Click a state on the map to learn about state laws or regulations affecting competition in real estate. Add a Flat Fee MLS Listing in Your Local MLS .

Florida consumers who wish to utilize the MLS (Multiple Listing Service) for a flat fee need to be cognizant of the fact that a growing number of online FSBO marketing firms selling flat fee MLS to Florida consumers do not maintain a Florida brokerage license. These companies might be engaging in unlicensed activity in violation of chapter 475, Florida Statutes, given the fact that they are soliciting real estate services from Florida consumers/sellers for a fee. Search for a Florida real estate licensee.

The following cases stand for the proposition that foreign real estate brokers are not authorized to take in the procuring of buyers and/or sellers for compensation in the state of Florida without first obtaining a Florida real estate broker’s license.

1) Where a foreign broker acting on his own procures a client from his own jurisdiction to purchase property in Florida, he is not entitled to collect a fee. Paris v. Hilton, 352 So.2d 534 (Fla. 1st DCA 1977). In Paris, this court held unenforceable a promissory note given by the Georgia purchaser to a Georgia broker because the note was given as consideration for brokerage services performed in Florida in connection with the sale of Florida land, the Georgia broker not being licensed in Florida

2) However, where a foreign broker, acting as cobroker with a Florida broker, procures a client within his own jurisdiction, the fact that part of his services were performed in Florida will not preclude him from enforcing his contractual right to a fee if he has performed good faith services within his own jurisdiction. Tassy v. Hall, 429 So.2d 30 (Fla. 5th DCA 1983).

3) Where one cooperating broker is under a disability to recover a commission because of being non-registered, this infirmity affects the validity of the entire contract and no recovery is permitted. Harris v. McKay, 176 So.2d 572 (Fla. 3rd DCA 1965).

4) CITE: 502 So.2d 1317 PREVIEWS, INC., a Florida corporation, and Guy Eberhardt, Appellants, v. J.T. MURFF, Sr., J.T. Murff, Jr., and Murff and Company Inc., d b a M-K Ranches, Appellees. … “We do not have a situation where the foreign broker performed good faith services within his own jurisdiction. On the contrary, this foreign broker s activities were directed towards the solicitation of a purchaser in Florida.  The inescapable conclusion is that Eberhardt engaged in brokerage activities in this State within the meaning of Section 475.01(1)(c). Inasmuch as Eberhardt s activities were in violation of the laws of this State, his cobrokerage agreement with the Florida broker does not furnish a basis for the enforcement of a right to a fee for his services. That is, Eberhardt has not brought himself within the above quoted provisions of Section 475.25(1)(h). Were we to hold otherwise, we would, without justification, be providing a way by which Florida brokers could sublet their Florida licenses to foreign brokers. Neither is Previews, Inc. entitled to a fee.”

This matter is before this Court on Plaintiff Vicki V. Busby’s (“Busby”) appeal of the district court’s denial of class certification to a class of plaintiffs seeking damages arising out of Defendant JRHBW Realty, Inc.’s, d/b/a RealtySouth (“RealtySouth”), alleged violation of Section 8(b) of the Real Estate Settlement Procedures Act (“RESPA”), 12 U.S.C. §§ 2601, et seq. AFFIRMED IN PART, REVERSED IN PART, VACATED AND REMANDED.

On May 26, 2004, Busby, the putative class representative, purchased a home in Jefferson, Alabama, using a federally related home loan. Busby employed a RealtySouth real estate agent who earned a sales commission based on a percentage of the purchase price. This brokerage commission, paid by the seller, was lowered from 3% to 2.5% in order to encourage the seller to accept Busby’s offer. During the closing and settlement, RealtySouth charged Busby an Administrative Brokerage Commission fee of $149 (the “ABC Fee”). The closing attorney is Ms. Busby’s current counsel. He explained the closing documents and the HUD-1 statements to Busby 2 and engaged in discussions with her concerning the transactions.

Initial complaint.
Appeal from United States District Court for the Northern District of Alabama

Traditional brokers face increasing competition from fee-for-service brokers who charge only for those services the consumer actually buys. Consumers with the option of choosing a fee-for-service broker can save thousands of dollars by purchasing only those services they need.

A number of states have enacted laws that require consumers to purchase brokerage services they may not want, with no option to waive the extra items. These so-called “minimum service” laws diminish consumer choice and raise the cost of selling a home.

Link: Learn about the laws or regulations affecting competition in your state by clicking here.

Source: National Association of Realtors

On May 27, 2008, NAR and the U.S. Department of Justice reached a favorable settlement, concluding a two-year DOJ investigation (followed by two and a half years of litigation) regarding NAR’s multiple listing policy as it pertained to the display of listings from the MLS on brokers’ virtual office Web sites, or VOWs.

What the settlement accomplishes

The proposed terms (PDF 28K) are a win for NAR, REALTORS®, and consumers, and confirm that MLS members must be actively engaged in real estate brokerage (PDF 32K) by actually helping people buy or sell homes.

This will ensure that MLSs are used for what they were originally intended to do — to help real estate professionals find buyers for people who want to sell their homes. NAR has also agreed to adopt a revised Virtual Office Web site policy (PDF 36K) that NAR will request MLSs to adopt.

Final Judgment Approved - DOJ-NAR (PDF: 743KB)

Final Settlement Details

Cover Letter - Notice of Actions Required by Association Executives and MLSs (PDF: 23KB)

2008 Virtual Office Website Policy (PDF: 109KB)

Model VOW Rules for MLSs (Microsoft Word: 45KB)

Amendment to Section 3 or 4 of Model Bylaws (PDF: 64KB)

Certification Form - Note: Form must be signed (PDF: 86KB)

Frequently Asked Questions (PDF: 65KB)

Flat fee MLS is a term used to describe a practice in the real estate industry in which realtors place pertinent information about a property for sale into the database of the local Multiple Listing Service (MLS) for a set fee or dollar amount as opposed to a commission based on the contract selling price of the property. The seller’s home is essentially listed in cyberspace for a flat fee (i.e. cyberspace home selling).

The arrangement between the real estate broker and the property owner (”seller”) typically requires that the parties enter into an exclusive-agency listing agreement, a listing contract under which the owner appoints a real estate broker as his or her exclusive agent for a designated period of time to sell the property, on the owner’s stated terms. The owner reserves the right to sell without paying anyone a commission if he or she sells to a prospect who has not been introduced or claimed by the broker. In return, the seller will be required to pay the listing broker a flat fee for his/her limited services provided. This essentially reduces contractual risks between the seller and the listing broker, since the seller is free to sell (or otherwise transfer title to the real property) to any person procured by the seller (i.e. someone who is not represented by a “Buyer’s Broker”) without having to pay a brokerage commission or penalty. The net effect is to limit brokerage services provided, thereby giving the seller greater control and flexibility at significantly reduced costs.

In this instance, the flat fee that the seller pays replaces the much higher listing fee, usually 2.5% to 3.5% of the sales price, that is otherwise paid if the seller were using a full service listing broker in his/her local area. As a result, the seller will not be required to pay the listing broker additional service fees that are typically based on the contract selling price. The seller will, however, be required to pay a cooperating brokerage fee, usually between 1.5 to 3.5 percent, stated as a percentage of the total purchase price. The title agent conducting the closing will be be instructed, pursuant to the purchase and sales agreement (or listing agreement), to disburse any fees due to the cooperating broker.

The listing fee for a “Flat fee MLS” can range anywhere between $99-$699, depending on the area. Real estate brokers have traditionally charged sellers anywhere from 3% to 7% of the contract selling price, which is typically split between two brokers involved in the transaction or two agents/brokers from the same company. MLS Rules require that real estate agents cooperate and pay compensation to any broker who brings them a qualified buyer who is ready, willing, and able to purchase the real property.

In all cases, where the property is “listed” in the MLS for a flat fee, the seller must offer compensation to a “Buyer’s Agent”, typically 2% to 3.5% of the selling price. This fee is paid to the cooperating broker (or agent) for producing a bidder or purchaser, when the transaction results in a successful sale and closing of escrow of the property.

The MLS (Multiple Listing Service) is a computerized database that enables realtors to display real time, real property listing information, so that authorized participants, as well as the public, can view and evaluate listings. The MLS serves as a means by which authorized participants (listing brokers representing sellers) make blanket unilateral offers of cooperation and compensation to other authorized participants (co-operating brokers representing buyers). MLS participants actively show and sell homes that are listed by other participants (member realtors). This process provides the basis upon which the Broker, who is working with the buyer and referred to as the Cooperating Broker, earns a commission. A cooperating broker’s entitlement to compensation is determined by the broker’s performance as procuring cause of sale or lease. 75% of all properties sold are sold through the MLS.

What is the Multiple Listing Service (”MLS”)?

The MLS (”Multiple Listing Service”) is a computerized database that enables realtors to display real time real property listing information, so that authorized participants, as well as the public, can view and evaluate listings. The MLS serves as a means by which authorized participants (listing brokers representing sellers) make blanket unilateral offers of cooperation and compensation to other authorized participants (co-operating brokers representing buyers). MLS participants actively show and sell homes that are listed by other participants (member realtors). This process provides the basis upon which the Broker, who is working with the buyer and referred to as the Cooperating Broker, earns a commission. A cooperating broker’s entitlement to compensation is determined by the broker’s performance as procuring cause of sale or lease. 75% of all properties sold are sold through the MLS.

What savings will I realize using a flat fee home selling discount broker?

Paying a flat fee for an MLS listing means more equity in your pocket! All the advantages associated with an MLS listing will be available to you at a fraction of the cost. As a result, there will be no additional listing fees owed specifically to Brokerless. Typically, those fees run from 2.5% to 3.5% of the selling price, and are normally paid to the listing broker at closing. Fees vary by State, County, and Broker. Consumers who choose a limited service option can realize savings of up to thousands of dollars.

How does the Brokerless home selling system work?

The flat fee that you pay replaces the much higher listing fee, usually 2.5% to 3.5% of the sales price, that you otherwise would pay if you were using a full service Listing Broker in your local area. As a result, you will not pay additional fees that are typically based on the contract selling price.You will, however, be required to pay a cooperating brokerage fee, usually between 1.5 to 3.5 percent, stated as a percentage of the total purchase price. The title agent conducting your closing will be be instructed, pursuant to your purchase and sales agreement (or listing agreement), to disburse any fees due to the Cooperating Broker.

What type of listing agreement will I be required to sign?

An exclusive agency listing agreement is the most commonly utilized instrument when using a discount broker. The owner appoints a real estate broker as his or her exclusive agent for a designated period of time to sell the property, on the owner’s stated terms, for a commission. The owner reserves the right to sell without paying a commission if he or she sells to a prospect who has not been introduced or claimed by a specific broker. Most commonly used with Flat fee MLS listings.

This essentially reduces contractual risks between the seller and the listing broker, since the seller is free to sell (or otherwise transfer title to the real property) to any person procured by the seller (i.e. someone who is not represented by a “Buyer’s Broker”) without having to pay a brokerage commission or penalty. The net effect is to limit brokerage services provided, thereby giving the seller greater control and flexibility at significantly reduced costs.

Will I need to offer compensation to a buyer’s agent?

Yes. In all cases, where the property is “listed” in the MLS for a flat fee, the seller must offer compensation to a “Buyer’s Agent”, typically 2% to 3.5% of the selling price. This fee is paid to the cooperating broker (or agent) for producing a bidder or purchaser, when (and if) the transaction results in a successful sale and closing of escrow of the property. As previously stated, you will not be required to pay a commission to a buyer’s agent if you sell to a buyer (or prospect) who has not been introduced or claimed by a specific broker.

Can my property be listed on the MLS for longer than my listing agreement calls for?

Yes. However, listing agreements must have a definite expiration date. Therefore, additional paperwork will be required to extend the original period contemplated in the agreement.

Who will be in control of my Flat Fee MLS listing?

You will be in control all showings, buyer inquiries and negotiations. The listing broker may assist with paperwork.

What are the duties of a limited service flat fee mls listing broker?

The duties of a real estate broker will strictly depend on the laws of the state in which the property is located. If your state does not impose minimum service requirements, then the duties will be limited to the following:

As a real estate licensee who has no brokerage relationship with you, (insert name of Real Estate Entity and its Associates) owe to you the following duties:

1. Dealing honestly and fairly;

2. Disclosing all known facts that materially affect the value of residential real property which are not readily observable to the buyer.

3. Accounting for all funds entrusted to the licensee.

What is an AfBA notice?

AfBA stands for Affiliated Business Arrangement. This is to give you notice that [referring party] has a business relationship with [settlement services providers(s)]. [Describe the nature of the relationship between the referring party and the providers(s), including percentage of ownership interest, if applicable.] Because of this relationship, this referral may provide [referring party] a financial or other benefit.

How soon will updates appear on realtor.com?

MLS Listings are updated within 24 hours of any changes being made and are available for public viewing on www.realtor.com and your local MLS 24/7.

How do I find property that is listed for sale on Realtor.com?

Visit www.realtor.com

How many people will get to view my property listing?

Every month millions of unique visitors searching Realtor.com will be able to view your listing. Realtor.com sends out numerous feeds to other major internet sites that display MLS listings as well.

May a real estate agent rebate a portion of the agent’s commission to the borrower? If so, how should the rebate be listed on the HUD-1?

According to HUD, yes, real estate agents may rebate a portion of the agent’s commission to the borrower in a real estate transaction. The rebate must be listed as a credit on page 1 of the HUD-1 in Lines 204-209 and the name of the party giving the credit must be identified. Real estate agent or broker commission rebates to borrowers do not violate Section 8 of RESPA as long as no part of the commission rebate is tied to a referral of business.

Are real estate “broker referrals” a violation of RESPA Section 8?

No, according to HUD, payments pursuant to cooperative brokerage agreements between real estate brokers are not a violation of RESPA Section 8. See Sec. 2607(c)(3)

May I require that the buyer/borrower use a particular title company as a condition of sale?

No. 12 U.S.C. 2608 RESPA Section 9 states:

(a) No seller of property that will be purchased with the assistance of a federally related mortgage loan shall require directly or indirectly, as a condition to selling the property, that title insurance covering the property be purchased by the buyer from any particular title company.

(b) Any seller who violates the provisions of subsection (a) of this section shall be liable to the buyer in an amount equal to three times all charges made for such title insurance.

According to HUD, however, section 9 of RESPA does not apply if the seller pays all charges associated with insuring the title to the real property.

What are my duties to the buyer regarding not readily observable known facts, which would materially affect the value of the residential real property?

The seller has a duty to Disclose all known facts that materially affect the value of residential real property and are not readily observable to the buyer

What do I need to understand regarding the Lead-Based Paint Hazard Reduction Act of 1992?

Most importantly, it pertains to residential dwellings built prior to 1978. The act requires that Before ratification of a contract for housing sale or lease, sellers and landlords must comply with certain HUD requirement.
Lead Disclosure Rule and EPA Information Pamphlet

What documents will I need to execute at closing?

At closing, the parties will execute a number of documents, prepared by their closing agent, including the deed (a.k.a the instrument of conveyance). The deed is a legal instrument used to convey certain rights an individual has to property to someone else. Deeds come in various forms. The most commonly used deed is the warranty deed. With this type of conveyance, the grantor (seller) fully warrants that the title to the real property is free and clear of all liens and encumbrances and will defend against the lawful claims of all persons whomsoever.

Will I be required to hire an attorney?

There is no legal requirement to hire an attorney. However, many customers will hire a real-estate lawyer to protect their interests. In most regions of the country, a title company (agency) can handle every aspect of a real estate transaction, including the preparation of documentation. A real estate lawyer can act as both your attorney and title agent (i.e. one who issues title insurance policies and conducts closings).

What types of charges will appear on the HUD-1?

Real estate transactions involving federally related mortgage loans involve three basic categories of services and related charges in order to close escrow. These charges appear on the Uniform Settlement Statement (as defined in 12 U.S.C. § 2603) and include:

(1) title insurance charges in connection with establishing and transferring ownership (i.e., title search and examination fees, premiums charged in connection with issuing a lender’s and/or owners title insurance policy (including endorsements), and the costs associated with conducting the closing)

(2) amounts paid to the city and/or state and/or local governments for establishing and transferring ownership (i.e., documentary stamp and intangible taxes on both the note and mortgage, including all fees associated with recording the mortgagee’s interest in the property), and

(3) fees associated with originating a new loan (i.e., survey fees, appraisal fees, tax service fees, credit check fees, loan document preparation fees, notary charges, loan origination fees, loan commitment fees, loan processing fees, hazard insurance fees, flood certification fees, interest prepayments, and lender inspection fees). The majority of these services, however, will not be provided and performed until closing.

Who pays for Title Insurance at closing - Buyer or Seller?

Who pays for title insurance (or any portion thereof, including related title services) usually depends on the location (i.e., county) of the real property. Although the allocation of costs involved in any real estate transaction are negotiable, local custom strongly influences which party, buyer or seller, pays for both the owners and lenders title insurance policy, including related charges. See Florida Title Insurance Rates

Florida Flat fee MLS is a term used to describe a practice in Florida in which realtors place pertinent information about a Florida property for sale into the database of a Florida local Multiple Listing Service (MLS) for a set fee or dollar amount as opposed to a commission based on the contract selling price of the property. 

Florida law requires brokers to present all offers, but allows consumers to waive that requirement. This written waiver preserves consumers’ ability to choose the brokerage services they want, including MLS-listing-only services or other à la carte services. See No Brokerage Relationship Notice.

At the time of contact between the seller and the Florida flat fee MLS listing broker, disclosures should be provided to the seller stating that the Florida real estate licensee has a “no brokerage relationship” with the seller and will only perform limited services.

Learn more about flat-fee MLS in Florida:

• Broker discounts: Discount Brokers Can Make Selling a Home Less Costly
• Rebates: Rebates Make Buying a Home Less Expensive
• Florida law allows the consumer to search for a Flat fee MLS broker and Go FSBO!
• Wipe out the listing brokerage commission and save thousands.
  
• Stay in control by eliminating certain contractual risks that are present when using a full service real estate broker.
• Advertise your home as a (FSBO) for sale by owner seller.
• Deal directly with a licensed broker in your state. Fees vary by State, County, and Local Broker.
• Click here to learn about other state laws or regulations affecting consumers’ rights as a seller of real property
• MLS Listings are updated in real time and are available for viewing on www.realtor.com and your local MLS 24/7.

Related documents on the Internet:

• Florida Statute Title 32 § 475.278 (2005) requiring brokers to perform minimum services, but allowing consumer waiver

Florida Real Estate Commission
call.center at dbpr.state.fl.us
1940 N Monroe St Tallahassee, FL 32399
Phone: 850-487-1395

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