To be honest, one of my friends listed his home with a flat fee company that was located in California. California? Yep. So obviously it started the wheels turning and I saw a different perspective on it.
Then a few months later a woman called asking if I would do flat fee for her daughter who was a mortgage officer. I listed my first flat fee and she sold it in 2 days. From there I thought this would be a good thing for FSBO’s. If they were ready to sell on their own then flat fee should be right for them.
Strangely a lot of them took my full representation service. I guess it can be more overwhelming than people think at first. Since then my flat fee clients have been mortgage professionals, builders, lawyers and investors. Some get an accepted offer in days, weeks or never just like any other listing.
Flat fee as an option by itself isn’t for everyone. Some people could get themselves into more trouble than they think. That is why I was lucky that everyone had some kind of background with either the earnest money agreement we use or contracts themselves. I would have turned down anyone who I didn’t think could handle it.
This is why I added hourly services at the beginning of this year. It seems like it a difficult jump from a flat fee of $495 to 1% for full representation and I was concerned that someone would forgo the extra commission getting themselves into trouble.
I can’t imagine any agent anywhere selling their home for 5-6%, or a builder or a lawyer or even an investor. Different people have different levels of skills and needs. Flat fee listings only account for a very small part of my actual business but I think it may well grow in the coming economy.