MLS® stands for multiple listing service. Every home for sale listed by a REALTOR®, unless it is specifically exempted from MLS®, will be listed in MLS®. Listing REALTORS® enter the data about a home for sale and offer to share the commission with a broker who brings a buyer. Regardless of which broker a REALTOR® works for he or she has the same database through the Victoria Real Estate Board; therefore, once your home is on MLS® you’ve employed 1,200 Victoria REALTORS® to help sell your home.
In Victoria, over 90% of MLS® transactions involved two REALTORS®, the listing REALTOR® and the buyer’s REALTORS®. Reality is, the vast majority of buyer’s are represented by a REALTOR® and they are offered a co-operative commission for showing and selling your home.
Traditionally, an example of what a seller’s REALTOR® may charge is a commission of 6.0% on the first $100,000 plus 3.0% commission on the remaining amount. That commission is then split with the buyer’s REALTOR® (3.0%100k+1.5%balance). If the seller’s REALTOR® sells the property directly he or she is typically entitled to the entire 6%100k+3%balance commission, or $27,000 on a $800,000 home.
With a Flat Fee MLS® package, also known as a ‘Mere Posting,’ you get the exact same powerful MLS® exposure as a ‘Full Service’ listing; however, you take on some of the work yourself including coordinating REALTOR® viewings, showing the property to perspective buyers, obtaining feedback, receiving and negotiating offers, and handling condition removal such as inspection. Essentially what a ‘Mere Posting’ amounts to is a For Sale by Owner (FSBO) with MLS® System exposure. After the home is listed, the homeowner takes control of the selling process.
With the Flat Fee MLS® package you have three opportunities to save:
1. You save money on the listing portion of the commission. The up-front cost is $899+tax to have your property listed on MLS®. Upon accepting an unconditional offer of purchase and sale, a brokerage & board fee of $849+tax payable to Fair Realty applies to cover conveyancing costs and preparation of documents for your lawyer. This is a fraction of the listing portion of a commission which may cost 3.0%100k+1.5%balance.
2. You set how much co-operative commission you want to offer buyers’ REALTORS®. The minimum is $1; however, you may choose to offer something like 1.5% or an absolute value such as $5,000 or $10,000. The amount you choose to offer to REALTORS® showing your property is a strategic decision and it can be changed throughout the listing at no extra charge.
3. You can sell directly to a buyer NOT working with a REALTOR®. In this scenario you do not pay a co-operative commission offered to REALTORS®. If you factor in GST, this equates to $20,000 in saving on a $600,000 home.
*Upon accepting an unconditional offer of purchase and sale, a brokerage & board fee of $849+tax payable to Fair Realty applies. If a REALTOR® was used by the buyer(s), the co-operative REALTORS® commission you have specified is also payable. ^Flat Fee price does not include cooperative REALTORS® commission (minimum $1).