Flat Fee MLS Florida – The Market is Hot Again – Is Your Buyer?

Monday, July 28, 2008, 8:45AM

By: Keith Gordon

The Florida real estate market is hot again with the new lower prices. Buyers are making offers and sellers need to be up on their countering skills and the current trends of the mortgage market.

Flat Fee MLS sellers traditionally represent themselves, so being well informed is a must. At ADDvantage, we offer a flat fee MLS program that does take care of all contract negotiations and due diligence; it's called ADDvantage PLUS™.

One of the most important elements of due diligence when reviewing an offer/contract is examining the buyer. There are 4 types of due diligence that a seller can request of their buyer or Realtor® representing the buyer.

  1. Pre-qualify Letter: a cursory look at the buyer's financial history and the least effective form of determining whether a buyer is qualified or not.
  2. Pre-Approval Letter: a more trusted source for determining a buyer's financial capabilities. Here, the lender verifies the buyer's financial information but is not reviewed by the lender's underwriters.
  3. “Buyer Ready”, “Conditional Approval”, or “Pre-Commitment” takes the pre-approval process one step further by having the buyer's file reviewed by underwriting. A Pre-Loan Commitment is issued pending certain events or conditions such as: (i) appraisal; (ii) title policy/clear title; (iii) flood elevation; (iv) home owners insurance. It should take a lender no more than 2 days to issue a Conditional Approval.
  4. Loan Commitment is the final step. The lender issues this after these 4 conditions are removed: (i) appraisal; (ii) title policy or clear title; (iii) flood elevation; (iv) home owners insurance. This means the lender is ready to close.

Buyer seeking mortgages as of July 25, 2008:

Conventional loans for single family owner occupied require a 15% down payment.

FHA loans for single family owner occupied require a 3% down payment.

Conclusion: It would be advisable to get a conditional approval from the buyer(s) at the time of an offer or within 5 days of effective date (last date on contract or the date mutually agreed as the start date for all contingencies, inspections and closing) with the seller having the right to cancel contract with buyers and return all deposits if buyer cannot provide seller with a Conditional Approval letter from a major lender.

Flat Fee MLS listings do save sellers money but there are many moving parts to a flat fee listing.

Below are a few key points that Florida flat fee MLS sellers should know before listing with any broker:

  1. Make sure you get all buyer leads (we call these “unrepresented buyers”) from the flat fee broker; Ask what happens to buyer leads from sources such as Realtor.com.
  2. Ask how buyer leads get to you including phone calls and email inquiries.
  3. Ask what the hours of operation are.
  4. Review the listing agreement in great detail before listing.
  5. Ask how changes are made and if there is a cost.
  6. Ask if there is a cancellation fee if the MLS listing is withdrawn before the listing term is up.