The Hidden Costs Of Selling Your Home The Flat-Fee Way
Getting your home sold in just one day with multiple offers might sound too good to be true, but these days there are many start-ups and tech-backed companies promising to do just that. They guarantee a sale in a certain time period, buy the house directly from you, or offer a platform where you accept and review online bids from buyers.
It sounds like a dream come true, right? Unfortunately, it doesn’t always work out and has some serious hidden costs.
Hidden Cost #1: Low-Ball Offers
The main reason why most sellers choose to list with a real estate agent is to maximize the value of their homes, and the data backs this up. According to NAR, the average “For Sale By Owner” sales price is significantly lower ($185,000) than the average price of a home represented by an agent ($245,000). This is because a real estate agent who is immersed in their local market understands how to price a home properly, utilize staging to show off the home’s best features, make expert recommendations on any fixes that could be made to get a higher value, and negotiate with the buyer’s agent so you don’t end up cutting the price in order for the buyer to commit.
For flat-fee platforms, the offers you receive depend on how many people can actually see your home. One reviewer reported getting few showings and only receiving one offer, which was well below other properties in her neighborhood.
“I got fewer showings than any other house and the only offer I got was WELL below my [asking price]. Other houses in the neighborhood (smaller and less maintained) sold for over my asking price with other agencies.”
- Purplebricks Customer
When companies have a failing or non-existent marketing plan, they are left with one option when your listing becomes stale. Price drops.
With the proper price and proper exposure, every house will sell. Most flat-fee services do a poor job at getting your listing the exposure it needs, so when you listing is sitting on the market, the only assumption that can be made is that the price was wrong. In fact, a lot of times the problem is that the property didn't have the right exposure, and the price was actually bang on!
“Even lowering the price multiple times has made no difference in the interest.
We have had nothing but problems from the day we listed.”
- Property Guys Customer
Hidden Cost #2: No Human Contact
If you’re the type of person who lets every call go to voicemail, this problem can sound like a positive. But consider the fact that when you sell your home, you’re probably going to want someone to call if your listing contains a bunch of errors and takes six weeks to show up on their website. Even worse: when any messages you send about those issues go unanswered.
“They don't call back. They didn't take down the information properly. They don't really care. The customer service is national. Nothing local.”
- Purplebricks Customer
Hidden Cost #3: Unexpected Surprises
The main issue a seller will run into is a lack of one-on-one representation. For example, when you list with a service like Purple Bricks that promises to sell your home for a flat fee, you’re matched with an “area expert” who may be stretched for time.
“My property was on the market for 90 days and had just 6 viewings. I withdrew my property and instructed [a local realtor].
They listened to the feedback and took on board that the price was too high. Within 11 days they had shown a total of 36 people around my property and 3 offers came in. My house has now sold.”
- Purplebricks Customer
Another seller wasn’t so lucky. Over the course of eight weeks, their first agent was fired, then the next four quit within 1-2 weeks of the other, and another never even called.
Further, a real estate agent markets your home beyond simply hanging a sign in front and placing the listing on a website. When going the alternative route, if you don’t have an “expert” who is willing to do more than upload photos, you could end up having to do things like distribute flyers about your own home.
When it comes to services that offer to buy your home outright, the relationship between you and the company can be minimal. One seller’s Opendoor experience highlights how this can become an expensive problem. The roof repair experts hired by the company left her home without completing the project. She was later charged $21,000 for the repairs and said that she was not able to negotiate with the company.
“On top of the $26,000 upfront fee, they tried to charge me $21,000 for ‘repairs’. They refused to negotiate anything, and now I have to pay an attorney for the ‘assessment’ process.”
- OpenDoor Customer
In the end, the “Flat-Fee” way of selling a home isn’t for everyone. If you’re thinking about making your next move, start by getting in touch with a real estate agent to learn more about what you can expect from the selling process.