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VT Real Estate Trends

Bargain Shopping

It seems like with every new Holiday Season American consumers are demanding more and more value from retailers. In our technological age shoppers have become ultra savvy when it comes to value and price. No longer are consumers fooled into simply assuming that the most expensive item is the highest quality item. Consumers instinctively understand that value is more important than price and that with just a little extra research they can usually find a high quality item at a better value than the highest price one.

The question then for me is why has the American consumer not been more discerning when shopping for a real estate agent or firm? With a little extra research the consumer would realize that the highest price agents and firms are not necessarily the highest quality and that there are far better values available than the highest priced firms and agents.

Thanks to advancements in technology and overall efficiency, real estate agents can now provide the same if not higher quality services at a fraction of the cost. Why then have the prices for services not changed for the vast majority of providers over the past 30 plus years?

When the precursor to today's modern cellphone was introduced in the 1980's the original model cost $4,000 per phone. Can you imagine if you walked into Best Buy today and saw a cellphone listed for $4,000? Let's see do I buy an Iphone for $300 or the $4,000 phone that takes 10 hours to charge for 30 minutes of talk time? That would be a "no brainer".

If consumers were complacent the quality and value of goods in America would never improve. Thanks to American consumer demands the quality of almost every product has improved over time and the value of those products has increased immensely. If consumers start demanding better value and quality out of real estate agents and firms things will change. However, until consumers start flexing their purchasing power, the value provided by most firms will remain poor.

We encourage you to demand better value out of today's real estate industry. Thank you.

Buyers Get a Competitive Edge With Flat Fee

Because Flat fee shares its commission with its buyer clients, our buyers have a competitive edge when bidding on houses. Here is an example:

A home is listed by a firm and the seller is offering buyer agents a 3% commission. The home is listed for $350,000.

A buyer with an agent that does not share their commission offers $325,000 for the home.

A buyer client of Flat Fee offers $330,000 for the same home.

In almost every case, the seller is going to accept the higher offer of $330,000.

At closing Flat Fee receives a commission check for $9,900. Flat Fee keeps $3,500 and gives the rest, $6,400, to our client.

Thus, even though our client offered $5,000 more for the house, they actually paid $1,400 less than the other buyer was offering for the house.

As you can see buyers gain a competitive edge by using Flat Fee.

Comments

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      Not Too Cold to Start Looking

      With bone chilling temperatures outside it may be difficult to think about Spring and Summer. However, because purchasing a home is typically the largest financial investment an individual or family will make in a year, it is important to begin planning well ahead of the time you actually want to buy. For most families the preferred buying season is in the Spring or Summer in hopes of making the physical move prior to the upcoming school year.

      Although historically there is greater inventory in the Spring and Summer, there are new homes listed every day in Vermont. Even though you may not be ready to look at homes or have even developed your house budget, by starting to follow the new listings now you will develop a better idea of the market and current values. Then when it comes time to get serious about looking in the Spring and Summer you will already have an idea of what your budget can afford. You will also have a good handle on which homes represent good value and which are overpriced.

      Stay warm and call us if you have questions about the home buying process. Thank you.

      Comments

      1. never cold call again audio on

        Wow, this paragraph is fastidious, my younger sister is analyzing these kinds of things, thus I am going to tell her.
        • sales training negley ohio on

          Write more, thats all I have to say. Literally, it seems as though you relied on the video to make your point. You clearly know what youre talking about, why waste your intelligence on just posting videos to your site when you could be giving us something informative to read?
          • Victoria Vaughan on

            I just wanted to say that using a flat fee listing is really the way to go. We did and we had a wonderful experience. Thanks.

            Censorship - Realtors Association

            On September 30, 2011, after consulting with the National Association of Realtors, the Northwestern Vermont Board of Realtors demanded that Flat Fee Real Estate remove the following blog post:

            "The average Vermont family make $51,200 per year. What do you think real estate agents make?

            According to data from the MLS and based upon the traditional 6% commission model charged by other firms, the top 5 agents in Chittenden County so far this year (January to July 22nd) have made between $292,000 and $587,000. Thus, they are on pace to make between $600,000 and $1,000,000 this year alone.

            It is remarkable during the worst recession in history that real estate agents in a small community like Chittenden County can make in excess of $500,000 per year, much less $1,000,000 per year, and continue to get away with it.

            We believe the public should demand fairer compensation models from real estate agents. We believe that our flat fee model represents a fairer compensation model and keeps our compensation much more in line with average Vermont incomes.

            Thank you."

            Exploring the Radon Issue

            Earlier this week one of the principal real estate brokers of the largest firm in Burlington suggested that my company's Radon Addendum "incorrectly states that 2 pCi/L is the US EPA recommended acceptable level for radon. The actual level recommended by the US EPA is 4.0 pCi/L."

            I would understand if a junior agent made such a comment but for a principal of the largest local firm to make such a statement stunned me. Here is language directly from the EPA's website: "EPA recommends that Americans consider fixing their homes when the radon level is between 2 pCi/L and 4 pCi/L."

            Clearly the EPA does not think that 4pCi/L is an acceptable radon level and our Radon Addendum correctly states the EPA's position.

            I urge all real estate professionals to educate themselves so that they know of what they speak. To learn more about EPA's radon regulations, click here.

            If you still have questions about radon or any other housing regulations, contact us here.

            Comments

            1. Concerned on

              From the EPA Radon Site: EPA Recommends Test your home for radon — it's easy and inexpensive. Fix your home if your radon level is 4 picocuries per liter, or pCi/L, or higher. Radon levels less than 4 pCi/L still pose a risk, and in many cases may be reduced.
              • Jacqueline on

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                • John on

                  Is smoking that bad for you? Is there a "science-settled" link beewten smoking and cancer?I have been a smoker for about 25 years. No cancer. My pulse and BP are the same as they were when I was a teenager and have never varied in my life.My grandfather was a heavy smoker all of his life. He died after his 90th birthday ... not cancer.I'm not saying that smoking doesn't cause cancer. I'm just not convinced that it does either. Seriously - when did any government agency present anything other than their declaration that they have determined an industry (a big one) was bad for you and should be heavily taxed and regulated?

                  "My Way or The Highway"

                  It always amazes me when someone says to me, "well, that is not the way we do it here." The implication, of course, is that their way is correct and my way is incorrect.

                  While I can respect a person who believes their method is the correct way, people who say, "well, that is not the way we do it here" typically do not respect any other point of view or methodology for doing something.They are basically saying, "it is my way or the highway."

                  If people never challenged conventional thinking or methodologies then there would never be any progress.It is important to always look to see if there are more efficient or effective methods for doing something.That is how progress occurs.

                  The real estate industry, more than most, seems to be filled with individuals who take the "my way or the highway approach.As a result, the industry seems to cater less to what the public wants and more to what they think is best.

                  If the "my way or the highway folks put aside their ego for a moment and listened to the public they would hear that some of the conventional thinking is outdated and that the public wants better methodologies implemented.Here are some examples:

                  1. Compensation - The public is tired of the 6% conventional compensation model. They think that real estate agents are overcompensated for the services provided. They believe that advances in technology should have led to a reduction in the conventional rate.The public wants the industry to develop a more equitable compensation model that rewards the services provided based upon the time spent by the agent providing advice, not based upon the ultimate sales price of the home.

                  2. Scheduling Appointments - Sellers do not want to receive calls from other real estate agents regarding scheduling showings of their homes. Sellers believe that one of the duties of their agent is to be an intermediary for them and to coordinate the scheduling of all showings.They believe agents who do not provide scheduling coordination are lazy.Despite this perception, firms continue utilizing this methodology.

                  3. Assisted Showings - Buyers that hire their own agent for buyer representation do not want seller agents present during a showing.When you speak to buyers after a showing where the seller's agent was present, an overwhelming majority say that the seller's agent made them feel uncomfortable.In thebuyers opinion, they hired their own agent so that they did not have to deal with the seller's agent. Again, the public believes that one of the roles of an agent is to be a true intermediary alleviating the need for them to work directly with the seller or the seller's agent.

                  4. Electronic Lockboxes - The public wants agents to utilize the most recent technology to ensure that access to their home is monitored to the best of the agent's ability.Many agents currently utilize electronic lockboxes which can only be opened by digitally encrypted keys.The keys and boxes create a permanent digital record so that the owner knows who accessed their home and when.Despite this technology being available, many agents in Vermont do not utilize it. In fact, because so many showings are done after regular business hours, many agents will leave the keys in an envelope at their office dropbox or at the property itself without ever seeing who is taking the keys.

                  5. Closing Coordinators - The public expects that if they are purchasing a property, their agent will be the primary contact throughout and that one of the duties of their agent will be to coordinate the closing.Instead of listening to the public, most firms have a "closing coordinator."These coordinators are typically salaried employees.In some cases they are paid per closing.In either event, if the firm did not utilize a third party closing coordinator then presumably they could charge the client less.Thus, not only does the public not want to have to communicate with a third party, but the methodology is inefficient from an economic standpoint as well.

                  6. Print Ads of Listings - The public does not want to see print ads of listings anymore. In our environmentally conscious society and given the fact that all buyers are looking online these days, the public views print ads of listings as a waste of paper and resources. The public would much prefer that firms utilize the internet and spend resources there rather than waste paper.

                  7. Pictures on Business Cards - Only would an industry run by "my way or the highway folks still believe that a picture on a business card is a good idea.I cannot think of any other industry where people still include a picture of themselves on their card.I don't think any business card designer today would suggest putting a picture on your card primarily because the public does not want to see pictures on business cards.

                  8. Luxury Cars and Vanity Plates - More than any other industry, in real estate there is a perceived need to drive the most expensive car possible.In many cases, agents cannot afford to drive a luxury car but do so anyway.The theory is that the public will equate an agent's track record for successful transactions with the type of car being driven.There also seems to be a theory that a vanity plate on the luxury car adds to that perception.In this day and age, the public does not want their agent to drive a car they cannot afford.The public wants agents to be themselves and drive the car that is right for them.The public is very good at picking up on facades and when they do the person putting up the facade loses credibility.

                  9.Buying Listings - There is a practice in the real estate industry known as "buying listings."This is the practice where an agent will tell a seller that their home is worth more than it is simply to secure the listing.The agent will overprice the home initially to get the listing and then when it does not sell, the agent convinces the seller to reduce the price.While this practice is unethical, it happens more than anyone likes to admit.The problem with the practice is that it not only does a disservice to the particular seller, it does a disservice to the public.It hampers the ability of the public to get a sense of the true market value of properties.

                  10.Commission Outside the Transaction - The real estate industry is peculiar in many ways, but one in particular is that its participants view their compensation as somehow distinct and separate from the transaction in which they participate.For instance, say that a buyer offers a seller $196,000 for their home. And let's say the seller won't sell for less than $198,000.Assume for a moment the seller's agent is the only agent involved in the transaction and stands to make a 6% commission should the parties come to an agreement and the sale occurs.Instead of reducing their commission from $11,760 to $9,760, the agent will risk losing the sale by telling the buyer they need to increase their offer to $198,000.If the buyer refuses, the agent will let the deal die rather than giving up $2,000.From the public's perspective the commission is integral to the transaction.It is the largest transactional fee to either side and it has the potential to bring deals together.

                  At Flat Fee, we do things differently. We work with you to meet your real estate needs. We want what's best for you. We're here to change the way people think of real estate. If you're ready for a forward thinking real estate company, contact us.

                  Why Do Agents Double Dip?

                  While many of you may think that this article refers to the classic Seinfeld episode where George Costanza dips a chip, bites it and dips again, it is not. It is however about something equally ridiculous: real estate agents double charging their clients.

                  The typical commission in a real estate transaction in Vermont is 6% of the sales price (I think it is well documented in this blog and on our website www.flatfeevt.com that this amount is excessive so I will refrain from commenting on that aspect in this blog). Typically the listing agent will split the commission equally between themselves and the buyer's agent. Thus, in a typical transaction the seller pays a 3% commission to their agent and a 3% commission to the buyer's agent.

                  The ridiculousness comes when the buyer is unrepresented. Instead of doing the decent thing and reducing the overall commission to 3%, the seller's agent will insist upon keeping both their 3% commission as well as the buyer's 3% commission. Thus, the agent gets paid twice for a total commission of 6%.

                  How can these agents possibly justify this "double dip"?

                  Some agents will attempt to justify this "double dip" by suggesting that the transaction will require twice as much time. This is absurd. The transaction may require a couple of extra minutes or possibly an hour, but certainly nowhere near double the amount of time. The amount of work certainly does not justify insisting upon a double payment.

                  At Flat Fee Real Estate we learned from Seinfeld and do not double dip. We believe other firms should follow. To learn more about how Flat Fee works, click here. Still have questions? Contact us any time of day.

                  Why Flat Fee Real Estate Canceled Its Realtors Membership

                  Many people believe that in order to be a real estate agent, you need to be a "Realtor". This is incorrect.

                  A "Realtor" is simply a person that is a member of a trade association or lobbyist group. The most well known real estate trade association and lobby group is the NationalAssociation of Realtors. In Vermont, we also have other real estate trade associations and lobbyists, including the Vermont Association of Realtors and local Realtor associations.

                  The primary goal of these real estate trade associations and lobby groups, like any trade group or lobbyist, is to promote the interests of its members. The overwhelming majority of the members of these associations are real estate firms that offer traditional models of brokerage services based upon a percentage of the sales price. These firms typically charge between 5-6% of the sale price as their fee.

                  Because the majority of members and those making the policy decisions for the "Realtors" associations support a 5% or 6% commission based model, their policies, practices and decisions are aimed at preserving this model.

                  While these trade associations have done a very good job of marketing themselves and conveying concern for the interests of buyers and sellers of real estate, they actually care much more about ensuring that their members continue to profit enormously from buyers and sellers of real estate by preserving the 5-6% commission based model.

                  Because their primary goal is to ensure that the 5-6% commission based model continues to enjoy a market dominance, they must take action against any threat to that market dominance. Flat fee real estate services such as ours represent the greatest threat to this market dominance.While it is possible that a decade ago a business like ours would not have been competitive, thanks to the great advances in technology and the internet, a business like ours is now not only competitive but represents the wave of the future in real estate brokerage services.

                  FlatFee RealEstate was a member of the NationalAssociation of Realtors, the Vermont Association of Realtors and the NorthwesternVermont Board of Realtors from 2008 until late 2011. During this period, there were several instances where it became clear that these associations had no interest in having FlatFeeRealEstate as one its members or protecting the alternative commission model we were promoting. In fact, at one point they demanded that we remove the blog post regarding real estate agent pay from our website because they were clearly concerned that the public would be alarmed by the outrageous commissions of "Realtors" inVermont.

                  It was after the "Realtors"Association demanded that we remove this posting that we decided to voluntarily cancel our membership in these trade associations. We could no longer in good conscience be a member of a lobbyist group like the NationalAssociation of Realtors. Like many lobby groups today, the National Association of Realtors is designed to protect the business interests of its members to the detriment of the pulic and FlatFee does not believe that the public's interest should take a back seat to those of lobbyists.

                  In addition to canceling our membership, we also ceased using the forms created by these trade associations. The Purchase and Sale Contract that members of the Vermont Realtors Association utilize was drafted by an attorney for theVermont Realtors Association. While most Realtors do not bring it to their clients attention, the Contract actually includes two provisions which limit the liability of the Realtors even though the Realtors are not a party to the contract. We believe these provisions, at a minimum, violate the agents fiduciary duty and loyalty to the client and may even represent a violation of the State of Vermont Consumer Fraud Act. This is yet another example of the Realtors Association putting the interest of its members above those of buyers and sellers inVermont.

                  FlatFee believes deeply in the spirit of healthy business competition inVermont and cannot in good conscience be a member of any organization which cares more about the interest of its members than it does in ensuring business competition.

                  To learn more about cases where "Realtor Associations" have been accused by the FederalTrade Commission of restricting competition visit the FTC's Website OnRealEstate Competition

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                  Real Estate Agent Pay - Chittenden County

                  The average Vermont family makes $51,200 per year. What do you think real estate agents make?

                  According to data from the MLS and based upon the traditional 6% commission model charged by other firms, the top 5 agents in Chittenden County so far this year (January to July 22nd) have made between $292,000 and $587,000. Thus, they are on pace to make between $600,000 and $1,000,000 this year alone.

                  It is remarkable during the worst recession in history that real estate agents in a small community like Chittenden County can make in excess of $500,000 per year, much less $1,000,000 per year, and continue to get away with it.

                  We believe the public should demand fairer compensation models from real estate agents. We believe that our flat fee model represents a fairer compensation model and keeps our compensation much more in line with average Vermont incomes.

                  To learn more about Flat Fee's payment model, click here.

                  Comments

                  1. Kredyty w Rzeszowie - szybki kredyt on

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                    • Gura Humorului Pensiuni on

                      Cazare Ranca Ieftina Hello this is kind of of off topic but I was wondering if blogs use WYSIWYG editors or if you have to manually code with HTML. I'm starting a blog soon but have no coding expertise so I wanted to get advice from someone with experience. Any help would be greatly appreciated!
                      • Gabriel on

                        Oh what a good question.People buy life isranunce, usually in trust so it doesn't also get included in the estate, in order to pay estate taxes. That's about 97% of what you need to know. Outside of that you just need to look around for the specific information you're looking for.

                        What's Behind the Numbers?

                        Many real estate agents throughout the Country tend to claim to be the #1 agent. Some claim to be the #1 agent in a State, County, City or even for sale of a particular type of property (such as condos or apartment buildings).

                        It is unclear to me what agents base these claims upon. I assume they base their claims upon data found in their local Multiple Listing System or MLS. If this is the case, then the numbers may actually be somewhat deceiving.

                        The MLS data does not necessarily represent the performance or statistics of an individual agent. For instance, if an agent has "team members" that work for them, then the team leader may be taking credit for sales actually procured initially by another agent. Also, in some firms around the Country, the owner of the firm will take credit for all of the transactions completed by the agents in the firm. Thus, while the agent may technically be "Number 1" in a particular area, there may be more to the story.

                        At Flat Fee Real Estate each agent is given credit for his or her own transactions. While our agents may never be able to market themselves as "Number 1", our clients will know that each agents statistics represent individual performance and not the statistics of a team or group of agents.

                        I encourage every buyer and seller to question agents on how they recognize individual performance in their firm. This may help buyers and sellers to have a better understanding of the marketing claims made by agents in their area.

                        Flat Fee doesn't go out-on-a-limb to make claims, we just give you the facts. To learn more about Flat Fee or to contact us, click here.

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