Flat fee MLS changing the field
The Multiple Listing Service (MLS), the internet, and a For Sale sign are the three most important marketing aspects to getting your home sold.
Real estate commissions have always been negotiable, but now flat fee MLS brokers and discount realtors have added some pressure to the real estate commission structure. Home sellers can eliminate a minimum of 3 percent in commissions by eliminating a listing agent - in the traditional sense. Flat fee MLS companies serve as a licensed agent willing to list your home in the MLS for a one-time low fee.
The MLS will provide marketing exposure you cannot otherwise attain as a for sale by owner. The home will receive exposure on hundreds of real estate related websites, like Realtor.com among a plethora of others. And agents cannot by law refuse to show homes listed by another agent because of anti-trust laws. If this does occur you should report such instances to the DOJ.
Even with discounters and flat fee you can publicize open houses, but only 3-4 percent of sellers find a buyer through this avenue. So don’t let a traditional agent convince you of their value because they will host open houses. Is a 3-4 percent success rate worth thousands of dollars? I didn’t think so.
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Real estate websites report marked increase in website traffic
Statistics have indicated that 80 percent of home shoppers begin their search online. comScore Media Metrix released its monthly analysis of consumer activity at top online properties and categories today. Among the top trends in April was the increased traffic to real estate sites, up 12 percent from the March, and up 23 percent from a year ago. Peter Daboll, CEO of comScore, says interest "ballooned" due to overal angst in the market and new industry web site innovations. As inventories and rates have risen innovations like flat fee MLS companies, discount realtors and home valuation sites have been the benefactor. This marked increase in real estate website traffic only proves the trend in the real estate industry is toward consumer control. This consumer control is attainable on both sides of the transaction. Flat fee brokers and discount brokers are providing expansive marketing advantages to home sellers in a cost effective while home buyers are afforded the opportunity to enjoy open houses from the comfort of their own PC via virtual tours and multiple photo showcases. The industry is changing and here are some numbers to back it up.
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January 23, 2006 – 2:05 pm
Banks Should be Allowed to Offer Brokerage Services
The U.S. Congress has again delayed action on proposed regulations that allow banks to engage in real estate brokerage and related legislation that would prevent the change. The real estate industry has fought ferociously against banks in real estate dubbing it "The Big Grab". Similar to their actions on many other issues confronting the industry, the real estate establishment is entrenching themselves on the side of maintaining their current commission rates. Consumer benefits and increased efficiency seem to always take a back seat when it comes to change and/or innovation in the real estate industry.
In response to a GAO Report issued in September the American Bankers Assocation stated the following:"The GAO report released today confirms our belief that consumers are getting short changed in the current real estate market. This report, following similar complaints from the Justice Department and the Federal Trade Commission, is the latest voice supporting greater competition in real estate brokerage. The GAO found that fees paid for real estate brokerage services have increased well beyond the rate of inflation. By closing out competition from discount brokers and banks, consumers are forced to pay high commissions with little opportunity to shop around for a better deal. With each home sale, real estate brokers are pocketing thousands of dollars that should be staying in the hands of consumers. With housing prices at an all-time high, there is no better time to bring greater competition into the marketplace. "In their efforts to stifle competition, it is clear that the National Association of Realtors is more concerned about protecting their own business rather than serving the customer."
The "industry" argues that their primary goal is to protect the consumer and that their interests are only preserved when protected by the services of a real estate professional. Of course this is the same argument they make when campaigning against discount brokers, commission rebates, for sale by owners, etc.
It is hard to understand how banks could harm consumers of real estate services. They would bring much needed infusions of capital and talent to an otherwise fractured and stale industry. And contrary to many fears, banks could not just take over the industry. More likely they would work within the existing framework to gradually bring efficiency and enhanced services to the industry.
Given the fact that the National Assocation of Realtors now boast that they have over 1 million members, I am confident that more than a few would not survive the introduction of more and better competition. That would be the first big consumer benefit of the change.
