Flat Fee MLS

Market peak may present time to cash out.

The Census Bureau reported Friday that the annumal pace of new homes sales has slipped to 1.25 million in November from the record high of 1.4 million in October. Still, it is relatively high by historic standards.

David Lereah, the National Association of Realtors (NARs)’s cheif economist said, "November’s numbers confirm that housing activity has peaked and is now slowing." Mortgage rates have continued to climb to 6.33% from 5.73% a year ago. Gradual rather than sharp increases have helped to keep the housing slowdown moderate. "This is not a scenario for a hard landing," Lereah said.

Edward Leamer, an economist at UCLA, says now may be a good time to sell. "If you’re choosing between selling now and selling in two or three years, do it now," he says.

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Real Estate Industry

In recent years, the National Association of Realtors (NAR) has been under a lot of pressure from the Department of Justice (DOJ) regarding competition in the real estate industry. The report entitled: "Structure, Conduct, and Performance of the Real Estate Industry" fires back that residential real estate "closely resembles a perfectly competitive industry structure."

The report states that there are 2.5 million licensed real estate agents in the U.S. actively competing with each other for a piece of the real estate pie. Most agents work as independent contractors. Accordingly, "any collusion to set commission rates at the agent level is impossible." Any attempt by one firm or agent to artificially set rates at a higher level would automatically be met by resistance in the marketplace as other agents would simply undercut the competition in the clash for more business.

The report fails to address why commission rates seem to be consistently uniform throughout the country. And, what seems to allude the NAR is the entrenched anti-competitive behavior that exists from traditional brokerages towards newer discount and flat rate business models. Traditional brokerages offering bundled services for commissions ranging in the 5-6% range, almost without exception, form the leadership of NAR, state level Realtor Associations and local real estate commissions that control the rules and regulations affecting the industry. More importantly, these forces most often control the Multiple Listing Services (MLS) that provide the backbone of the residential industry.

Several key issues have been brought to the public’s attention over recent years by the efforts of the DOJ and Federal Trade Commission as well as Congressional Representatives Michael Oxley and Barney Frank. One, that the MLS is the "de facto" market for real estate within any given community. Two, rules that have been established by NAR and/or local REALTOR associations form a pattern of discrimination against discount and limited service companies. Three, that left to their own devices, there is little incentive for NAR leadership to discourage anti-competitive behavior among traditional agents against their discount and limited service competitors.

While the most recent NAR report makes salient points regarding the overall competitiveness of the real estate industry, it fails to address the concerns of those who would offer innovative business approaches to an industry steeped in inefficiency. There seems to be no attempt by NAR to discover if, in fact, discrimination is taking place against newer business models and whether or not such discrimination is anti-competitive or anti-consumer. With "ostrich with its head in the sand’ aplomb, the party line is that no problems exist within the real estate industry and no outside (read DOJ) pressure is needed.

See Also

• NAR Strikes Back At Anti-Competitive Charges
  The real estate industry, the National Association of Realtors (NAR) in particular, has been fighting charges of anti-competitiveness for years.

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Raleigh Durham MLS listings now online

InSight Realty announced today the addition of the Triangle MLS IDX feed to its website, www.insight-realty.com. InSight’s website now features listings of homes for sale in the Raleigh, Durham, Chapel Hill and Cary, North Carolina area direct from the Triangle Multiple Listing Service.

With the addition of the Raliegh-Durham , NC database of homes, InSight continues to add to its property listing database, now among the largest in the Mid-Atlantic region. InSight is the only website in the country to offer Realtor MLS listed properties along with For Sale By Owner properties and links to Government and Bank foreclosures making it one of the most comprehensive homes for sale websites in the U.S.

For more information about properties for sale in InSight’s coverage areas throughout the Mid-Atlantic and Southeast, visit http://www.InSight-Realty.com/search_homes.php.

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New limited service definition recommended

The Virginia Association of Realtors today released their first draft of a proposed legislative change to Virginia’s real estate agency law. The new law would allow real estate brokers to provide real estate services on an "a la carte" basis thereby allowing home buyers and sellers to choose the types and levels of real estate services they want rather than being forced to purchase a bundle of services for a relatively high commission rate.

The new legislation comes at a time when the debate over "mininmum service requirements" for real estate agents and brokers is being waged across the country. Several states, under pressure from Realtor Associations, have already passed legislation requiring real estate brokers to perform certain minimum brokerage acts such as receiving and negotiating the purchase contract on behalf of the home seller, providing real estate advice throughout the transaction and even attending the real estate closing. The effect of these requirements has been to pressure flat fee and discount brokerage models into having to alter their service offerings to provide bundled services and, of course, forcing consumers to pay more for professional real estate assistance.

More…

See Also

• Texas passes limited-service real estate law
  Debate among discount, full-service brokers continues

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Alternative Brokerage Models stand to gain from proposed legislation

Throughout the past several years, "limited service" legislation has generally meant "bad news" for consumers and limited service brokers who seek to offer low cost alternatives to the traditional brokerage model. Now the Virginia Association of Realtors is making a legislative proposal that may actually benefit consumers and limited service brokerage companies alike.

Unlike traditional brokerage companies charging relatively large real estate commissions for a full range of services, limited service brokers offer a menu of services from which to choose and provide consumers with a cost effective means of retaining control of their property sale while still benefiting from the important tools that real estate agents possess, such as listing in the Mulitple Listing Service.

Current real estate law in Virginia requires agents to perform a set of minimum services in order to engage in an agency relationship. The new law would create a new class of agency relationship called "limited service agency" which would allow brokers to provide fewer services, generally for a reduced rate. According to Scott Brunner, CEO for the Virginia Association of Realtors, the proposed legislation "absolutely legitimizes the discount brokerage model that has taken such flack in other states."

See Also

• DOJ blasts another real estate rule on anticompetitive charges
  New Mexico considers changes to establish minimum services

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MLS Lion announces launch of national real estate website for flat fee MLS brokers.

MLS Lion announced today the launch of a national flat fee MLS listing service. Through the company’s website, www.MLSLion.com, the service provides home sellers with nationwide access to limited service and MLS-entry only real estate brokers in the United States and Canada.

Michael Logan, Jr., vice-president of MLS Lion, said, "MLS Lion is an interactive platform for limited service brokers to offer their services to a national audience. By providing an online connection between consumers seeking to save money on the sale of real estate and brokers offering real estate services for a low, flat rate, MLS Lion is positioned to be a key player in the emergence of alternative models in the real estate industry".

Using the MLS Lion web application, flat fee and limited service brokers can create their own real estate brokerage offerings and set the price for their services. The system also provides a convenient referral service for brokers to send customers to flat fee brokers in other areas of the country and receive a referral fee.

Home sellers can locate a flat fee MLS listing broker in their area and order their MLS listing online, create their own webpage, upload photos and download real estate forms.

MLS Lion currently offers flat fee MLS listing service in Arizona, California, Colorado, Connecticutt, District of Columbia, Florida, Georgia, Kansas, Kentucky, Illinois, Maryland, Massachussetts, Mossouri, New York, North Carolina, Pennsylvania, South Carolina, Tennessee, Utah, Virginia, and Washington State.

See Also

• Flat Fee Brokers Gain Momentum
  DOJ and FTC commission champion free-trade in real estate brokerage

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