Why flat fee MLS Sellers in Florida don't sell
Insights from a flat fee listing broker
You might be asking yourself why I would choose this negative title for my blog. Unfortunately the question originates from a certain reality.
Many sellers-whether listed flat fee in the MLS or with a full-service agent-have difficulty selling. My company lists homes in Orlando, Tampa, Miami, Jacksonville, Ft. Lauderdale and just about every Florida city. No matter what area a property is located, the same always holds true: some sellers sell while others sit and wait, wait, wait.
I spend my days negotiating for many of our flat fee sellers (ADDvantage Plus, our contract-to-close flat fee MLS listing plan) and we run a state-of-the-art flat fee listing service. I believe I have a comprehensive point of view on this topic and would like to impart my insight to sellers who might benefit from it.
Many sellers use flawed reasoning when pricing a home in Florida's competitive market. The 5 most common examples are:
- Possibility Pricing: Price or value is not set by a seller. Rather, it is established by market conditions. Wishful thinking does not qualify as solid methodology for determining a listing price.
- Misunderstanding Market: In a seller's market, buyers justify paying more for a home because in a year they rationalize that prices will appreciate. In a buyer's market, buyers pay less than the market price because they believe in a year prices may decline.
- Holding onto History: What was isn't anymore. Many sellers still talk about their neighbor that sold in 2005 or comps from 2006 or 2007. Or, that they have reduced their price $50,000. Buyers don't care where prices were; they care about where they are today.
- Relocation Rationale: Some sellers that are moving out of state equate what it cost to buy property in another state with what their home in Florida should sell for. Market value differs from state to state and sellers need to compare sales data in their immediate vicinity.
- Equity Enthusiasm: Many sellers are stuck in the belief that their home is worth what homes were selling for in 2004-2006 when the market was unrealistically inflated (“The bubble”). Many sellers who purchased during that time are actually now in a negative equity position. We are just now seeing 2002 prices again. For example: A seller bought a home on the water in 2000 for $500,000. A generous and optimistic appreciation rate would be 5% per year. This would mean the home is now worth about $550,000 on a good day. However, perhaps in 2004, the seller saw similar homes selling for $750,000. They erroneously believe that they should be listing in that price range now even though those prices are now obsolete.
How to price a home and get better results using flat fee MLS in Florida
- Price the home above the buyers and below the sellers. Price it with little to no room to negotiate or you will get few showing and no offers.
- Use ADDvantage Plus™ flat fee listing program to get more showings. It works.
What type of seller is currently successful in Florida?
I find our ADDvantage Plus™ sellers are doing the best for four reasons:
- ADDvantage Plus sellers get more Realtor® showings because they are listed in the MLS as an “Exclusive Right of Sale” listing...no Realtor® boycotting the listing because it's Exclusive Agency/flat fee.
- ADDvantage Plus™ clients get a professional edge because they never talk to agents, since we schedule all showings and our metal sign looks like a full-service real estate company…not flat fee.
- ADDvantage Plus™ clients don't negotiate for themselves as we handle every offer and all negotiations and contract coordination right through closing.
- ADDvantage Plus™ flat fee clients pay $799 up front and $500, saving thousands compared with a 6% listing.
