AgentReal Estate

The special-lists: The wild volume world of listing-only agents

Listing-only agents are creating high-volume business models and supplying properties to the MLS. Is this a good thing?

As Ralph Harvey explains his business strategy, one can hear a whoosh and ping of messages filling his phone.

But Harvey does not miss a beat as he describes being a listing agent for over 3,253 U.S. home sellers in 2021, or about nine people a day, 365 days a year.

“Some love us. Some hate us. Some tolerate us. Some talk dirt to us,” Harvey said about List WithFreedom.com, a Boynton Beach, Florida-based real estate brokerage.

“The truth is that we’re helping agents,” he declared. “We are helping to preserve the industry from its inevitable death.”

Harvey had the second highest number of deals of any U.S. agent in 2021, according to the RealTrends + Tom Ferry The Thousand (RT1000), which ranks the country’s most productive agents by transaction sides and sales volume. He is ranked No. 4 individuals by sales volume.

He is also typical of the agent who tops the transaction side list.

Like the top agent, the #3 agent, #5 agent, #6 and #8 as well as #9, Harvey is not cleaning a home to prepare it for a sale or scheduling showings or negotiating with a buyer’s agent. He is simply entering the home on the local Multiple Listings Service.

“MLS only” agents, as Steve Murray, senior advisor at RealTrends dubbed them, have been around for decades. Per research Murray did for the Federal Trade Commission, they represent just 2% of all real estate listing agents in the country.

But recent developments in software let MLS-only agents scale in a way they haven’t before, Murray said.

There lies a tension between the MLS-only agent and a more traditional agent who is usually representing the buyer in the sale.  

“Given the scarcity of inventory, agents know they have to work with them and try and get paid a commission,” Murray said.

They list the homes

Ben Caballero of HomesUSA is the proverbial Michael Jordan of an agent who uses software to put homes on the MLS. The Dallas-headquartered agent yet again topped the RealTrends’ list with a staggering 4,671 sales.

But Cabellero works with homebuilders including Toll Brothers and Trophy Signature Homes to put newly constructed abodes on the market in bulk.

On the other hand, runners-up including Harvey, Jonathan Minerick of Homecoin.com, and Stephen Hachey of Flat Fee MLS Realty largely accumulate clients one seller at a time.

ListWithFreedom.com was started in 2005 by Jim Tymanski, a software engineer who turned out to live a few blocks away from Harvey.

“I went over and talked to him about all the ways he could expand,” recalled Harvey. “I touched a nerve with him.”

“We came to terms with me buying the company, and him handling all the tech issues,” Harvey said.

For home sellers, ListWithFreedom.com presents options similar to their local car wash. There is the $89 silver package, the $149 gold package, the $199 platinum offering, and then platinum plus for $299.

The differentiator between the packages lies in how many photos the home seller may place on the MLS, with the $89 silver package requiring a solitary photo of the front of the house. Also, the platinum packages include assistance with an open house.

The pitch to homesellers is simple, “List your home on the MLS and save thousands.”

And it is generally accurate.

Under the National Association of Realtor’s more than 100-year old arrangement in how commissions are paid, the home seller is responsible for paying the buyer’s agent. Harvey counsels customers to pay the buyer’s agent 2.5% of the sale price, which is an industry standard.

If the seller employed a full-service agent, they would pay each sale side 2.5%, or 5% of the sale. In other words, if a home sells for $500,000 then $25,000 would go to the respective agents. If a seller used the ListWithFreedom platinum offer, $199 goes to Harvey and $12,500 routes to the buyer’s agent. The seller in this hypothetical saves $12,301.

Harvey claimed that once the model gained traction it was easy for ListWithFreedom.com to expand its customer base and become licensed brokers in 44 states.

“Hopefully, when the property sells there are happy people bragging about all the money save,” Harvey said. “The seller winds up being the billboard for us.”

Other MLS only brokerages have almost identical models.

Three-and-a-half hours northwest of ListWithFreedom.com lies the Tampa headquarters of Flat Fee MLS Realty.

The company with a staff of six people reported representing the seller on 812 deal sides in 2021. It offers listing packages of $69, $199, and $399, with the most expensive package offering professional photography.

San Diego-based Homecoin, which reported 1,116 sides in 2021 has a similar model.

“We have a one-time fee of $95 per listing and that is it,” said Jonathan Minerick, broker of Homecoin. “We are a software company that has a broker’s license and uses it when we need it.”

Long live the MLS

In theory, the MLS agent appeals to the rugged do it yourselfer who especially does not need help in this high-demand market.

“The consumer is becoming more educated and savvier,” Harvey said.

“If you need hand-holding,” said Steve Koleno, of Exit Strategy Realty in Chicago, who mostly lists homes for corporate landlords as well as smaller investors. “I’m not the agent for you.”

But the MLS only agent benefits from the status quo, namely the essential role of the MLS, the hundreds of listing services across the country in which only dues-paying National Association of Realtors members may post.

Sonia Gilbukh, a professor at Baruch College who has studied the MLS system, has noted that it is actually impossible to discern how many MLSs exist nationally, and even sometimes the main MLS of a particular market.

Nevertheless, NAR requires its member agents to post all home sales on the local MLS within 24 hours a day, in what is colloquially known as the pocket listings ban. And in the last year, Zillow has joined Redfin and Realtor.com in almost entirely aggregating their listings from MLS internet data exchange feeds.

The pocket listing ban and Zillow action are the subject of two separate, well-financed lawsuits.

But for now, home sellers depend on the MLS. Harvey argued that benefits him and traditional agents.

“The truth is that we’re helping agents,” The ListWithFreedom.com broker said. “Because if it weren’t for us, 95% of those deals would be for-sale-by-owner with no agents involved.”

“Agents take shots at us,” Harvey added. “But there’s also agents out there who think we’re great and are happy to work with us on the buy side of the deal.”

Besides the unusual symbiosis between the MLS only broker and traditional agent, another question for the niche industry is how to differentiate the companies.

Caballero carved out a corner working new home sales in the Southwest, and Koleno is perhaps doing the same for Midwest single-family landlords.

But the benefits between having ListWithFreedom literally entering your information on the MLS compared to, for example, Flat Fee MLS Realty are hard to discern.

The pitch from Hachey of Flat Fee MLS Realty is they are a “mom-and-pop operation,” and, “All my staff knows Florida real estate inside and out.”

Hachey showed emails that his company sends out to sellers with tips like to leave the house during a showing because it can make the prospective buyer nervous. He also said the company responds to seller questions.

Other MLS only agents including Jason Sapphire at HomeZu in Sharon, Massachusetts and Chris Carr at Lafayette Hill, Pennsylvania-based Simple Choice Realty claim a regional focus.

Harvey, on the other hand, has his sights set nationally.

“Locale by locale people are beginning to accept us,” he said. “We think we are supporting the industry, while exposing its weaknesses and inefficiencies.”