“Flat Fee” Or “Limited Service” Listings Should Be Identified As Such

February 13th, 2007 categories: Tampa Condos, Tampa FSBOs, Tampa Florida Real Estate, Tampa MLS, Tampa Real Estate, Tips for Sellers

A “flat fee” listing is usually a limited service listing agreement in which the listing brokerage’s only service is to post a home for sale on the MLS, the database that Realtors use to find homes for their buyer clients. The owner fields the calls, shows the home, negotiates on his/her behalf, handles all the tasks of selling the home, and basically has no representation from the listing brokerage. In other words, this type of listing is a “For Sale by Owner” or “FSBO” for short.

Our MLS has rules in place which require the listing brokerage to identify this type of listing in the MLS database. Why? Because agents who represent the buyers need to know that the homeowners are representing themselves and that they do not have professional representation. Brokers can be fined for not disclosing this information.

“(N) Type of Listing/Special Listing Type: For failing to disclose a Limited Service, MLS Only or Exclusive Agency Listing, or a Variable Rate or Dual Rate commission arrangement (see Article 4, Section 21). Amount determined by the Progressive fine schedule.”

But why would a buyer’s agent care as long as the owner is offering competitive compensation to the buyer’s agent? Because the buyer’s agent has no idea of the owners’ ability to represent themselves. I remember the first time I realized I was in the middle of a transaction in which the seller was representing herself. The listing on the MLS had no indication that this was a “limited service” arrangement. The listing agent had posted the listing as an “Exclusive Right to Sell” agreement, and did not disclose that she was not going to help her client through the transaction.

It wasn’t until after we had an agreement that the listing agent told me that her client “is a friend and I just listed it for her as a favor. I’m not really representing her.” WTF? So I quickly found out that this seller had no idea what she was doing! I had to have her sign a disclosure so that she understood that I did not represent her, but I basically had to do her side of all of the work! “Can I have your Seller’s Disclosures?”, I asked. “What’s that”, she replied. That’s when I realized I was in trouble. “Who is holding escrow?, I inquiried. “What’s that now?”, she again replied.

So on it went from there. I did double the work for the same fee! The seller actually showed up at the closing without the keys to the condo! “Condo docs?” “I have to get those for you?” Had I known the workload that I would have in that transaction, I would have certainly renegotiated my fee. So buyers’ agents beware. Make sure you understand what you are getting into if you decide to work with a “limited service” listing. That’s if you’re lucky enough to have it disclosed upfront!

Disclaimer: While it really did (and does) happen, some of the story above was embellished to make a point.

This entry was posted on Tuesday, February 13th, 2007 at 2:39 pm and is filed under Tampa Condos, Tampa FSBOs, Tampa Florida Real Estate, Tampa MLS, Tampa Real Estate, Tips for Sellers. You can follow any responses to this entry through the RSS 2.0 feed. Responses are currently closed, but you can trackback from your own site.

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2 Responses to ““Flat Fee” Or “Limited Service” Listings Should Be Identified As Such”

1. Jonathan Greene [February 13th, 2007]

   Hallelujah! Amen Brother! *Choir Sings in Harmony*

   I really love working twice as hard for the same amount of commission, don’t you?

2. LennyG [February 14th, 2007]

   As an agent you just don’t know what you’re getting into with “limited service”. For the buyers’ agents it’s “double the service”.

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