Posted by admin on December 31st, 2006
Services are sold a la carte
In theory, all market participants benefit as it is a much more efficient system. For the sellers and buyers, the greatest benefit is savings over traditional commissions. As a stakeholder in the business model, I see a great number of other benefits for the market as well, but for the consumer it boils down to dollars in hand. The agents in a set fee model also benefit, but that is a factor with high variability; the broker/manager must have an effective and efficient model in place.
With flat fee services, everyone benefits, unlike traditional real estate transactions where the real estate agent can allow a home that isn’t selling to sit for months and when the property does sell he gets his 6% anyway. With flat fee services, you pay to list on the MLS and control the aspects of the sales process that you want to control. Areas you may not feel confident in or would like assistance in can be purchased for a flat fee. Services are sold a la carte to give buyers and sellers more control and more options. Everyone wins.
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Posted by admin on December 30th, 2006
Compare apples to apples and don’t list too high
So you are going to put your house on the market next week. Don’t be in too big a rush. You might underprice your home.
Most sellers are more in danger of overpricing their home than underpricing it. Historically, that’s what many home owners do. They are overconfident. They let their home sit on the market for too long at too high a price and when they finally discover they have priced themselves out of the market, it’s almost too late. Their best remedy at that point is to take their home off the market and relist it a few weeks later. That’s not a good strategy.
Many are waiting until next week to list. I suggest you wait until January the 8th and be careful. Expect an increase of listings friday the 5th. A smart agent will encourage you to list that day and have you take the weekend off. One purpose is to see if you get multiple offers.
That’s a worthy suggestion. See what the competition is doing. Most likely, the other home owners will be overpriced. But don’t list your house at the same price as other houses on the market right now. Proper market research includes a comparative market analysis that goes back six months and looks at house within a few mile radius of your property and of similar size and with similar amenities. That way, you are comparing apples to apples.
See Also
- Price Your Home To Sell
Get a CMA before you list your house in order to prevent yourself from overpricing or underpricing your property.
Posted by admin on December 29th, 2006
Now it’s time to play fair
Local multiple listing services are being challenged both internally and externally. In regard to internal issues, in my opinion, we have been too slow to adopt the changes necessary in governance and mergers/acquisitions to keep pace with the external challenges. In regard to external challenges, sometimes we move too quickly, sometimes not quickly enough, to meet and address the issues.
Local MLS services responded to the challenges of the new world by bullying nontraditional brokers. They weren’t prepared for the fight that lead to with the DOJ and consumers. Now, they are forced to adapt. Meanwhile, nontraditional brokers have a head start on the new communication media that allow us to connect with consumers. Realistically, there’s enough real estate to go around. There’s no reason we can’t all play on the same field.
See Also
- What Is The MLS?
How consumers can benefit from the system that realtors have used for decades.
Posted by admin on December 27th, 2006
Consumer Federation of America details discriminations against non-traditional brokers
According to a recent report published by the Consumer Federation of America, nontraditional real estate brokers have seen an increase in business in the last ten years while traditional real estate brokers have seen a decline.
The report says that The Wall Street Journal reported a decline of home sellers using traditional real estate brokers by 4% between 2002 and 2005. During the same period, the report says, the percentage of sales involving nontraditional brokers increased by 9%.
These are pretty significant figures considering the hurdles that nontraditional brokers have had to jump just to attract business. The report goes on to detail those hurdles, which include:
- Delays in the membership application process of local realtor associations
- Prohibitions on using "MLS" in association with services offered
- Restrictions on information allowed to list on websites
- Forced segregation of listings, resulting in reduced exposure
- Discrimination against nontraditional broker listings
- Outright property listing refusals
- Denial of property owners to use "For Sale By Owner" signs
- Refusal to show homes where brokers receive less than 3% commission split
This, of course, is just the short list. There are plenty more violations of fair trade and in some cases the Department of Justice has got involved to enforce antitrust legislation. This was the case in a lawsuit recently settled against the National Association of Realtors.
Some flat fee brokers have reported harassment and ridicule by traditional brokers and even disparaged by state regulators. The abuse of flat fee brokers has not just been within the real estate industry either. One Texas newspaper refused to run ads by nontraditional brokers fearing that there would be a backlash by traditional brokers in their coverage area.
The report does offer solutions to the discriminatory practices and aims at creating a more fair playing field, which will benefit consumers. The suggestions made in the report include a call for state and federal regulators to:
- intervene in antitrust practices to institute fair play
- act in a timely and impartial manner to solve disputes
- prevent frivolous acts of anti-competitive behavior among traditional brokers
- study the markets for bias against nontraditional brokers
The report also encourages consumers to play a role in creating a more competitive environment by shopping around for better prices and negotiating with real estate professional regarding their services and fees. We couldn’t agree more.
See Also
- Flat Fee Broker
How a flat fee broker can assist you with buying or selling your home; why a nontraditional broker may be for you.
Posted by admin on December 26th, 2006
Expect this tool to become more popular in 2007
Call it virtual voyeurism: By August 2006, 51% of all Internet users had taken a virtual tour of a piece of real estate, according to the latest release from the Pew Internet & American Life Project, up from 45% in November 2004.
You can expect in increase in these numbers in the next couple of years. Virtual tours will soon be an absolutely essential point of marketing for sellling your house online. If you want to hit buyers where they need to be hit to make that decision, a virtual tour will be the one thing that will give you the edge over other home sellers.
In fact, if you want potential buyers to come and look at your house, you will have to get them to take a virtual tour, then they are more likely to contact you.
See Also
- Virtual Tour
Get your virtual tour at IHS Realty for $149.95.
Posted by admin on December 26th, 2006
It could also be an equally good time to sell
"Anyone buying a home and plans to stay there four or five years is just fine. A house is not a day-trading asset," said Leslie Appleton-Young in a forecast made to about 500 real estate agents and industry representatives last week at the JW Marriott Desert Springs Resort and Spa. The annual forecast event is sponsored by the California Desert Association of Realtors.
Now may be the best time to buy. If the market corrects itself then turns and heads south again, many people looking to buy real estate will be left out in the cold. You could see the market making its first correction. The next one very well could be the second leg of a downward trend - the longest leg in most technical analysis indicators.
While buyers can do well in this market, sellers can also do well. Whether you are buying or selling real estate, don’t go into transaction blind.
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