List by owner in the MLS

For years, extremely knowledgeable home sellers—people like commercial real estate agents, real estate attorneys, and former residential agents—have contacted their friends in the residential real estate business to ask them to make a deal. “Just sign me up for the Multiple Listing Service (might then have been known as Multiple Listing) for a small fee and I’ll take care of all the work,” they said. Occasionally, the residential real estate agent would oblige, although they would want to keep the deal a secret from their full-paying clients. Although the seller of the house did not have a way to directly list his property on the MLS, he was able to gain access through his friend’s realtor. However, real estate agents would not offer something like this to the general public.

In recent years there has been such a demand for these types of services that real estate agents have realized that it can be a viable business to focus exclusively on this niche. Flat-rate real estate brokers effectively unbundled their services by charging a base listing fee for the listing and offering upgrades that a client could pay for, for example, signs, lockboxes, and virtual tours. These money saving programs are becoming more and more popular for a reason: they work. Many sellers close in escrow on their properties after saving thousands or tens of thousands of dollars.

Homeowners should understand what the “by owner” listing is on the MLS. First of all, the listing is not technically “by owner” as any time you list with a broker, even a flat fee broker, the owner or FSBO no longer considers their property to be for sale. It is treated like any other property listed on the MLS. Buyer’s agents find the property in their normal search process and show the property knowing that the seller will pay a particular level of compensation at closing if the buyer purchases the property. However, the concept “by the owner” is useful to understand that the owner has control of his own list. They can decide how the exhibit will be run, when to hold open houses, and how they want to do business. For some sellers, simply having control over their listing is their primary motivation for listing on MLS at a flat fee; the money they save is an added bonus. They can price the property however they see fit. They may hold firm on a particular price or lower the price to make the sale go through. Since the money is saved in fees, they will often walk away with more money in their pocket. Some sellers like that they can answer their cell phones for all phone calls from prospective buyers and real estate agents instead of worrying about those calls not being answered.

MLS listing by owner, flat fee listing, flat fee MLS, or whatever the term, has grown in recent years and continues to grow even in a declining market. Preserving home equity is important to homeowners, regardless of market conditions. After all, when a real estate agent sells his own property, he usually does it himself, offers the buyer’s agent a commission on the MLS (often 2.5 or 3%) and saves thousands in the process. Homeowners want to list their own properties in the same way, and luckily they now have the option.