Sarasota Florida Flat Fee MLS Listings FSBO – Discount Realtor & Broker

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This article from the Inman News, is very critical on the Real Estate Industry’s Commission Structure. Anytime a business niche explodes with profits and benefits from Surplus Spending, a few things will happen. 1) The Media will Exploit the Profits made by this Sales Niche, then Here comes the competition (Everyone went out and got a real estate license front-loading competition) 2) Smaller Business will find ways to outprice the competition & bring more value to the consumer establishing their footprint in the market (This is what Shirley International Realty Inc. has successfully done..) 3) The Media will analyze, breakdown, criticize, & find ways to exploit the negatives in letting this Sales niche make extremely high profits (Hence.. this article..) I still list homes for 6-7%, while still bringing that Value to My Sellers. Sellers need different services for different reasons, so its more important than ever for Real Estate Brokers to communicate value to Real Estate Consumers.. A Discount Broker MAY be your best selling option.. Read on..

Wednesday, October 11, 2006
By Glenn Roberts Jr.
Inman News

The commission structure in the real estate industry is “an anomaly” that may inflate compensation for services rendered by tens of billions of dollars each year, according to an article published by the AEI-Brookings Joint Center for Regulatory Studies, which offers analysis and recommendations on regulatory programs.

The draft paper, “A Critical Assessment of the Standard, Traditional Residential Real Estate Broker Commission Rate Structure, suggests that consumers would benefit most from fee-for-service real estate companies that base compensation on flat fees, hourly fees and other specific payments for services rather than relying on a commission rate that is based on a percentage of the sale price of a home.

“Residential real estate brokers and salespersons have long quoted their fees as a straight percentage of a home’s sale price. This traditional formula, however, ill serves the interests of both home buyers and sellers, and is a primary reason why such fees may be inflated by, on average, more than 100 percent or $30 billion annually,” states the paper, authored by government lawyer Mark S. Nadel.

Not affiliated with the Federal Trade Commission or Justice Department and studying the real estate industry as an independent scholar, Nadel said he has also written about copyright, organ donation, affirmative action, and compensation for travel agents, among other topics.

Traditional real estate industry commission practices have come under fire from discount real estate companies and consumer groups, and government agencies have taken action against perceived anti-competitive behavior in the industry in an effort to preserve the option of low-cost and menu-based real estate services for consumers.

In a typical real estate transaction, the agent who enters into a contract with the seller receives a commission that often ranges from about 5-7 percent of the sale price. This agent typically shares about half of the commission with an agent who brings a buyer to the transaction.

Nadel said that experienced real estate brokers may actually stand to gain income over traditional commission rates by charging a fixed rate or hourly rate for services. “Some brokers are, I have no doubt, worth $500 or more per hour — comparable to the best lawyers, the best accountants,” he said.

Nadel said he agrees with Julie Garton-Good, a real estate educator, author and broker, who has said that agents often give away what is most valuable while charging for relatively routine tasks.

“That’s backwards and should be flipped around,” Nadel said. “Most other groups charge for expertise and their advice. I’d like to consult with somebody who has expertise.”

There are some very big obstacles standing in the way of changes to the structure of real estate compensation, Nadel said. “The National Association of Realtors and traditional brokers understandably want to protect the revenues they are making.”

There is intense competition in the real estate industry, Nadel said, “but it’s not on price.” Citing the example of the airline industry, Nadel said that consumers and new companies are the beneficiaries of price competition while traditional airline companies and their employees have “suffered tremendously.” Traditional real estate brokers, he said, don’t want that to happen in their industry.

“The main point of my article … is that the percentage basis is not defensible in my view. It is both too low and too high,” he said. A percentage-based commission provides an incentive for agents to sell homes quickly because compensation is based solely on the sale price rather than on the time, effort and marketing dollars that agents pumped into the properties, he said.

While the multiple listing service is a valuable tool used to list information about for-sale properties, Nadel said he believes that the MLS should be operated more like a public utility. “If MLSs continue to be operated to favor brokers over consumers, then a new entity, like Google, may displace the current NAR affiliates with a more inclusive MLS,” he states in the draft article.

Consumers are largely unaware of the compensation practices in the real estate industry, Nadel said. “I believe a large portion of buyers still think that their buyer-broker is paid by the seller, not by them … the money is coming from somewhere.” And consumer education about industry compensation practices may be the primary driver for changing the commission-based system, he said. “That will create tremendous market pressure.”

A consumer who earns $30,000 a year in salary might question why the real estate broker who assisted with a home purchase is worth the $15,000 commission collected in the deal, for example, he said.

While some real estate agents working for traditional brokerage companies have in some cases discouraged clients from working with discounters such as limited-service and fee-for-service real estate companies, Nadel contends that the concept of a “full-service” real estate company is ambiguous — especially when the so-called full-service companies work to discourage consumers from considering all available properties rather than those properties that would generate the most compensation, he said.

“Nobody is enforcing this rule that says your fiduciary duty is to the buyer,” Nadel said. “Right now there are new entrants that are using the fee-for-service (model), but there are a couple of problems that they are facing. One is that if I list with a broker who is charging me less and offering less than the 3 percent (commission), you have a lot of traditional buyer’s agents who will not show that property.”

In his article, Nadel compares the real estate industry’s commission practices to those of the funeral industry as exposed in the 1963 book “The American Way of Death,” which found that families arranging for funerals “were regularly asked to pay a single price for a bundle of services, many of which they did not need or want.”

The traditional rate structure in the real estate industry has “serious drawbacks and a lack of economic justification,” Nadel charges in the article. “Consumers would be substantially better off if residential brokers used fee structures similar to those used by professionals in other advisory/consulting service fields, such as law and accounting.”

In making a case for an a la carte rate structure for the real estate industry, Nadel states in the article that the local MLS “appears to be the a la carte offering most desired by sellers,” and “some believe that fixed-price access to MLSs is inevitable” while the National Association of Realtors trade group “and its supporters … are adamant in refusing to permit the MLS to be treated as a public entity, which would facilitate price competition.”

Some newspapers maintain searchable online databases with information about for-sale properties, and these online sites along with others such as craigslist.org or Google could function as quasi-MLSs, Nadel said. Even if a national, aggregated list of for-sale properties is created, “agents will still be valued for their early knowledge about homes about to be listed, particularly agents who monitor local news about divorces, retirements and relocations, and are even willing to contact owners of homes that may be ideal for a buyer even though they are not for sale,” the article states.

Steve Cook, a spokesman for the National Association of Realtors, said in a statement, “MLSs should not be treated as public entities because they are not public entities. They are private databases, and are no more a public Web site than Inman News Service. Most are owned by nonprofit boards of Realtors, which spend millions on their operations. They are legal, comply with antitrust law, and are a vital force for competition in the real estate industry today.”

He added, “MLSs are a powerful force for competition. They level the playing field so that the smallest brokerage in town can compete with biggest multistate firm. The MLS makes it possible for a listing placed by the newest rookie Realtor to reach just as many prospective buyers as a seasoned professional. Buyers and sellers can work with the professional of their choice, confident that they have access to the largest pool of properties for sale in the marketplace.”

As for Nadel’s recommendations about changes to the real estate compensation structure, Cook said, “We don’t comment on different business models or commission structures used by our members.”

The article states that there are many agents who are willing to provide real estate services for flat fees of less than $5,000 per transaction, agent costs per transaction do not appear to be directly proportional to the varying level of house prices and commission compensation, and brokers in other countries charge “much lower fees for providing similar services.”

More price competition in the real estate industry “could very possibly reduce total revenues for brokers precipitously, by $30 billion or more annually,” the article states. “This gives traditional brokers a strong interest in resisting this result.”

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(I Still list homes for 6%, but I can justify my Fees.. I provide the most Quality Listing Service with More Marketing than Any of My Competition.. Its time to Earn the 6%.. Sellers & Buyers Are more savvy than ever.. Realtors Roles in the Selling Process is Definitely Changing..)

Below is a great article I found on a Changing Real Estate Industry and the perspective from a discount broker.. The business is changing, and buyers have more options that ever to find their dream home.. While there still is a need for a Real Estate agent, our Roles are changing.. 

By Rick O’Neil, president of Help-U-Sell Real Estate.

The Wall Street Journal printed a strong editorial, “The Realtor Racket,” on Aug. 12, 2005. It touched on a key issue in the battle to preserve traditional real estate commissions – the welfare of consumers. And the question arises: ‘Does innovation hurt the educated consumer?’

Innovation frequently spawns conflict. Traditionalists try to turn back the clock or at the least try to stop it from advancing, protecting themselves from change that impacts the status quo. This is what appears to be happening in the real estate industry today.

Traditional real estate brokerages, feeling somewhat overwhelmed by alternatives that allow for more consumer involvement in the selling process, seem to be using their ‘muscle’ to stem the rise of innovative competition. What they are missing is that this ‘phenomenon’ – if you want to call it that – is being driven by consumers.

We certainly encourage all real estate professionals to support the National Association of Realtors as their trade association and representative at many levels. However, we urge the NAR to remember what happened to the investment industry when eTrade entered the picture. It didn’t put stockbrokers out of business, but it did change the industry. It expanded choices for investors who now could become very involved with their portfolio management or entrust it to an advisor.

We also would ask the NAR to remember that its membership is comprised of many of the brokers and agents who have taken the lead in establishing alternative models. They pay their dues and they adhere to the code of ethics to which the NAR subscribes. They are licensed professionals who believe that they can do their jobs, serve consumers, make a nice living and do it all while saving consumers money.

As a professional who has worked both in the traditional and the alternative realms of real estate, I’ve seen the tide turning for years and in 1999 realized that alternative real estate models made sense. I watched as companies launched strategic initiatives to offer their clients better service, greater efficiency and savings.

Regarding the issue of consumer protection, consumers protect themselves by educating themselves about the differences in the options that are now available to them.

For example, discounters offer a reduced fee but they need to find out if the service is reduced along with the fee. If so, what exactly will they, as home sellers, have to handle in the transaction and what degree of support should they expect? 

Set-fee companies, on the other hand, list a home for a fee and then handle all of the advertising, buyer negotiations and paperwork involved in the transaction. The homeowner usually opts to show the home himself/herself.

An Internet company allows a homeowner to list the property on its site and will even put it in the MLS, but that’s it, usually.

If consumers are aware of the benefits and drawbacks of each option, then they should be free to make the choice.

As consumer-driven alternative models become more user-friendly and the real estate industry becomes more accepting of the idea, brokerages will have to adapt. In 1999 there were fewer than 150 set-fee real estate offices nationwide, and they were operating mainly on the West Coast. Today there are well over 1,500 operating in virtually all 50 states, and I believe that this group has the potential to exceed the 2,000-mark by year-end.

Recently, even a traditional real estate giant launched an alternative initiative, hoping to recapture sellers that are slipping through ever-widening cracks.

The reason for the growth of this segment: Consumers are confident that they can participate in the sales of their homes, and they like saving money. They’re meeting with success when they opt for an alternative approach to the sales transaction.

While Help-U-Sell is not affected by impending legislation, we are opposed to any limitations on consumer choices, as well as any legislation that limits the introduction of innovative services.
 

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You don’t need to pay 6-7% to sell your home.. Use broker incentives to create a competitve advantage over other listings.. This guy does a super job of highlighting the benefits of the flat fee listing service.. We actually offer this service in multiple MLS’s at once, so you won’t find a local outfit that provides a more exceptional package for marketing your home for sale.

Buyers.. Since we are so in touch with the FSBO community, we have an in-house list of these properties that typically out-price other listings. Since our Flat Fee sellers are not having to pay us a listing commission, they discount their asking price, putting more equity in your pocket and making the whole deal a little sweeter. I always try and push my flat fee listings to buyer clientele because these are typically the best bargains in the community. These are sellers in distressed situations and that is what buyers are looking to purchase. Providing Flat Fee listings to sellers & showing discounted property to our buyers have made Shirley International Realty Inc. one of Southwest Florida’s leaders in selling homes through the first quarter of 2008.

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Tax time is here again! It seems like only last week my 2006 taxes were being filed, but here we are again in 2008, and the deadline for 2007 taxes are soon approaching. I am not a CPA and never give personal tax advice. I’m asked many questions about personal tax deductions in relation to owning real estate, but always suggest contacting your local tax attorney or CPA for details and clarification for congruency with IRS rules and regulations. But, today I want to highlight 3 fundamental tax deductions the federal government grants homeowners that could save you money.

1-Mortgage Interest- The interest paid on your mortgage is tax deductible. If you have a mortgage for $400,000 and pay 7% annual interest on that money, $28,000 is a huge tax deduction! Take advantage of this one Sarasota! This interest can be deducted on a first or second home loan. There are a few limitations to this I believe.. One being, the total loan amounts on all homes being more than the fair market value of your home, or home equity loans totaling more than $100,000, but check with your CPA on those details. Also, filing married or single has an effect on these deductions as well.

2- Discount Points- If you refinanced your mortgage, you may be able to write off the points you paid to reduce your interest rate on the new loan. These points must be deducted proportionately over the life of your loan. So if your new loan has a 30-year term, you’ll deduct 1/30th of your points each year. If you’ve refinanced before, and you have points from the previous refinance that haven’t yet been deducted, you can write off the rest of those points in the year you refinance.

The points you paid for, to reduce your interest rate on a home purchase loan, are also tax-deductible for that year. Whether you or the seller paid for the points for you, you may be able to deduct them.

3- Capital Gains on the Sale of Your Home- You Sell Your Home! Nice… As long as this home was your primary residence for 2 of the past 5 years, unmarried sellers are immune to the first $250,000 of profit on their home, and married couples filing jointly returns are immune to $500,000 of the profit of sale.

Noted here are 3 important tax favors the federal government rewards you for owning real estate, so take advantage of these. There are many other tax benefits to owning real estate, but contact your local CPA for the details. I have a few great local CPA’s I’d be more than happy to refer you, if need be.

Hope your weekend went well! Let me know what I can do to help with your Florida Real Estate experience..

Justin
 

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Shirley International Realty Inc. is in the process of taking their Flat Fee listing services statewide. However, we are a full-service real estate company, taking full service listing opportunities, representing buyers in the purchase of Florida Real Estate, & outsourcing real estate council to our preferred clients. Part of our new ancillary marketing services provided to sellers struggling in this competitive market is our Flat Fee Rental MLS listing program.

I’ve found that many sellers are in the mindset of, “if our home doesn’t sell, I wouldn’t mind renting it out”. Many buyers are of the same mindset that if the market is at a standstill & prices are still depreciating, this may be a good time to sit on the fence & rent. A market over-saturated with renters isn’t necessarily a bad thing for a short period of time. As the demand shifts for consumers to rent, typically rental supply will go down and prices will likely go back up. This trend will continue until rental prices rise to a point where it makes more sense to buy than rent, and then the cycle shifts to, a “purchase demand-driven market”. This is when appreciation follows and inventory shrinks.

How can Shirley International Realty Inc. help get your real estate rented? We provide strategic marketing tactics to attract tenants looking to make a transition from one rental to another. Among the many venues we stage your rental on, the MLS is the most powerful showcase. The MLS is a brilliant place to market your home for rent because it is searched by all local property managers, real estate agents specializing in rentals, and people around the world that are looking for a home to rent in Sarasota/Bradenton. Our rental listing service will offer the same high-quality standards that we hold ourselves to in listing homes for sale. Click on this link to read all about the details our service entails. The cost for our “rental” service is less than the “for sale” service, so disregard price here. But the quality of excellent service does apply.

Justin

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I’ve always been curious to know exactly what property tax values are in Southwest Florida counties. After reading another dismal real estate article in the Manatee Herald Tribune, I now have a better idea what those figures are. Property taxes in Manatee County are most commonly taxed at a rate of 1.7% of the homes purchase price. These taxes are reassessed on an annual basis to determine new tax bill figures, minus any deductions you may be afforded for homestead exemptions, disabilities, etc. (Categorically there are a number of options residents may qualify for to receive assistance in the cost of their property taxes). Property tax rates can be higher in certain areas than other. Bradenton Beach, Anna Maria Island, & Holmes Beach would be jurisdictions of higher property tax brackets, taxing at rates as high as 2% of the purchase of the property. Now, let’s analyze how this information and these figures will tie your tax dollars into our local government. Our local government provides many excellent services with your tax dollars. They provide upgraded schools, quality roads, public libraries, parks & recreations, and many other amenities to Bradenton’s residents. The local government entities are as much a business as a real estate company or powerhouse retailer. They have balance sheets, and cash flows that need to be organized, employees that need to be paid, retirement plans that need to nurtured, & all this revenue that fuels these costs come from your tax dollars. In a slowing market, do these government agencies suffer like the rest of the economy? Absolutely. With homes depreciating in value, new tax bills are being slashed and these government agencies are not seeing the bottom line, as they have years in the past. Read the rest of this entry »

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 The Federal Government jumped back into the swampy pool of economic meltdown today, and cleaned up a little, aiding consumers. Wall Street experts speculated a drastic rate cut of 100 basis points, and CNBC hyped-up a potential forecast of a more drastic cut than this. This much of a rate cut would surely spike our deathly-ill economy, and put more money back in the pockets through savings on car loans, credit cards, & the dreaded mortgage payment. However, soon after 2:14pm (Eastern Standard Time) I was glued to the TV screen waiting for the result of the Feds decision. 75 Basis Points! Nice.. Not quite 100 basis points as predicted, but this is a step in the right direction for waking our drowsy economy.

The dollar actually soared and showed signs of life after continuous months of beatings against the Euro, Pound-Sterling, and other noteworthy international powerhouse currencies. When rates drop, that actually destroys the value of “The Greenback”, so why did we see this rally today? (This is what I’m asking myself as I watched my long position with the Euro drop to lower lows, and then lower and lastly, even lower).. My currency trade turned into a complete loss because the speculation of a 100 basis point cut lead the 75 basis point cut to be a let down among international banks & investors. Looks like the cut didn’t quite fill the speculative shoes, in turn, a losing trade for me; however, a learning experience. So, how does the rate cut affect homeowners and our real estate market?The rate will undoubtedly put more money and cash in the pockets of Sarasota homebuyers/investors. Many northeastern second home buyers, who annually lead the serge in real estate buying on the Gulf Coast are waiting patiently on the fence of buying because they can’t dump their northeastern homes. Our market suffers when homes in New York, Michigan, Rhode Island, Maine, Massachusetts, etc. aren’t selling. Consumers need that money from those investments to fuel their Florida purchase. This rate cut will allow them to retain more money by paying less interest, on the home equity lines of credit, as well as motivate their interest to forego the “waiting on the fence stall”, and dive into our real estate market to lock in that dream interest rate on a new loan! Anyone with a home equity line of credit will could see improvements as early as next month. Hope they see that improvement before season runs out huh..

Today was a great day for us, & our turtle-slow real estate market.. Minor improvements will result from savings on credit card bills, & car loans. The only potential hazard in a drastic rate cut like this, could result from a future rate hike due to inflation & quick economic growth. This process is all about timing and improvements shouldn’t come over night. Economic improvements should occur this way to create sustainability. Any “too quick” recoveries will create an imbalance in economic forecasting & financial markets, as well, over purchasing of real estate (which is what brought us to this point)..Congratulations Feds! You got it right today! My homeowners, sellers, & buyers should feel great about the short-term opportunities this could bring to our local real estate market.

Justin

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 Interested in promoting your website? Partner-up with The Sarasota Deed and we’ll be glad to execute a link exchange promoting both of our brands! The Sarasota Deed is designed to provide buyers and sellers with a due diligent web destination to search Sarasota Real Estate, Bradenton Real Estate, Lakewood Ranch Real Estate, North Port Real Estate, Pinellas Real Estate, Venice Real Estate, and Englewood Real Estate. 85% of homebuyers are starting their search for homes online, and the only way to put your face and product in front of those browsers, is to create a popular brand via the web.

Since our site’s launch date, we have collaborated with major search engines such as; google.com, msn.com, yahoo.com, altavista.com, About.com, DMOZ.com, AOL.com, Looksmart.com, & Business.com in efforts to reach out to buyers and sellers of Southwest Florida Real Estate. As our site continues to grow, being a sponsor and partner of The Sarasota Deed, your traffic and ratings will sky rocket as well. There is nothing more important for increasing your web/blog site’s presence than putting yourself in a network of successful sites.

Send me an email or just post a comment under this article for the request. Let’s team up and grow together!

Justin

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Business Rule #1- Love Your Customers!  Its very important for me to love my customers and give you everything needed to buy and sell Sarasota & Bradenton Real Estate. At any time, feel free to click on the updated MLS Feed into The Sarasota Deed titled, “Search MLS”. This link with lead you to my page of options. Shirley International Realty Inc. delivers a strong relationship with many Gulf Coast Boards of Realtors. Because of these strong relationship we pass on the option of searching Sarasota MLS Listings, or Bradenton (Manatee) MLS listings. The two individual boards operate as separate entities and listings in Manatee County are more likely to show up on Bradenton’s MLS, and vice versa for Sarasota. Just click on the link icon that sparks your interest and let the home, condo, land, commercial, or rental search begin!

There is no registration tied to this optional search, so feel free to sign on and search at any time without handing over personal contact info. that will passed on to my sales call center for continuous cold-calling. (I always feel when I enter email info. or ph0ne numbers to registrations, I WILL be called right in the middle of my dinner.. Our agents are eating as well and won’t be calling you) So, enjoy this optional search just added to the Shirley International Realty Inc. site. It is here for you..

 Let me know how we can assist you in any way at any time. Our customer service goal is to be second to none and the only we can continue to evolve is by listening to your suggestions. I heard a very intelligent man say today on CNN, “change doesn’t start from the top and trickle down. It starts from the bottom and grows up through Executive Chairs”.. This is brilliant.. Only by listening to you, do we know what you want. Shirley International Realty Inc. will continue to innovate on your behalf!

 Happy St. Patricks Day! (pinch pinch.. Your shirt isn’t green.. Its an East Asian shade of Celadon!)

Justin

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First of all, this “roady” sign is great! I think I saw a few Real Estate investors holding this sign on Bee Ridge Rd. a few days ago. Funny but scary! This article is dedicated to finding deals that take this sign out of the investors hands and put that million in their pocket.

With over-inflated pricing in the Sarasota/Manatee market, there’s a scarcity of investments that will result in a positive cash flow. I have a number of clients looking for these types of investments and it seems 99% of real estate agents feel, “you’re not going to find anything that will result in a positive cash flow situation”. I beg to differ (I tend to challenge anyone making comments of; it doesn’t exist, its not out there, it can’t be done, and all the rest of the blanket statements made from real estate people just not doing there homework).. First of all, let’s start from scratch.. What is the rules we want to follow to make a positive cash flow investment? Well, number one, we need tenants to pay rent. Number two, we need to find a stressed seller who’s willing to charge my buyer an over-inflated price for the investment (Tons of these currently on the market). Number three, we need a property that will result in appreciation at some point, when the market turns around. Last ingredient, we need to make sure we lock in financing at a reasonable rate that will keep monthly out-of-pocket costs down. I spent all day Tuesday and Wednesday looking for these opportunities and I found a handful of investments, with tenants in place that will make money for you on a monthly basis. Here’s a layout of my thinking & the math that goes along with calculating a good rental property. I want to add, I was only looking multi-family properties (duplexes, triplex, quad-plex).. I’m sure there’s a number of seasonal renting condos and stressed sellers who would dump their properties that could be bought resulting in positive cash with tenants in place.

I think the most important variable in looking for these deals are finding something that will appreciate over time and build maximum equity for your portfolio. It is my opinion that when this market turns around waterfront property will the first genre of real estate to grab appreciation. Waterfront property is scarce, it can’t be duplicated, and demand is the highest for this type of property. 7 out of 10 investors I work with ask, “how far is this property from the beach”? We all know when season rolls around every year, midnight pass becomes jam-packed with cars trying to find a parking spot on Siesta Key. The sun shines here and people love the beach. This will never change. So, the real estate does benefit from that demand. I always start my search as close to the water as I can get & work my way towards the listings with owners in the most stressful situations. Bottom line: Waterfront property is what people want and it will appreciate first when our market turns around. Read the rest of this entry »

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