Limited Service. Is it true you get what you pay for?

Bam!!! Shot me a discounterMy last post had some interesting comments about Limited Service Listings. Here’s a portion of my favorite one:

“I can’t understand limited Service at all. It’s stupid to say the least! Wreckless at the worst. Just plain neglegent at best. Limited service implies low ball commission. Either list for full service or let em go!”

It’s my opinion that the consumer SHOULD have choices as one size does not fit all. In addition to the Traditional Real Estate Company here are a few of the more popular choices that a consumer has.

Internet Companies: This business model is basically a virtual Real Estate Brokerage. Usually they charge less commission and offer less service than a traditional Real Estate Company. These types of businesses may be a good choice for an educated consumer. I have sold many homes sight unseen over the Internet. All were my own listings and I was able to pass a savings onto my Seller which in reality saved the Buyer money because the Seller was able to accept a lower purchase price. These ABMs normally offer an incentive to the Buyers by way of a commission rebate and may offer the Seller an incentive by charging less. Redfin.com is a good example.

Buyer Rebate Company: These companies usually concentrate their efforts on working with Buyers. This could be in an Agency (Fiduciary) capacity or in a non-agency relationship (Transaction Brokerage). Their business plan is to entice Buyers to work with them by offering a rebate or credit at time of closing. They may very well offer the same Buyer services as a Traditional Brokerage. It’s a numbers game. Lower gross commissions mean they have to do more business. By being on the Buyer side only, they may have lower expenses, since they are not in the business of marketing listings. It puts them in a good position to pass some of this savings on to the Buyer. In my opinion, this too is a viable business plan and has a legitimate place in the market. The downside to this business model is that they are very much dependent on a Traditional Brokerage offering “full” co-broke commissions. If we didn’t they would have a hard time surviving. A good example is Buyer Rebates Realty.

MLS For A Fee or Limiteed Service: This model is exactly what the name states. They will list your property in the MLS for a fee. Normally it is a very small fee and then you can purchase additional services separately or as part of a package. Fees are normally paid in advance. This type of company makes money off the Buyers. The listings are the “bait” and the Buyers are the “catch”. The business plan is to get as many listings as they can get to attract Buyers. Normally, in addition to paying the flat fee the Sellers are also required to offer a co-broke to the Selling side. If you like working with Buyers this could be a very profitable business. Some offer full service to the Sellers some offer very limited to no service to the Sellers. For a knowledgeable Seller, that has the time to do the work, this may very well be a good choice. But again, this business model depends on a “full” co-broke being offered to make money. FlatFeeListing is a very good example.

Now folks, you’re probably wondering why I’m giving attention to these ABMS(Alternative Business Models) and why am I giving them links from my Blog. Well why not? I’m not threatened by them nor am I competing against them. I firmly believe the consumer should have choices. I believe in a free economy and I believe these ABMs have just as much right to do business their way, as I do, to do business my way. I offer full service and bring a lot of value to the table. My customers know that and are willing to pay me fairly for what I do. I charge a fair rate for my services. I’m not the cheapest and I’m not the most expensive. My rate/fee/commission is just right for what I bring to the table. 

So here’s the deal. Why not let the consumer decide who to work with based on THEIR needs. Isn’t it supposed to be about them? What say you? 

Are you a Florida REALTOR(R) looking for a change? Check it out. http://TTRealtyNet.com

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