Posted by admin on October 31st, 2005
How selling with flat fee MLS listing brokers can save home sellers thousands.
Home owners looking to save on real estate sales fees may consider Flat Fee MLS listing as an alternative to paying an agent a real estate commission of 5% or more. Unlike traditional real estate brokerage, Flat Fee MLS allows home sellers the option to sell on their own without paying a commission.
Called "Flat Fee" MLS because home sellers are able to place their homes in the same Mutliple Listing Service used by real estate agents and brokers for a one-time fee rather than paying a percentage of the sales price. The MLS is a database of homes for sale that is used by Realtor members who cooperate to sell each other’s home listings.
Because of the rise in home prices, many home owners are looking for alternatives to paying commissions that can easily equal more than the equity in a home. For a fee of somewhere between $300.00 to $1,000.00, home sellers list their home with a flat fee broker.
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Posted by admin on October 28th, 2005
Two out of three home sellers hire the first agent they contact.
Many homesellers don’t realize that real estate commissions are negotiable. The fact that real estate commissions seem to be fairly standard across the country leads many to believe that there’s only one commission rate.
Nationally, the average commission rate is about 5.2% according to Real Trends, a publishing and communications company providing news, research and information-based services to the residential real estate industry. But a recent poll of home sellers showed that most people anticipate paying a commission of 6% for a real estate agent to list and sell their home.
As new Internet business models enter the real estate arena, the downward pressure on real estate commissions gives home sellers more room to negotiate when it comes to hiring a real estate broker. Knowing what you can hope to gain by doing a little reseach before meeting with a real estate agent could save you a lot.
For a primer on "How to Negotiate Real Estate Commission Rates" see the new online report at Insight-Realty.com.
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Posted by admin on October 26th, 2005
DOJ/FTC Workshop gives voice to limited service models
Yesterday’s Department of Justice’s and Federal Trade Commission’s Public Joint Workshop entitled "Competition and the Real Estate Industry" gave voice to the many alternative brokerage models vying for space in the hotly contested real estate arena. Panelist from a wide spectrum of disciplines surrounding the industry, as well as moderators from the DOJ/FTC, gave differing opinions on their visions for the future of real estate brokerage, however, one message seemed to radiate clearly with participants.
Minimum service requirements have no place in a free and unfettered economy. The effect of such laws clearly seems aimed at impeding the growth of alternative brokerage models, especially flat fee, MLS entry only companies. Steve DelBianco, Executive Director of the NetChoice Coalition, and Tom Early of the National Association of Buyers Agents (NAEBA) combatively and humorously debated leaders of the traditional real estate cartel demonstrating how such impediments to innovative business models as legislatively imposed minimum service requirements serve to harm consumers by creating barriers to brokers wishing to offer consumers choices in real estate services.
Over the past year, the DOJ and FTC have issued a number of letters to state legislatures around the country warning of the deleterious effect of proposed minimum service laws on consumers. So far, the National Association of Realtors and their state level counterparts have been largely successful in foisting bills on the unwitting public that limit consumer choices and help to prop up the antiquated system of bundled real estate brokerage services and full (5-6%) commission real estate.
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Posted by admin on October 24th, 2005
Pros & Cons
Jean Chatzky, Financial Editor for NBC’s The Today Show, discusses the advantages of using Discount or Flat Fee brokers when selling a home. The significant cost savings, particularly in hot markets, are driving more and more sellers to explore these options.
Consumers have more and more information at their disposal and are increasingly the drivers of the real estate transaction. Even as traditional brokers fight against these emerging models, consumers will continue to seek out service providers who better meet their individual needs.
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Posted by admin on October 20th, 2005
Minimum Service Laws Called into Question
Mark Tuesday October 25, 2005 in your calendars. The Federal Trade Commission and the Department of Justice are holding an Open to the Public workshop to discuss the effect on Limited Service laws on competition in real estate.
At stake are the rights of consumers to choose the real estate services they want when selling their homes. Backed by the powerful National Association of Realtors (NAR) trade group, lawmakers around the country have been cajoled into passing laws affecting the way real estate brokers may offer "a la carte" or limited services to consumers.
What the DOJ and FTC believe, along with many familiar with the industry, is that the affect of these so called "Consumer Protections" is to limit competition in the marketplace by restricting the types and levels of services brokers are able to offer. For example, the proposed law in Michigan would require real estate brokers to assist sellers in "developing, communicating, negotiating and presenting offers" in real estate transactions. While this may sound like a perfectly normal thing for a real estate broker to do, what it means is that if a seller wants to hire a broker to, say, just list their home in the MLS, the broker would be REQUIRED BY LAW to also provide additional services. Of course this will cost the consumer more money.
What the proponents of these measures are attempting to do is force certain business models to adjust the way they do business, or stop doing business altogether. This is what is called anti-competitive legislation and it’s just what the Department of Justices Anti-Trust division was designed to deter.
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Posted by admin on October 20th, 2005
Prices Dropping as Inventory Grows
Many areas around the country are seeing home prices come down from record highs as inventory continues to expand. Many forecasters are beginning to worry that a depressed housing market, rising fuel costs, and other factors could mean a bumpy ride ahead for the US economy.
But is the housing industry really headed for a collapse? Like all things real estate it is local in nature. Some markets have seen dramatic price increases that may be unsustainable, while others have seen only modest growth.
The impact of a significant downturn will vary with individual purchasers. Those who intended on flipping their property quickly or hold a mortgage with a high LTV ratio may see a significant hit on their investment.
Posted by admin on October 17th, 2005
FSBO’s keep more money selling on their own
There’s no doubt about it. More home sellers are choosing to take matters into their own hands and sell their homes by themselves. Two changes in the way property can be marketed are making them more successful.
One, the Internet allows For Sale By Owners (FSBOs) unprecedented access to the marketplace. No longer are home sellers at the mercy of local real estate agents who once stood at the gates to the real estate transaction with their control of information about which properties were for sale. Promoting a property nationally is now as easy as posting on a web classified site like Craig’s List or even creating your own web page.
The second factor increasing FSBO’s success rate are the availability of "a la carte" real estate services. No longer are real estate tools and services available in a "one size fits all" model whereby sellers pay a real estate broker a relatively large commission for a suite of services. Now, in most states, (see limited service article) home sellers can choose which tools and services they want from a variety of models.
Most importantly, FSBO’s now have access to the Mutliple Listing Service (MLS) through online companies offering flat fee MLS listing. Companies, like InSightMLS.com, offer a way for home sellers to list their property alongside traditional real estate agents properties in the MLS for a one-time, flat rate. An MLS listing provides the greatest marketing exposure possible by promoting homes to all of the area real estate agents and their buyers.
For added exposure, most MLSs also provide listing on Realtor.com, the number one real estate website in the world with over 6,000,000 unique visitors per month.
With the marketing exposure problem solved, it’s a matter of home sellers educating themselves enough to handle the more subtle aspects of the real estate transaction. Many online guides are available to assist the FSBO seller. As they say in real estate licensing school: "It ain’t brain surgery".
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