Selling by Owner 101

ARE YOU SURE?

America’s Choice (2.5% Real Estate Direct) 10/26/2009 stated on their website that Flat Fee MLS doesn’t work so lets check it out using their best case scenario…..

Let’s compare their YTD vs. the Rochester List2Move (Roxwell Properties, Inc.) to see if there is any truth here and we will use the best case scenario, which is where there is no other company  involved in the sale.

Our guess, even before crunching the numbers is they are blowing smoke for the simple reason of getting more of your money!

SIMPLE MATH*

YTD 2.5% Real Estate Direct has generated 10 sales where the buyer has come directly to them so…

10 sellers paid $495 each to get on the program and 1% of the selling price of the YTD total $1,456,200 to the 2.5% Real Estate Direct brokerage or a total of…..  $19,512 out of the sellers pockets ($1951.20 each)

List2Move had 6 sales where the buyer has come directly to them so…since they pass the buyer directly to the seller, the sellers all saved that additional 1% in commissions!

6 sellers paid $495 each to get on the program and 0% of the selling price of the YTD total of 1,255,500 to List2Move or a total of $2970. ($495 each)

If you run with just the 2.5% Real Estate Direct numbers sellers would pay on average $1456.20 more than  they would have with List2Move to sell!

The Results

Conclusion: Flat Fee MLS does work!  These figures were based on America’s Choice’s and 2.5% Real Estate Direct’s best case scenario.  The only reason they are attacking the Flat Fee MLS business model is that it is hurting them financially! When you take into consideration the number of listings by each company YTD (2.5% Real Estate Direct 160 listings YTD and List2Move 49 you can see that only 1 in 16 (6%) listings sold with AC/2.5% best case and 1 in 8 (13%)with List2Move.com.   The numbers tell the story.

List2Move.com has received the Greater Rochester Association of REALTOR Sales Master Gold Award for the last two years and is going to be receiving another this November, not because “Flat Fee MLS doesn’t work!

The Smoke

Traditional real estate is most certainly under attack by the Flat Fee Monster and they don’t like it, as sellers from all over the country are tapping the MLS which is putting a hurt on real estate commissions everywhere.

Since there is big money involved companies in an effort to survive are using all they have left to compete with… smoke.

America’s Choice and 2.5% Real Estate Direct are not immune to this even though they are considered discounters. They still are surviving on the commissions where most flat fee companies don’t, so they are still in a way, traditionalists. Steve Levitt, author of Freakonomics predicted in 2006 that Flat Fee discounters would be the “death blow to traditional real estate.”

Traditionalists believe that if they confuse the customer it will put money in their pocket.  The problem is when the consumers figure it out, and they will, it comes back on the creditability of the company/agent.

Competitive take

This kind of competition is good, not necessarily when it confuses the customer, but when it forces other competitors to bring the truth to the surface like we have.  Ultimately consumers will be the judge and when anyone tries to mislead them on what is best for them it will have an equal and opposite reaction.

We believe this attack on flat fee is directly related to us advertising our services starting in October 2009.  So we want to thank our competitor for the complement

*Figures: Taken directly from the GRAR MLS, Reports 11/7/2009