UPFRONT FEE BROKERS ARE DISAPPEARING AS SELLERS WISE UP.

In just a few years we have witnessed the birth, explosion and demise of the flat fee/pay upfront/limited service brokers. Limited service is just that. They put your home in MLS for hundreds of dollars upfront but you're still selling the property on your own. If another agent brings the buyer you must pay the other agent in addition to having someone else like an attorney or another agent represent your side. The sellers that sold homes this way paid, on average, about 3.6% when all said and done. What became evident over time though, was that very few sellers could sell this way (only 1 in 4 sellers were successful in the last 3 years) for various reasons that I have explained in past blog posts.

As more and more of these homes listed with limited service would go unsold, home sellers started to wise up. Why pay hundreds of dollars UPFRONT when you have such a low, low probability of selling via this method? Unfortunately a lot of sellers found out the hard way that the flat fee model does not work after wasting months and years on the market without success. We estimate that sellers have spent well over $1.1 million dollars in upfront fees in Metro Milwaukee, without selling their home this way.

As a result, a number of these outfits have closed doors and the rest have considerably less home sellers willing to part with hundreds of dollars Upfront. One of the top 2 outfits completely converted to a full service model. The other offers full service in addition to limited but suggests right on their website that limited service decreases the marketability of the home!

So, it appears that the explosion in limited service way of selling a home was merely a fad just like we saw with the advent of the internet and the For Sale By Owner websites. It proves once again that selling a property requires proper marketing and a skilled agent to make it happen (most of the time). Homeowners Concept continues to offer that rare program whereby a seller gets to work with any of our highly experienced Realtors while paying thousands less in commission.