here is a scenario for you to consider.
A plumber has 2 emergency calls and only has time to do one. One customer is totally willing to pay his standard additional fee for after hours calls, while the other wants to only pay the normal 9-5 rate. Whose plumbing do you think got fixed that evening?
Buyers are hard to come by, homes are plentiful. If some sellers are offering a buyers agent 2 %, while others are offering 4%, well, whose house do you think will be shown first, more often or presented in a more positive light? One guess.

I do believe the majority of agents will take their buyer client to whatever homes will work best for them, but your home just might be the last one shown.....

You dont get to drive a porsche for the price of a Yugo.....
5 votes Thank Flag Link Wed Jun 11, 2008
It may not be that agents are black listing your home...it's probabaly lack of marketing. Most flat rate/discount agents cannot afford the to properly market your home at the flat rate.
Web Reference: http://www.cindihagley.com
5 votes Thank Flag Link Wed Jun 11, 2008
The Hagley G…, Real Estate Pro in Pleasanton, CA
I guess I'll be swimming upstream here.

I don't care whether you're flat fee, FSBO, low fee, no fee.

If your home is priced in my client's price range, fits my client's parameters (location, room count, #BRs, #Baths), and you're willing to pay a competitive co-op fee for buyer's agents, and I am AWARE of it (that's a biggie) then I'm going to show your home.

Yes, it may be more work for me, if you don't have an agent on your side, because I'll have to do a bit more work (it's certainly NOT double the work)... but I've worked with listing agents who are complete slackers and I end up doing all the work in those situations too.

If you have no interest, it is more likely that you are not priced competitively, than discrimination, in my opinion.
4 votes Thank Flag Link Thu Jun 12, 2008
Alan May, Real Estate Pro in Evanston, IL
Do I discriminate against showing a limited services listing? I might, it depends. I know that with a limited services listing I am likely going to be doing the work of 2 agents. I will likely be educating you in as limited a way as possible about all of the real estate things that I need you to perform that your agent isn't doing for you. I can't perform them for you, but if I want this deal to succeed I need you to perform them...yet you don't know what they are, if I don't tell you, and often you will have questions, concerns, complaints, issues, for which I cannot offer advice. It's a huge hassle for me.

So that's the hassle of working with the seller that is represented by a limited services agent. I might show one, if it was the only choice available to my clients. But if there are 8 other choices (or more likely 42 other choices), why would I show the one that is likely to cause me the most extra work to complete, unless it is an absolutely fabulous deal for my client? Which leads to the next problem with most limited services listings. They are almost always over-priced. And not by a little, but by a whole heck of a lot. Which in the end, is the #1 reason I don't show them. Limited or full service, out time is wasted looking at over-priced property.
Web Reference: http://www.teambelt.com
4 votes Thank Flag Link Wed Jun 11, 2008
Yes, Maybe, some will.

Realtors want their fair commission. In Phoenix it is generally x%. If you are off by .05% it will effect showings.
Now the Buyer Broker has to deal with a limited service, which really means they have to do the work of a listing agent and a buyer broker.

What ever price range you are in you have competition. You have to be priced better than those bank owned homes. Then you have to advertise this to every potential buyer out there.
Walk through your competition, are you the very best deal around?
When you are the best deal, it will not matter, you can disconnect your phone, Buyers will find you.
4 votes Thank Flag Link Wed Jun 11, 2008
Mr.P, Other/Just Looking in Arizona
Hi Steve,

YES, YES, YES, some do!! With so many homes for sale today, it is crucial to have you home in alignment with the market. This means, be sure you are attracting buyers. Have great curb appeal, be priced at "market value", have easy access for showing, and you really should offer top commissions to the agents bringing you buyers. If you take a close look at homes selling and the ones that have been on the market for a long time. You will see that the amount lost of the home sale price is far more than what you would pay for in commissions.

Good luck
2 votes Thank Flag Link Fri Jun 13, 2008
Don't foget everything is negotiable... Before I show a property that has a flat rate fee or any other property where I feel my work is under valued, I ask the listing agent orvthe broker if the seller is willing to pay 3% to me. If the listing agent is willing to take less... than that is up to them. I put a value on what I do and will not be undersold.
2 votes Thank Flag Link Wed Jun 11, 2008
Before answering I would like some clarification. By "flat rate listing services" do you refer to ones who you pay say $300 to place your house in the MLS at whatever you feel is a good price and the agents negotiate directly with you the seller?

If that is the case then yes agents will be less than thrilled with the prospect of showing these homes. The reasons vary from agent to agent, but mostly it is because we have to deal with an uneducated seller. (and end up doing the work of 2 agents in the process) Many times the property is overlooked due to being overpriced for the market as well.

Brokers listing as a flat fee thrived in the good market, but they really are not brokers at all, they simply charge people to post their properties in a venue made for agents and paid for by agents while having no agency responsibilities for the people they claim to represent.

If this is not what you mean, then please clarify.


2 votes Thank Flag Link Wed Jun 11, 2008
No. If the house has what my clients are looking for and represents a good value you can be sure I would show it and if they want it I would do everything I do to represent them in the transaction. If you were not offering any compensation I would negotiate that with my clients. Remember that although the fees come out of your proceeds, it is the buyer that brings the money to the table.
I agree with Elvis. If you have had no activity you are not presenting a value proposition to the market.
1 vote Thank Flag Link Fri Jun 13, 2008
Jed Lane, Real Estate Pro in San Francisco, CA
Would you hire a surgeon to Just make an incision & then leave you to operate on yourself?
1 vote Thank Flag Link Thu Jun 12, 2008
There is good and bad in the flat fee situation. Many but not all of the types of listings are over priced and there is not a lot of incentive for buyers agents to do a lot of extra work for less compensation when there is most likely a number of comparable properties listed with the local MLS. Motivated sellers recognize the value of a experienced real estate professional who has marketing and transaction experience. These agents are able to market the property to a target of qualified buyers and close deals while the flat fee does not. Do your own reasearch and ask an experienced professional for their opinion. Good luck!
1 vote Thank Flag Link Thu Jun 12, 2008
The issue with flat-rate listing services is not just the amount of work to be done, there is also a potential legal liability. Since the seller is essentially unrepresented, the buyer's agent is forced to walk the sellers through the required paperwork in order to get the transaction to close. This can create some legal risk, since the buyer's agent has no contract with the sellers.

If you choose to go with a flat-rate service, be sure to ask them what assistance is available once you receive an offer. If you're completely on your own, then it's best to get yourself educated on the sales process and the required documentation for your area.
1 vote Thank Flag Link Thu Jun 12, 2008
Plain and simple.... yes. If you want your listing to receive maximum showings, you need to offer at least the standard co-broke commission. If you would like a more detailed answer and my own personal view please feel free to contact me.
1 vote Thank Flag Link Wed Jun 11, 2008
You hear of reports about agents "black listing" limited service or flat fee company listings. In fact the DOJ has just settled a national case against the National Association of Realtors regarding similar accusations. NAR admitted no wrong doing. Here is the thing: every market is different from another. In my market in Raleigh, NC buyers are very informed and like finding homes on their own in addition to what the agent is showing them. There would be little chance in my market for agents to keep their clients away from flat fee listings. When a buyer wants to see a house they are going to see it with or without the agent. I am not sure about your market however. Is your home accessible on Realtor.com? Other internet sites like Trulia? These are the tools buyers use to find homes outside the realtor provided mls reports. If they can find you there then your problem is probably not that other agents are keeping them away. Something else is detering them from wanting to see or even inquire about your property. The two biggest reasons are price and appeal. If your home has good appeal and is neat and well kept then the problem is price. Buyers are shopping price first and ammenities second these days. They will pass right over a home on paper or on the internet if it is over-priced. Some food for thought.
1 vote Thank Flag Link Wed Jun 11, 2008
Usually agents don't know what type of rate or total rate a seller is paying to sell their house on MLS. What we see is what amount we as agents would get paid if we brought a acceptable offer from a qualified buyer. The typical rate or commission we get paid for that service is 3% of the sales price. While I can't say that I would "discriminate" against a house if I thought it was the right house for my buyer I would perhaps show a different house if it paid more but only if it had all of the same features and assets and was in the same neighborhood etc. While getting paid for our services is very important it is not the only reason we take buyers to a particular home.
1 vote Thank Flag Link Wed Jun 11, 2008
Agents are not allowed to show favoritism based on commissions offered or selling conditions that may be part of a FSBO or flat fee listing. Our responsibility is to show our clients every home that might be a match to their expressed desires.

That said, some agents do not like working with a flat fee listing because the home seller is often not aware of the many requirements and stipulations imposed by the ADR Purchase agreement and by the tenants of Agency.

Selling a home is a multi pronged legal transaction. A home seller without good representation can easily get himself in trouble and the agent representing the buyer is not obligated and sometimes, due to agency requirements, not allowed to advise the seller of a breach in contract or other issues.

Thus, I would not say agents discriminate, a good one will show your home if it is priced within market standards and meets his or her client's requirements.

Generally a lack of showings in an indication of pricing problems. The bank-owned homes may be the bigger culprit. Has your agent performed a recent market analysis to determine your position in the market? We advise reviewing market conditions on a weekly or bi-weekly basis in this market. With hundreds of bank owned homes coming on the market weekly, you simply may not be competitively priced.

In addition, you may not be getting the Internet exposure needed to find a buyer. Nearly 85% of home buyers are performing searches on the Internet... not on an MLS system. In today's market much of what we show our clients is driven by their own searches rather than searches performed by the agent. This is a very new real estate trend. We have had to hire a full time Internet marketing person just to keep our client's listings in full view on the Internet so they can be found by home buyers and sold.
Web Reference: http://www.urbanteamaz.com
0 votes Thank Flag Link Wed Oct 8, 2008
The answer for our office and our business is NO! We represent the buyer and nothing but the buyer. We have an outstanding referral based business and do not have to discriminate.
Those agents that do have not built up a strong enough business
Find a strong agent who can serve you well.
Kindest Regards,
Catherine Kolodin, GRI
Eco Broker International
0 votes Thank Flag Link Sun Jun 29, 2008
Let's put it this way....most will tell you the official answer is NO, but most do. There seems always to be something wrong with the property that doesn't match the buyer's criteria, if you know what I mean. Most agents also hate to deal directly with the seller because they are fearful the seller will not know real estate well enough to ensure there are no missed deadlines, or the transaction gets messed up due to the seller's lack of knowledge. I'm one of the few that is not subjected to this decision. I am formally employed by my buyers and my pay is 3% of the purchase price. In most cases, the seller pays this fee, but sometimes the buyers make up the difference if the buyer's agent compensation does not come to 3%. The buyers will then reduce the price of the house they are buying by what they have to pay me. So, in effect, the seller is paying the commission no matter whether its the traditional full service, or the flat rate as you suggest. The buyers are never willing to allow the seller to keep the commission he's not paying. Most flat rate real estate companies are struggling in this market and I'd caution you to think hard before trying to sell your home on your own. Real estate agents are way more valuable than just putting your house on the MLS.
Web Reference: http://www.TheMBATeam.com
0 votes Thank Flag Link Sun Jun 29, 2008
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