I Hired A Flat Fee Broker
… And Nothing Happened
Nothing happened!
Really. The real estate Gods didn’t shun me, I didn’t have 5 years of bad luck, and the house did not sell. So nothing happened, sort of.
Let’s take it back to summer 2015. Adam and I moved back to Denver from a 3 ⅕ year residency in Oregon. We had a booming business back in Portland, Or. But we missed Colorado and we made a decision to uproot our family of 5 (plus the furries) and launch a replica of our real estate investment company in Denver. Good ol’ Colorado! It is good to be home.
Personally, it was an easy transition. We were moving back into the home we raised our boys in for the first few years of their lives. We had friends here, a community and our goals aligned with the growing city of Denver. The mechanics of running a real estate redevelopment company are the same in any location. To get a head start we opened a Colorado branch of our real estate redevelopment company and bought our first Denver fixer-upper while living in Portland. Adam flew back and forth a few times. Got the rehab started and left it in the GC’s hands, while we were working to tie up all the loose ends in the PNW.
Center Street house was a straight forward project. The typical kitchen, baths, paint, floor, reconfigure a master bath, move a wall or two, refinish the basement, update electrical and plumbing, get rid of the ugliest stone fireplace ever known to man. You know, some lipstick and voila, it’s a pretty little house once again. The construction took roughly four months, but when it was ready to hit the market I was not ready to sell it.
At the time I was an experienced real estate agent and realtor in the state of Oregon. The primary role I held in our business was identifying, purchasing and selling investment properties. In the middle getting our Oregon home ready for the market, surviving as a parent, packing up our worldly possessions, and working, I straight up failed to study for my Colorado State exam.
Failed.
Big Ol’ F! Didn’t do it.
So here we were with a house to sell in Denver, and some decisions to make. After years in the business both Adam and I knew a few things.
Number One. You don’t need an agent to buy or sell a house, but to sell a house MLS access is necessary. MLS is exposure. Zillow is meeh, and you can FSBO and pray all day long. However, if you are serious about selling a house MLS is the golden goose. MLS listing gets your house in front of buyers who are serious, able and willing to buy. Not just neighbors looking for newest reno ideas.
Number Two. Spring is the hottest and best time to sell a house in Denver. And frankly, the doors of the spring selling season were closing. Completely behind in my studies, I was weeks away from getting licensed, finding a brokerage to hang said license, and being able to list the house for sale on the MLS. As business owners, hard decisions were in front of us. The holding costs of a high-interest fix and flip loan were substantial and mounting, while the hottest home selling days of the year were flying buy. Our profit margin was shrinking and the pressure was on.
The original profit estimate counted on me, the in house real estate agent, selling the house and keeping the listing side commission. Hiring a listing agent meant our net profit would dwindle in half. The house was staged, professional photos were done, and a marketing plan ready to execute. The only thing that was missing was MLS exposure. The logical next step seamed Flat Fee Listing.
We were thinking the same thoughts you are thinking too.
Real estate commissions are too high.
I am already going to do all the work.
I just want exposure to all buyers.
I want to save money.
As a professional realtor at the time, I agonized over the decision. Reading over the listing agreement, and the litany of duties excluded from broker responsibilities raised red flags I chose to ignore. I was fully capable of handling all those responsibilities the flat fee company didn’t provide. In fact, I do them anyways, and always. “I just need MLS exposure”, I said over and over again.
I bit the bullet and paid the $500 fee. What followed were three long weeks of our pretty little house sitting on the market. In mid-June 2015, a gorgeous renovated well-priced house on the market and crickets guys. Deathly silence from the market. Is our house ugly? Did we make a mistake? Was it a bad decision? Are we going to lose a fortune?
All those are completely natural thoughts, but I didn’t have them. I knew what the problem was, and it wasn't the house. It was my listing agent.
If you know anything about the Denver 2015 spring/summer real estate market you are chuckling right now. Yup, I am laughing about it too, now that hindsight is 20/20. We were the only house for sale in the ½ mile radius but no buyers.
The house was gorgeous.
The price was right.
The location was desirable.It was staged to sell.
The photos were spot on and highlighted the home in the best light.
If you need a fire under your feet or motivation as I do, this did the trick. In those three weeks, I completed what I dragged on for months prior, a real estate agent license in the state of Colorado. Amen sister, Amen!!!!
The day I took over the Center Street listing and terminated the Flat Fee listing agreement was a gorgeous summer day. I said goodbye to $500, plus a wad of pocket change in holding costs. But that is a conversation for another day.
Like magic, the home was under contract within a week and a half and sold in 30 days after.. Man, I am good when I do, what I do!
So what went wrong with the flat fee listing?
…If I planned on doing all the work (which I did).
…And only wanted MLS exposure (which I did).
..Why did the house not sell?
Communication, availability, and urgency. A listing agent regardless of brokerage relationships (listing or transaction brokerage) owns the listing. Part of their job is to market the property. MLS listing is marketing the property. A buyer's agent or a buyer, interested in the house listed for sale has to go through the listing agent to schedule showings, ask questions, present offers, etc. When there is no communication, or a breakdown in communication the sale stops. The flat fee broker would take days to return a phone call or an email. Days to correct items in the listing they inputted incorrectly and this breakdown in communication had buyers and their agents moving on in the hot market.
Once I was licensed it didn’t take long to get the buyers through the door, agents to write up offers. The negotiation skills I acquired throughout the years of practicing sales were the key ingredient to closing the sale at listing price. While the whole experience was very bumpy the lessons learned apply to every home I’ve sold since.
If you are wondering “Would I do it again? Would I hire a flat fee broker or a low fee broker to sell my investment property again? The answer is no. No way, my friend. I would not change the experience I had. We paid for it, and I consider learned lessons paid in full extremely valuable. The full suitcase of experience we carry with us is there for us so we can make better choices and build the lives we dream off.
Life has shown me there are times when saving is prudent, and smart. Other times, investing is more aligned with the outcome I want to have.