Email Alerts of New Listings Provide a Good Reason for Listing Your Home on the MLS

Yes, it’s a seller’s market, and maybe you think you don’t need to hire an agent to put your home on the MLS, but the opposite is true. Take, for example, the listing which was featured in this space last week. For 7 days it was listed as “Coming Soon” on our MLS, REcolorado, during which time it was not visible to non-mem-bers of the MLS (i.e., buyers). But that listing was emailed to over 250 buyers who had email alerts set up by their agents. One of those buyers tagged the listing as a “favorite” and another six tagged it as a “possibility.”

Those numbers, however, only reflect buyers who had included “coming soon” among the criteria that would trigger an alert. After the listing changed from “coming soon” to “active” on the MLS, the number of buyers who were alerted jumped to 720 and two more buyers tagged it as a “favorite.”  When a buyer tags a listing as either a “favorite” or a “possibility,” the buyer’s agent gets an email letting him or her know which client liked the listing and may want to see it when it’s “active” and showings are allowed.

These numbers don’t include the buyers who set up their own alerts on Zillow or other consumer-facing sites, including Redfin. Also, those websites don’t display “coming soon” listings until they have been changed to “active.” Thus, buyers who had agents include “coming soon” as a criterion benefited from a 1-week earlier notice of that listing than did any of those buyers who were setting up alerts on their own.

For buyers wanting the earliest alerts of new listings matching their search criteria, please make this a reason to have an agent set up alerts for you instead of setting up alerts on your own.

Knowing the power of MLS alerts should cause any seller to have second thoughts about selling without an agent. It used to be that sellers could hire a “limited service” agent who would put their home on the MLS for a flat fee (say, $300) without performing any other service, but that is now illegal. The Colorado Real Estate Commission has ruled that there are certain minimum services which must be performed by all listing agents. Those services include exercising “reasonable skill and care,” receiving and presenting all offers, disclosing any known material facts about the buyer (such as their ability to close), referring their client to legal and other specialists on topics about which the agent is not qualified, accounting for the receipt of earnest money, and keeping the seller fully informed throughout the transaction. 

Failure to perform those minimum services could subject the agent to discipline up to and including loss of license, which has caused “limited service” listings to disappear. If an agent offers such service to you, you should report them to the Division of Real Estate.

By the way, the Colorado Real Estate Commission has also ruled that it is the duty of all licensees to report known wrong-doing by other licensees, which their competitors are happy to do. We can be disciplined for not performing that duty.

Studies have shown that homes which are listed “for sale by owner” (FSBO) sell for less than ones which are listed by an agent on the MLS, and you can see why, because the more exposure your home has to prospective buyers, the more showings and offers you are likely to receive. And that difference in bottom line proceeds can far exceed the commission you are likely to pay.

Consider this: whether or not you hire a listing agent, you’re still likely to pay the “co-op” commission to the buyer’s agent, which is typically 2.8%. The  average listing commission (which includes that co-op commission) is now around 5.5%, not the 6% everyone tells you. As a result, the savings you might experience from not hiring a listing agent could be about 2.7%, and that is likely less than the increased selling price you might get from listing your home on the MLS with a true “full-service” agent such as my broker associates and myself.

Note: Some brokerages mislead you by promoting a 1% listing commission, but when they get into your home to sign you up, they disclose that the 1% is in addition to the 2.8% that they recommend as the  co-op commission and is increased further if they don’t earn a co-op commission on the purchase of your replacement home. It is also increased if they double-end the sale of your home, meaning that they don’t have to pay that 2.8% co-op commission to the buyer’s agent.

Such deceptive advertising, to me, is reason enough not to hire such a brokerage, but it may be hard for some people to say “no” to an agent they invited into their home with contract in hand.

Unlike such a brokerage, Golden Real Estate tells you upfront that we reduce our listing commission when we double-end the transaction, and we discount it further when you allow us to earn a commission on the purchase of your replacement home.

That said, our final commission might be only 1% or so higher than what you might pay to a discount brokerage, and our version of “full service” is much more complete than theirs.  For starters, we produce narrated videos tours on every listing. Our video tours are not just slideshows with music or un-narrated interactive tours which can be dizzying and annoying. Our narrated tours resemble an actual showing, where the listing agent is walking you through the house, talking all the time, pointing out this or that feature which may not be obvious otherwise. Are those quartz countertops? Are there slide-outs in those base cabinets?  Is that a wood-burning or gas fireplace? We have sold listings to out-of-towners who only “toured” the home on video, not seeing it in person until they flew into town for the inspection. That’s the power of narrated video tours.

NAR’s ‘Clear Cooperation’ Policy Is a First Step at Eliminating Pocket Listings

A “pocket listing” is a property which the listing agent does not put on the MLS, hoping to sell it himself or get it sold by other agents in his office. It’s not typically in the best interest of the seller, since the property is withheld from the full universe of potential buyers.

The organizing principle of the Multi-List System, or MLS, is “cooperation and compensation.” Every real estate agent working in the public arena needs to belong to the local MLS, because it’s only through the MLS that the agent can show and sell that MLS’s listings and be guaranteed the “co-op” commission displayed on the MLS.

A listing agent, naturally, would prefer not to give a big slice of the listing commission to the “cooperat-ing” broker who brings the buyer. He or she would much rather sell the listing, keeping the entire commission for him or herself. Meanwhile, other agents (and their buyers) are upset when they don’t have the opportunity to show a new listing and submit an offer, especially when there are so few listings on the market, as is currently the case.

The National Association of Realtors (NAR) took up the issue of pocket listings last year when it adopted a policy called Clear Cooperation. Essentially the policy says that if an MLS member advertises or promotes a listing in any way — including putting a “coming soon” sign in the yard or mentioning it on social media — that listing must be entered on the MLS within 24 hours. It can be listed as “coming soon” on the MLS, during which time it can’t be shown, including by the listing agent. Once it is shown, it must immediately be changed to “active,” allowing all MLS members to show and sell it.

Unfortunately for sellers, who are the big losers with pocket listings, this policy will never be completely effective. That is evident from the fact that over 7% of listings, by my count, are entered on the MLS only after they are sold. Unless a home remains active on the MLS for 3 or 4 days, it’s unlikely that all potential buyers will have had a chance to compete for it.

You may recall the featured listing in last week’s column. It was listed at $375,000, a price consistent with comparable sales, and we received a full-price offer on the first day. Our policy, however, is to get our sellers to wait four days before going under contract. We had 30 showings and received six offers by day four. By being transparent about the offers received, we were able to bid up the property by  more than $55,000 by day four. We did get an offer $35,000 over listing price on day two, but we waited. Our seller benefited from waiting 2 more days.

Sadly, most listing agents haven’t adopted this practice. They sell their listings too quickly, potentially costing their sellers thousands but also frustrating would-be buyers who might pay more. 

I have calculated that in addition to the 7% of listings being sold with zero days on the MLS, 15% are sold after only 1 or 2 days on the MLS.

One technique for minimizing showings by other agents has been to make a listing “active” but block showings with the showing service. Because the listing is “active,” the listing agent can show the property him or herself without technically violating the clear cooperation policy.

Another technique is the “office exclusive” option.  A listing can be marketed within a brokerage without putting it on the MLS. But once any kind of public marketing takes place, the listing must immediately be put on the MLS as either “coming soon” or “active.”

Fewer Sellers Are Trying “For Sale By Owner” — Here Are Some Reasons Why

There will always be people who are comfortable with selling their home without the assistance of a real estate professional. In 2019, 8% of sellers chose the For Sale By Owner approach. That’s an increased from 2018’s record low of 7%.

Here are some of the things with which you need to be comfortable if you choose the FSBO approach to selling your home.

Commissions: You will save on commissions, but not as much as you probably think. Listing commissions are negotiable, and the average commission is below the 6% you may think it is, and the listing commission includes the “co-op” commission paid to the buyer’s agent. In our market, that co-op commission is typically 2.8%.

Since most buyers choose to be represented by a buyer’s broker, you can expect that you won’t be able to save more than about 3% on commissions. Then you need to calculate whether selling without professional representation of your own is worth that reduced savings.

Net proceeds: It’s possible that you won’t get as high a price for your home without the marketing advantage of being listed on the MLS, which could attract multiple offers and even a bidding war.

Putting aside that bottom-line calculation, here are some other elements to be considered by the unrepresented seller.

Showings: How will you handle showings, including screening those who will be walking through your home? This is handled nicely by ShowingTime, the service utilized by virtually all agents in the Denver market. They make sure that only licensed agents are approved for showings. All licensed agents have been fingerprinted and passed a background check. In two decades of listing homes, I’ve never had an incident of theft or other crime associated with an agent showing of my listings.

Your time: Another consideration is the convenience of showings. Yes, you could purchase a lockbox and allow agent showings when you aren’t home, but you don’t want to give the lockbox code to buyers who don’t have an agent. Someone has to let them in.

Feedback: Another service provided by the showing service (only available to agents) is obtaining feedback after each showing and forwarding it to both seller and agent.

Disclosures: There are strict rules regarding disclosures of “adverse material conditions,” which real estate agents know well. If your home was built before 1978, there’s a 5-figure fine associated with failure to disclose possible lead-based paint hazards in your house, even if the disclosure would say there are no such hazards.

Pricing: Even in a seller’s market, an overpriced home can sit on the market for a long time and end up selling for less than if it were priced correctly in the beginning. Priced correctly, your home may attract competing offers, and an experienced agent (like us at Golden Real Estate) knows how to play those buyers against each other to get you the highest possible price.

But it’s a seller’s market”: Yes, it’s easier in our long-running seller’s market to sell a single-family home (condos are stalling because of Covid-19), but that makes it all the more important to get your home in front of the full market to stimulate competition, which only a listing agent with access to the MLS can do for you. It’s no surprise that the number of FSBOs has fallen, not risen, because of this dynamic. Your net proceeds, even with a higher commission expense, could be much higher.

NAR Agrees to More Transparency re: Buyer Agent Commissions

Last week, the Department of Justice simultaneously sued and settled with the National Association of Realtors regarding how brokers representing buyers are compensated and the public disclosure of that information.

As you may know — because I have written about it many times — the seller typically pays the commission of both the listing agent and the agent representing the buyer. The standard listing agreement includes the total commission and specifies how much of that commission will be shared with a buyer’s agent.

In that listing agreement, the total commission typically ranges from 5 to 6 percent, but the amount of that commission that is offered to buyers’ agents is traditionally 2.8% in our market. Our office policy at Golden Real Estate, like that of many brokerages, requires our agents to offer no less than 2.8%, because it has been demonstrated that offering less than 2.8% can result in fewer showings our listings.

Currently, that “co-op” commission is not displayed on consumer-facing MLS websites, but the settlement requires that it be displayed starting in January. Also, agents will be forbidden to tell buyers that their services are “free” or at “no cost to the buyer,” on the premise that the cost of that commission is reflected in the purchase price paid by the buyer.

Under the settlement, brokers who display MLS listings on their websites may not filter out listings which offer less than a specified co-op commission. We have never done that on our website, www.GoldenRealEstate.com

Lastly, the settlement requires that lockbox access be provided to licensed agents who are not members of the same MLS, an issue I have never encountered.

Despite Global Pandemic, Our Real Estate Market Was the Hottest Ever for August

Much to the consternation of observers, the real estate market in metro Denver was hotter this August than it was in any previous August, according to the Market Trends Committee of the Denver Metro Association of Realtors (DMAR). At this rate, 2020’s statistics at year end will likely exceed 2019’s statistics.

The report covers an expanded metro area, including 11 counties instead of the 7 urban and suburban counties that you and I think of as “metro Denver.” The non-urban counties included in the report are Clear Creek, Gilpin, Elbert and Park.

Detached single-family homes sold like crazy in August—up over 6% from August 2019, despite 50% fewer active listings at month’s end. The average sold price was up 13.8% from last year, and average days on market was down 23%.

Attached homes sold on a par with last year, although their inventory was also down — 19% fewer listings at month’s end. They did sell quicker, though, with days on market down by over 27%.

Unlike DMAR, I like to define the metro Denver market as within a 25-mile radius of the state capitol, as shown here, instead of by county. Using that method, the number of detached homes sold this August was up 13.7% from August 2019, and the sold price per finished square foot (my preferred metric) was up 7.0%. Average days on market dropped by 31%, but median days on market plunged 57% from 14 days in August 2019 to 6 days this year.

Even more interesting to me is that median days on market was in double digits until March 2020 — the first month of Covid-19 lockdown — when it dropped by 40% to 6 days, and remained in the 5- to 7-day range through August. It could be said that “Stay at Home” and “Safer at Home” really meant “Buy a Home” in the real estate business!

Average sold price within that  25-mile radius rose by 13.4% to $597,290, while median sold price rose by 11.6% to $505,000. The gap between average and median is attributable to a large number of million and multi-million dollar closings. I wish others would stop focusing on average stats for that reason.

The number of active listings (what we call “inventory”) plummeted from 6,483 in August 2019 to 3,444 in August 2020, a 47% decline.

Another measure of market strength is how many listings expire without selling. That number was 777 in August 2019, but it fell by 37% to 493 this year.

The average ratio of sold price to listing price was 100% both last August and this August — suggesting that roughly half the listings sold above full price. With half the homes selling in 6 days or less, it’s to be expected that there were multiple offers and possibly a bidding war on many listings.

This week my downtown Golden fixer-upper closed at $665,000, which was $40,000 over listing price. My Lakewood listing from last week is already under contract at $55,000 over full price. Clearly, the seller’s market is still hot despite the pandemic.

If you have considered selling your home, there couldn’t be a better time than now to put your home on the market. And you couldn’t do better than call one of us listed below to talk about it. Your home would, of course, be featured in my weekly Denver Post column and on this blog.

If you let us represent you in the purchase of your replacement home, the listing commission could be as low as 3.6% and qualify you for totally free moving!

Jim Smith— 303-525-1851

Jim Swanson — 303-929-2727

Carrie Lovingier — 303-907-1278

Chuck Brown — 303-885-7855

David Dlugasch — 303-908-4835

Carol Milan — 720-982-4941

If You Don’t Put Your Home on the MLS, You May Not Get What Your Home Is Worth

A reader wrote me last week complaining that some homes in her subdivision are being sold privately for less than they should, without putting them on the MLS. It bothered her because doing so creates lower comps that could affect what she is able to get for her own home when she sells.

Just as important, there are buyers who would like to move into her neighborhood who are frustrated when a home is sold before they can submit their own offer for it. And, of course, sellers are not getting the highest possible price for their home, as I’ll explain below.

Among the culprits are fix-and-flippers and “iBuyers” such as Open Door and Zillow Offers, who convince sellers to take a cash offer, claiming to save them the cost and inconvenience of listing their home on the MLS. More about them below, as well. (See my Jan. 2, 2019 and my Aug. 22, 2019 columns about iBuyers.)

If anyone offers to buy your home for cash without listing it, there’s one thing you can be certain of: they’re going to pay you a price that leaves lots of room for profit. That is money that could be yours if only you exposed your home to the full market by putting it on the MLS.

The worst thing you can do in a “sellers market,” which is what we have now, is to sell your home off the MLS. The next worse thing you can do is, after putting your home on the MLS, to sell it to a buyer who quickly offers you full price. If someone offers you full price on day one, you can be sure that there are other buyers who’d be happy to pay even more. Four days should do it.

But there is something worse than both those scenarios, and that is to put your home on the market at a price which does not attract any offers. I tell my sellers that they can overprice their home, but they can’t underprice it, because a low price can trigger a bidding war. An experienced Realtor like myself can help you set the perfect listing price. Just remember not to accept the first offer — unless that offer comes long after you put your home on the market, because you overpriced it.

What I see all too often is sellers putting their home on the market at a wished-for price, then lowering the price reluctantly over several weeks, and ending up getting only one offer, not multiple offers, at a price that’s lower than what they might have gotten if they had priced the home right initially.

It’s tempting, I know, to accept an unsolicited offer to sell a home without paying 6% commission, but I can’t even remember the last time I charged 6% commission. Remember, 2.8% of any listing commission goes to the buyer’s agent. Typically, sellers who try to sell “by owner” end up paying that 2.8%, so they only save the difference between 2.8% and the full listing commission, which is 5.6% on average. At least that is what I charge, and I reduce it if I sell the home myself, and I reduce it further when I earn a commission on the purchase of the seller’s replacement home.

If you factor in the totally free moving which I provide (locally, of course) when you sell and buy with me, it’s hard to justify not putting your home on the MLS with Golden Real Estate, thereby exposing it to all those bidders in this still-hot seller’s market.

Our Denver MLS, REcolorado, is now enforcing a new rule called “Clear Cooperation,” which was voted into being by the National Association of Realtors last November. It requires MLS members to put their listings on the MLS within 24 hours of promoting their listings in any way.

The rule is very simple: If a listing agent promotes his or her listing in any way — with a yard sign, tweet, Facebook post, or newspaper article, etc. — the listing must be on the MLS, either as “Coming Soon” or “Active.”  If it’s “Coming Soon,” the sign must say so, and it can’t be shown, even by the listing agent himself. Once shown, it must be changed immediately to Active status, making it available for showings by all members of the MLS. Prior to Sept. 1st, REcolorado only issued warnings, but fines are now being levied for violations.

So, yes, there can be off-MLS sales, but not involving an MLS member unless there was no marketing at all, not even emails to his/her clients. With “pocket listings” now banned, the focus now turns to the iBuyers, companies like Open Door, Zillow Offers and others which directly solicit homeowners to purchase their homes, charging a 7% “service fee,” with the intention of flipping the home for a profit.

Only time will tell whether this new rule, with fines being levied, will make a big difference, but it surely will make some difference.

Golden Real Estate Has an Opening for a Broker Associate

If you or someone you know is a full-time, experienced Realtor who shares our values of integrity and sustainability, then consider applying to be a broker associate at Golden Real Estate.

Our commission splits are very attractive and we offer many benefits — free showing service, free moving truck to offer clients, free leads, free Office 365 software, free promotion of your listings in our weekly “Real Estate Today” column published in the Denver Post and four weekly newspapers, and more.

Call Jim Smith at 303-525-1851 to discuss.

Sometimes when our buyer is in a bidding war, we even offer free moving to the seller, even though the seller is not our client! It has helped our buyer win the house they’re bidding on.

Beware of Brokerages That Offer to List Your Home for 1%

Perhaps you’ve seen the ads from a real estate company promoting a 1% listing fee. Some would consider this deceptive advertising, since the details are buried in fine print. In Colorado, you’ll pay an additional 2.8% fee to compensate the agent representing the buyer. That alone brings the fee up to 3.8%.  Also, the advertised rate requires that you buy your replacement home with the company. It’s all in the fine print.

Read the fine print! (You have 1 second to do so on this TV commercial.)

Would you really want to do business with a company that tricks you into granting an appointment by misrepresenting what they charge to sell your home?  We charge a little more, but you get far better marketing and, if we sell it ourselves, you could pay as little at 3.6% and get free moving to your new home.  Call Jim Smith at 303-525-1851 for details.

Note: Technically, the commission paid to the buyer’s agent is part of the listing commission even though it is paid by the seller at closing. Therefore advertising a 1% listing fee is in itself a lie. The listing contract would show 3.8%, not 1%. The fine print in the commercial also states that the 1% “listing fee” is increased if no commission is owed to the buyer’s agent. Therefore, 1% is not obtainable under any circumstance, although a listing agreement could be modified by the listing agent since commissions are always negotiable. I’m just referring to their “standard” commission arrangement as they are advertising it.

Real Estate Coach Thinks That I Should Charge Much More Than I Do. What Do You Think?

Business coaches exist in every industry, and I’ve dabbled in hiring a coach over the years.

When I first entered the business, I had a mustache, and Mike Ferry, the best known of all real estate coaches, said to shave it off because “people don’t trust agents with facial hair.” A week later I asked a seller why he listed with someone else, and he said, “Well, I didn’t trust you.”  Off it came!

Recently I was offered a free one-hour coaching session with a lesser-known coach, and I accepted the offer.

During the session, he thought I was giving my services away too cheap. He said I should charge 7% and not reduce my commission when I don’t have to share it with a buyer’s agent. (I charge 5.6% and reduce it to 4.6% if I double-end a transaction.)

He didn’t like that I further reduce my commission when I earn a commission on the purchase of a seller’s replacement home and that I provide totally free moving in that situation, too.

“You’re worth more than that,” he said.  I didn’t hire him as my coach.

What Is a ‘Variable Commission’ and Why Should Home Sellers Demand It?

This week’s column is intended to help those who might benefit from a better understanding of how real estate brokers are paid.  If you’re already well versed in this, please bear with me while I share some information with those who aren’t as well informed.

Before I explain what a variable commission is, let me explain who pays — and who receives — the commissions in the typical real estate transaction.

Normally, sellers pay the full commission to the listing agent, who then compensates the agent representing the buyer. How commissions are paid and shared is the primary purpose of the Multi-List Service, or “MLS” — to provide a system of  “cooperation and compensation.” If you’re a member of an MLS (a must if you want to do more than just word-of-mouth real estate), you commit to putting all your listings on it so that other MLS members can show and sell them. MLS listings disclose how much the “cooperating” broker will be compensated by the listing agent for procuring the buyer. 

Real estate firms may not dictate, share or discuss the commission rates that their agents charge sellers. To do so would constitute price fixing, a federal offense under the Sherman Anti-Trust Act of 1890. Brokerages may, however, dictate the amount each agent offers to other agents who sell their listings. At Golden Real Estate, we, like most brokerages, require that our broker associates offer a minimum 2.8%  “co-op” commission.  Offering less could result, I’ve found, in fewer showings by other MLS members.

There’s some history behind that 2.8% co-op commission.  Before the Justice Department forbade  the real estate industry from engaging in the fixing of real estate commissions, the Denver Board of Realtors fixed the rate at 7% and pegged the co-op commission at 40% of that, which is 2.8%. Listing commissions began falling due to competition once Realtors could no longer tell sellers there was a “standard” commission, but the  co-op commission remained at 2.8% to assure their listings got shown by agents.  As a result, it’s not uncommon now for listing agents to receive less at closing than buyers’ agents, even though they absorb all the costs of listing a home — signs, advertising, photos, video tours, showing service, staging consultations, etc.

Perhaps you’ve seen ads offering a “1% listing commission.” Such ads conceal (except in their fine print) the fact that an additional 2.8% is added to compensate the buyer’s agent.  As noted above, the listing commission includes what the listing agent will pay the buyer’s agent, so promoting a “1% listing commission” is, quite simply, misleading or deceptive advertising.

That said, let me now explain what a “variable commission” is and why sellers should demand it.

A variable commission is one which is reduced when the listing agent does not have to compensate a buyer’s agent — in other words when the listing agent sells a listing to his own buyer or to an unrepresented buyer, such as an open house visitor. Listing agents like to “double-end” a listing, because doing so can double what they earn on a given transaction.

Sellers certainly want their listing agent to be motivated to sell their own listings, but when that happens,  should the agent share his good fortune with the seller?  That’s the purpose of the variable commission.

Typically, I list a home for 5.6%, committing half of that (2.8%) to paying a co-op commission, but I reduce my commission to 4.6% when I sell the home myself. That way, I still earn more, but my seller pays less.  I want it to be a win/win.

MLS rules requires that each listing disclose the existence of a variable commission, so that brokers representing buyers know what they are up against in the event their buyer must compete with another buyer who doesn’t have his own agent.

Before submitting an offer, buyers’ agents typically ask the listing agent if there are other offers in hand. If the MLS indicates that there is a variable commission, the buyer’s agent will want to know whether any of the offers are from unrepresented buyers and, if so, the amount of the variable commission differential.  If the differential (as with my listings) is 1%, then the buyer’s agent knows that his client’s offer has to be 1% higher than an unrepresented buyer’s offer in order to be of equal monetary value to the seller.

Likewise, when meeting with unrepresented buyers, the listing agent can advise them that the variable commission makes their offer worth 1% more if they don’t engage an agent to represent them.

At Golden Real Estate, we have other rewards we can offer the unrepresented buyer, including “totally free moving” — free use of our moving trucks, free moving labor, gas and packing materials — if they choose to work with us instead of hiring a buyer’s agent.

As a matter of principle, I believe that a variable commission should be part of every listing agreement. However, my own research of sold listing on the MLS found that less than 20% of them indicated a variable commission.  In other words, more than 80% of sellers signed a listing agreement that allows their agent to keep 100% of their commission if they double-end the sale.

My research has also shown that roughly 7% of all real estate sales are double-ended. Thus about 7% of that 80% missed out on a multi-thousand-dollar discount in their real estate commission that they might have enjoyed by listing with, say, a Golden Real Estate agent.

Many homes are sold before they are made active on the MLS. Some, but not all, are put on the MLS after closing, showing zero days on market. I mentioned above that 7% of MLS sales overall are double-ended, but that percentage jumps to roughly 31% for MLS sales with zero days on market. Of those, 70% did not indicate a variable commission.  Many of those sellers, one can surmise, not only did not get as high a price for their home as they might have if it had been put on the MLS as an active listing, but also lost out on a discounted commission.

It should be noted that while the MLS considers a variable commission worthy of having its own data field, the standard listing contract lacks any place to specify a variable commission. If the contract had a section to enter that information, more sellers might ask about it before signing. Instead, unless your agent offers it proactively, as we do, you may not think to ask about including it as an additional provision.