Are Buyers Agent Fees Tax Deductible?

Hand on a pile of tax documents

Are Buyers Agent Fees Tax Deductible?

If you’re looking for a potential buyer to sell your house, keep in mind that selling property allows tax deductions. As 2018 introduced some new tax codes or tax cuts, it has changed certain regulations and rules for homeowners. However, rest assured that if you’re planning to sell your house in 2020, the tax deduction still amounts to sizable savings when filing with the IRS. Does this tax deduction include buyers’ agent fees? Are the buyers’ agent fees tax deductible? Are the Buyers’ Agent Fees Tax Deductible? If you want to purchase a property or house for investment purposes, the cost to hire or use a buyers’ agent is tax-deductible (“cost base” or acquisition forms part). However; it is always better to check with a professional accountant to learn about the fees and whether they’re tax-deductible or not in a specific case. Put simply; you may deduct costs associated with home selling, such as advertising costs, legal fees, and realtor or agent commission. What Is The Buyer’s Agent Fee? Keep in mind that if you’re a buyer, your seller’s agent and your agent split a fee (commission). Typically, it is 5 to 6 percent of the total purchase price of the property. While the seller pays this fee, technically, it depends on how much a seller lists the home for. If you’re not interested in paying the buyer’s agent fee, you can choose a flat fee pricing model that has fixed rates for real estate services. When you work with reliable flat fee real estate brokers such as CA Flat Fee, you get more services than your average realtor while saving a lot of money.  Why Do You Need A Buyers’ Agent? When selling a property, engaging a professional buyers’ agent in the process may help in numerous ways. An agent not only saves you time, money, or stress but helps you with your investment. You gain more knowledge about the home selling process that helps you make an informed decision. With a buyer agent, you have access to extensive analysis and research into comparable market data and past sales. It protects you from making hasty and emotional decisions and paying extra. Plus, you gain access to more homes, silent listings, and a wide network of various investment opportunities. Typically, you need buyers’ agents for the given reasons: Save Time Working with a buyer’s agent reduces the time you spend searching. Otherwise, you need to check 60 to 200 properties to understand the market. Buyers’ agents can cut down the purchasing process to under 30 days. These agents can save you time that otherwise would go into attending inspections on weekends and completing lengthy paperwork. [lyte id=’sTp07cGbtto’ /] Additionally, buyer’s agents have access to most listings through an MLS, as well as homes that are For sale By the Owner. Save Money Buyer’s agents prevent you from making quick and emotional decisions and paying too much. They know the tricks to secure a house at the lowest price and can leverage this knowledge as you tap into the process, and have experience in negotiating the price as well as selling conditions. Most agents can complete a professional assessment to give you the confidence to buy or sell at the right price. Remove Stress from the Buying Process Buyer’s agents remove the pressure and stress of searching and dealing with realtors and agents and remove the frustration of constantly outbid at-home selling auctions. Buyers’ agents save you stress if they’re knowledgeable, experienced, and have your best interest at heart. They deal with the seller by taking emotion out of the negotiation and offer the right advice on the home’s value. With a vast agent contact database, a buyers’ agent helps people find off-market homes or properties. What Can A Real Estate Agent Deduct from Taxes? Licenses and Fees: For real estate agents, yearly fees are a common cost of doing this business. This is the reason they are deductible. The category of tax deductions includes the cost of professional membership, MLS dues, and renewal fees of state license. Also, a portion of some dues goes to lobbying, and advocacy is not deductible. You need to address it when filling.   Business and Insurance: Both Errors & Omissions and business insurance are deductible as real estate tax deductions by IRS. You cannot deduct any self-employment tax from taxable income; deducting real estate taxes is mandatory for the business. You can also look into selling your house under LLC for added tax benefits. Commissions Paid: All the commissions you pay to employees or agents are deductibles as regular business expenses. This is, without a doubt, a crucial deduction that adds up fast. Do Buyers Pay Realtor Fees? You may know of realtor fees as commissions. These are typically a part of real estate transactions. However, a buyer doesn’t usually pay realtor fees. Partnering with a flat fee realtor can help save a seller money. Typically, it is 3% to list a home for sale, but with CA Flat Fee we charge just $3,000. Does the Seller Pay the Buyer’s Agent? Typically, the selling agent contracts with the seller to receive a commission or fees. If a buyer hires their own realtor, the selling agent divides the commission with other realtors. In many parts of the USA, the seller pays the buyers’ agent fees. Conclusion In a nutshell, having a buyer’s agent by your side to close the deal can benefit you in many ways. Their fees are tax-deductible, especially when you buy a house for an investment purpose. However; it’s best to consult with a professional to understand the criteria of this deduction and how it may benefit you.

published on May 31, 2021

Does Zillow Take a Commission?

An aerial view of a neighborhood

Does Zillow Take a Commission?

For many sellers, the idea of listing a property, scheduling an open house, and decorating it seems overwhelming. Even if your property on sale is spotless, selling it can be a time consuming and tedious process. That’s where popular online real estate marketplaces like Zillow come in. But does Zillow take a commission?  In this post, we explain everything you need to know about Zillow’s work process and whether it takes a commission or not. Does Zillow Take a Commission? No, Zillow doesn’t take a commission from home sellers for listing their home or property. The online real estate marketplace only introduces sellers to potential buyers who work with different brokers. These brokers of prospective buyers may charge a fee. That is to say, there is no fee or charge to list a home on Zillow FSBO (for sale by owner). The real estate marketplace aims to simplify the home buying or home selling process for both parties. Yet, even if you use Zillow to list your house for sale, you might have to pay a commission to the buyer’s agent.  Other than that, with a platform like Zillow, you don’t have to worry about paying FSBO listing fees. Not having to pay these fees is a great benefit for anyone considering managing their own listing. You can choose Zillow… To start receiving offers to purchase your property directly within 48 hours To take a 10 percent to 15 percent discount to sell the property To eliminate some of the hassle and stress from the house selling process   What is Zillow FSBO and How it Works Zillow FSBO (for sale by owner) refers to listing your property on an online real estate market for sale on your own. As mentioned above, Zillow is an online aggregate website for listing real estate properties. It has accrued over 70 percent of the online search traffic for real estate listings.  The FSBO listing process makes selling a property on Zillow without hiring a professional realtor or real estate agent easier. However, that also means every aspect of selling and marketing your home is your responsibility. These responsibilities include listing, negotiating, staging, pricing, and closing your house, among other services that real estate brokers usually do for you.  However, if you don’t want to pay additional charges or think that hiring a real estate agent will eat into your profits, you can opt for a flat fee real estate agent instead. It is an excellent way to get the exceptional services you expect from a competent realtor at a fixed cost.  Does Your Property Show On Local MLS When You List On Zillow?  No. Most people who use platforms like Zillow also choose to get their properties on an MLS (multiple listing service). That’s mainly because many FSBO sites don’t have enough traffic or visitors and rely on MLS listings to actually sell a house. That doesn’t mean that listings posted directly on Zillow wont be seen, but they are not syndicated to MLS. You’d need to hire a licensed real estate agent or a flat fee broker to ensure a property is on an MLS, which would allow other local buyer realtors to see the property for sale. Listing on an MLS allows for current and accurate information for buyers, as well as over 200 fields of information, which most can be identified through acronyms. Zillow currently offers 40-90.  How Does Zillow Make Money? Since Zillow does not take commissions on FSBO listings, they instead allow real estate agents to pay for “buyer leads”. This allows realtors to become Premier Agents in their system.  When buyers request to be contacted regarding a property a list of Premier Agents will be shown prior to the property owner. As a seller, this means that interested buyers could reach out to an agent first instead of connecting directly with you. Working directly with a flat fee realtor avoids this entirely since the property would be listed directly on an MLS with one selling agent listed. As a seller, you would be able to select and work directly with your agent and they would handle all interested buyers. This also ensures you avoid solicitations from Zillow agents looking to work with you to sell your home. Does Listing FSBO on Zillow Save Time? As the selling agent of your own property, you are able to instantly list your home on Zillow. You do not need to go through a third party or wait for an agent to post on MLS. However; before setting up the listing on Zillow there are items that need to be completed first that will take time and research, such as… Researching home features and benefits Scheduling professional photography and staging Researching market value Managing showings with buyers and agents All of the above items are necessary to ensure that your listing is ready for buyers to review. The cost savings by listing on Zillow may not outweigh the time required to successfully list your home.  Is It a Good Idea to List Your House on Zillow? Listing your house on Zillow can be a good idea if your primary goal is saving money while selling your house. Especially since Zillow is free and other services will charge an upfront fee or commission. Additionally, for those interested in managing their entire home listing, Zillow can be an enticing alternative. However; their services can be limited compared to other real estate options. If you list on Zillow, you would be fully responsible for staging your home, taking professional pictures, accurately listing all aspects of your home, and selecting an appropriate selling price. The real work truly begins once an offer is received and as a home owner you need to navigate many pages of contracts and legal addendums, work with title and escrow companies to transfer ownership deeds, manage inspections, negotiate repair requests and support appraisals. This all occurs after taking many phone calls and coordinating many showings and sifting through the minute … Read more

published on May 31, 2021

Is Zillow a MLS?

Woman using a laptop to look for real estate listings

Is Zillow a MLS?

Zillow, as one of the most-visited real estate websites in the US, offers consumers an on-demand experience for buying, selling, financing, and renting homes. It allows seamless and transparent end-to-end service. Like multiple listing services, dozens of realtors rely on its market across the country. Seeing many similarities between Zillow and a multiple listing service (MLS), many homebuyers and sellers are wondering, “Is Zillow an MLS?” If that’s your case, you have come to the right place. Is Zillow an MLS? Zillow is not an MLS. While many consumers believe that Zillow is the same as an MLS, many real estate agents consider Zillow less effective compared to using multiple listing services for selling or buying properties. Zillow itself is a real estate database and marketing company selling advertising to real estate agents and brokers, and connecting them with potential buyers. There are several reasons why people might think Zillow is an MLS:  It is free to list a house on Zillow FSBO (for sale by owner) or with a real estate agent.  It shows listings for houses for sale by owners and by agents  It is an excellent marketing tool to sell homes  It shows images, layouts, and relevant information about the listed houses Uninformed sellers think that if they list their house on Zillow, most agents and buyers will know that it is for sale only because it’s on the site. They expect their house will receive an excellent offer and capture buyers’ attention right away. However, it doesn’t happen this way. Typically, when sellers list their houses on Zillow for sale, they receive more calls from telemarketers or real estate agents looking for a lead than from potential buyers. Most real estate agents would rather sign a listing agreement in which they make sellers agree to pay a commission of six percent. This is perhaps the reason many sellers and buyers consider MLS more reliable than Zillow when it comes to selling and buying properties. Most realtors and real estate agents use MLS to find homes for the potential buyers they work for. In general, real estate agents use MLS more than they use Zillow to find the right deal for their clients. Why Do Realtors Use MLS? Realtors, including flat fee realtors, use MLS because they contain more accurate and comprehensive information. Most importantly, MLS, in contrast to Zillow, provide non-public information that’s relevant to the agents and their buyers. While Zillow has 50-80 fields of information and pictures about the properties, an average MLS has more than 300. That means Zillow provides limited information about a property. In contrast, an MLS includes all the market times, listing information, photos, unsuccessful listings that date 10 to 20 years back. Zillow only includes information that depends on whoever listed the property, the relationship with real estate brokerages, and the MLS in the area. In other words, Zillow has no effective mechanism in place to help the platform correct listed information.  MLS have experts who constantly look out, identify, and report errors. Most importantly, MLS have the ability to fine monetary charges to the participants or realtors who enter false or incorrect details or avoid correcting errors. Does Zillow Use MLS? Keep in mind that many MLS are associated with the Zillow Partnership Platform (ZPP). The relationship between brokers and Zillow creates this association and listing information. One of the common goals of ZPP is to show and deliver curated, accurate, and real-time data of listings to serve both consumers and agents. Now, multiple listing services take advantage of the Zillow Data Dashboard, which is a part of the Zillow Partnership Platform. It is typically a reporting platform and listing management system that increases control of MLS brokers and members to send direct information to Zillow. Does Zillow Feature Every MLS in The Country? Currently, Zillow doesn’t feature every MLS in the country. However; the online marketplace is working on including more. There are currently over 600 MLS in the United States, and Zillow is trying to understand the relevance of each one before partnering with them. Can Home Sellers List on Zillow without MLS? Yes, home sellers can list their property on Zillow without paying any realtor fees. However, only a small percentage of people can close the deal themselves this way, also MLS uses a lot of acronyms that you may not be familiar with. Over 60 percent of home sellers try to list their houses themselves on Zillow to save realtor’s fees or commissions, only a few of them end up sealing the deal. Partnering with a flat fee agent can help home sellers save money, but also receive the benefits of an MLS listing.  Is Listing on Zillow Worth it? According to Forbes, Zillow might offer sellers up to 10 to 15 percent discounts. That means, if you’re an experienced home seller, listing your house on Zillow might be worth it as it may help you eliminate hassle, effort, and stress from the whole process. If you aren’t, you’ll benefit from the services of a professional broker who has in-depth knowledge of the local market and what services will suit you the best when listing your house. For instance, opting for a flat fee model to list your property is a great way to get competent real estate services at affordable prices. From showing coordination to closing, you can get everything at a low, flat fee price when you work with an experienced and renowned flat fee broker.   Summing Up All in all, while Zillow offers some significant advantages to realtors and home sellers, it is not always the best platform to sell your house. You can use it to get leads by repackaging details from MLS syndication and various other sources. Thus, you need to remember that it is not an MLS but may serve as a part of it for home sellers. 

published on May 31, 2021

How to List on MLS Without a Realtor?

Woman listing her house on MLS websites

How to List on MLS Without a Realtor?

The housing market is a hot and busy platform. Selling a house typically requires the services of a licensed real estate agent. Often, it may cost sellers a large commission which is normally half the total of 4 to 6 percent. These charges are called commission or cooperation fees. This makes many potential sellers wonder, “Is there any way I can list my property on a MLS without a realtor? If you‘re looking for the same answer, we have you covered here. In this post, we elaborate on everything you need to know about listing a property without a realtor. Can I List on a MLS without a Realtor? Yes, you have a few options to list your home on a MLS “for sale” without working with a realtor. All you need is to list your property with a flat-fee service or find a site that accepts “home for sale” by homeowner listings. A MLS is a primary listing database for licensed brokers and real estate agents who use it to list sellers’ properties. The purpose is to find homes for buyers that other realtors have posted. The comprehensive database platform automatically posts every listing to a large number of real estate websites such as; Realtor.com (over 65 million monthly visitors) Zillow (160 million monthly visitors) Trulia ( 58 million monthly visitors) How does Listing Your Home on a MLS without a Realtor Benefit You? Listing your property without hiring real estate agents may benefit you in many ways. It makes it easier for buyers to look up your home as a MLS distributes listing to hundreds of realtor’s websites, although best be aware of the MLS terms so you can identify which properties are the best deals. Your home gets more exposure to a larger pool of buyers. It means you have a chance to get the right deal to sell your property. You don’t have to pay costly commission fees to the real estate agent to list your house on a MLS. Realtors representing buyers see your listing on a MLS. Many agents are interested in finding the most accurate and current information about properties. They use a MLS to get information. The buyer lead goes to the seller (which is you) as YOU list the property to “sell by owner.” The listing service serves as a lead generator and passes each buyer (interested in your property) to you directly for handling. The listing package includes everything from purchase contracts, addendums to disclosures. You have all the control and power over the details or information that goes into your listing as long as it doesn’t violate the MLS rules. You don’t need to worry about real estate agents misinterpreting or misquoting your home. You have control of the photos used to sell the house. You can either take them or hire a professional photographer. How to List a Home on a MLS without a Real Estate Agent? Listing your home on a MLS without a realtor is relatively less common, but it is certainly possible. As mentioned above, you need a la carte firm or a flat fee service to generate or create a listing with home details, photos, and complete paperwork. Flat fee broker companies can help you generate a listing without a realtor. They can also help you show your home to potential buyers and negotiate deals if you pay an additional fee. The firms are a low-cost, viable way to list your home on a MLS.  You can hire the sole service of a flat fee service to la carte real estate How to Use a Flat Fee Service With the increasing use of technology in the housing market, sellers and buyers are inclined towards new alternatives and selling arrangements. The goal is to save on the 6 percent commission that goes to the real estate agent and negotiate a home sale independently. That is why many sellers opt for a flat fee service when they think they know everything about the home-selling process. To list your property on a MLS using a flat fee service, you have to gather essential information about the home and capture photos. The company requires you to fill necessary forms and pay charges to place your property on the MLS. Follow these steps to list your property on a MLS using a flat fee service Collect necessary information about the home Capture pictures of the features and rooms to display the house Use your referrals and research to find the best flat-fee service Register your account and fill listing online Review the listing agreement and pay a fee Complete MLS documents when you receive a mail Once you complete all the steps, a flat fee service will add your listing to the MLS. Using a service like CA Flat Fee avoids all the steps above. For one low flat fee, you receive a full service broker that includes professional real estate photography, digital marketing, showing coordination, and sales and closing process that would normally be hard if you go with a FSBO route! Can You Join a MLS without being a Real Estate Agent? A MLS or Multiple Listing Service is primarily to help realtors or brokers to share information to add value and reduce costs for clients. As member brokers operate or own a MLS, the platform refuses to allow people to list their property if they’re not working with the members. Or, you need a license to join the board of realtors. Does Flat Fee Service for a MLS listing work? Typically, when you hire a flat fee service, it allows you to access multiple listing services. If you’re a FSBO and don’t pay an additional fee, you need to do everything yourself. Working with a company like CA Flat Fee provides you more than just an MLS listing. You receive full service just as you would if you were working with a realtor to assist you in selling your home. Conclusion All in all, real estate is … Read more

published on May 31, 2021

How Does Flat Fee Real Estate Work?

Small model house between magnifying lens and piggy bank

How Does Flat Fee Real Estate Work?

Flat fee brokerages don’t follow the traditional model to find or show properties to the clients anymore. They generate new and creative ways to meet clients’ requirements. These changes in the model regarding payment structures are an example of some evolving trends. Flat fee real estate brokerages are becoming a popular way for homeowners to save on their home sale while benefiting from many real estate important services. But how does flat fee real estate work? How Does Flat Fee Real Estate Work? Flat fee real estate works by offering a fixed amount customers pay to the broker instead of the typical 5 – 6% on the final sale price. As it is not a percentage-based commission, it helps home sellers save a great deal of money, depending on the price of their property. Many homeowners are happier with the listing experience when they work with a flat fee real estate agent. The agent provides all necessary support and services the client truly needs when they sell or buy a property. Flat fee real estate changes the real estate industry as it offers listing services at a fixed and fair price, adding a few services many realtors don’t offer. Typically, flat fee real estate brokerages’ services include: A digital streamlined workflow Email and social marketing Direct mail campaign Conducting showings and open houses Featured listings Contract negotiation and reviews 360-virtual tour video and professional photography Can I Save on Commissions Using Flat Fee Listings? Sellers often go to flat fee multiple listing services (MLS) because they want to save money on commissions. However; it is important to keep in mind that, sometimes, avoiding realtors’ commission completely is not possible. It is also very important to note that most flat fee MLS services are not full service brokerages, so it is wise to clarify up front. While a seller might avoid a 3 percent listing commission using a flat fee MLS, they still have to pay a competitive commission to the buyers’ agent. The commission is typically not more than 2 to 3 percent of the total sales price. The savings may come at a high cost. While using flat fee listings, the seller is in charge of the full sale in several cases, from initial price to final negotiations. If you’re interested in a good alternative to the percentage-based commission, consider hiring a flat fee broker. A full service flat fee real estate agent handles all of the buying and sales process while saving you big on your commission fees.  Why Should You Work with Flat Fee Real Estate? Note that not all real estate agents are equal. That is why we emphasize reading reviews before you make any decision. If you think you have enough knowledge of the housing market and also want to save your money, working with a flat fee real estate agent is an ideal plan to sell your house. Here is a rundown of benefits you get when opting for flat fee real estate. Cost: You save money as a flat fee real estate agent helps you reduce the commission price nearly as much as you pay the percent-based commission of a traditional realtor. Also, you are aware upfront about all the costs regardless of the sale price of the home. Control: A full service flat fee agent is always available for your needs. In fact, you have full control over the entire selling process that includes changing the listing price and scheduling showings through a simple call to your agent. Plus, you get access to the MLS listings that offer you plenty of information and comparable information. Commitment: Working with a flat fee real estate agent typically requires less commitment. Often conventional brokers or agents force you to make a contract or an agreement. If you decide to stop using their services, the contract’s restrictions make it challenging for you. Are Flat Fee Realtors and Flat Fee MLS the Same? Note that a realtor who offers a flat fee multiple listing service (MLS) is different from a full-service flat fee agent. Flat Fee MLS only agents suit For Sale by Owner clients the best. Some realtors are also referred to as “limited-service brokers”. They only offer “entry-only services,” known as flat fee MLS. On this platform, these realtors list your house into an MLS.  The fees charged by limited-service realtors may vary based on different options clients need. That means clients may choose a daily or half-yearly plan. They can pay realtors each day to list the home on the MLS, or they can opt for a six-month plan. There is also an option for a larger fee structure to get longer access to the multiple listing services. Flat fee MLS listings cost clients a one-time fee. It includes: Listings on the MLS (only certified and licensed realtor can provide it) Listings on Trulia, Zillow, and Redfin, and other sites That is to say, when you choose flat fee MLS, you don’t get any additional services from realtors such as price negotiations, showings, open houses, or assistance in paperwork when closing. Some flat fee MLS agents don’t even offer any professional photography for online listings. [lyte id=’nkia30I2i0Q’ /] How to Choose the Right Flat Fee Real Estate Agent Working with the right flat fee agent to sell your home is essential to make the most of this option. Before you agree to sell with a flat fee real estate agent, we encourage you to check reviews and testimonials from previous clients.  It is also easier to double-check your agent’s reputation if you’re active on social media. See what the previous clients have to say about the services. Consider if your flat fee real estate agent worked in the area before. As the real estate industry moves quickly, you must choose someone who understands the local market. Conclusion All in all, you may find many types of brokers and agents in the real estate world. A flat fee real estate agent is safer to … Read more

published on May 31, 2021

Where Is the Real Estate Market Headed This Summer?

View of three neighboring houses

Where Is the Real Estate Market Headed This Summer?

For almost 2 years, the ongoing pandemic has put the real estate industry on hold. However, the housing market has bounced back without slowing down homebuyers’ activity. The high buyer demand has created fierce competition in medium-to-small metro and suburban areas across the US. Despite uncertain and hard economic times, the booming housing market has compelled investors and buyers to wonder: where is the real estate market headed this summer? If you have the same question in mind, we have you covered here. In this article, we explain what you should look forward to in the real estate industry this summer. Where Is the Real Estate Market Headed This Summer? For summer 2022, the real estate market will experience almost the same as 2021, although to a lesser degree. Market changes will still come from increased demand from buyers and more property selections. Continued renter affordability and low inventory problems might persist through the warm season. The end of the year may begin to level out if the supply gets squared away. However, prices will continue to rise through the summer — even with interest rates ticking up and slowly pushing out buyers. Real Estate Market Trends for 2022 The fast rollout of the coronavirus vaccine has made many people hope that the effects of the pandemic are diminishing. Some housing market trends will continue to rise in the coming years. Here is a glimpse of a few trends that are all set to shape the housing market this summer. The interest rate can rise yet will remain comparatively low. Home inventory is expected to increase but will stay high in a seller’s market. Increased housing inventory yet low mortgage rates may push prices higher. Similar to suburban areas like Monrovia, there’s a high homebuyer demand in suburban and urban areas, although the number of people looking in the suburbs increased to 42 percent more than pre-pandemic levels. Rental assistance may ease eviction worries for tenants, although it will not diminish the long-lasting impact of the pandemic. The renovation boom will continue as Americans move into larger homes and take advantage of remote work flexibility. There’s an expected shift from multi-family to single-family rental homes. Buying in the Real Estate Industry The COVID-19 pandemic has driven mortgage interest rates to historic lows for 2020. This might sound bizarre to you, but even 2022 began with a record low for the new interest rate for thirty-year. Realtor.com chief economist Danielle Hale says sales of existing homes will rise 6.6 percent, with 2022 having the second-highest sales in the past 15 years. Moving forward, the mortgage rate of interest trended upward whereas remained low from an economic and historical standpoint. That is to say, the desire for a better space, low interest rate, and continuation of the new households in the USA increased demand for home buying in 2022. The same demand seems to drive through the start of the current year. Most areas include the seller’s market, which means there are not enough properties available for the active buyers. As of January 2022, the national inventory of active listings declined by 28.4 percent over last year. Despite that, the January median listing price for active listings increased to 10.3 percent. Experts also expect housing prices to climb 5.7% this summer. Selling in the Real Estate Industry One of the primary reasons for the low supply of properties on the housing market in 2021 was remote working. Homeowners who already had space for virtual schooling and remote working didn’t want to relocate. Many homeowners were hopeful that the pandemic would end soon. That is why some sellers were more inclined to re-enter the market. In addition to this, the vaccinations increased consumers’ confidence, making home selling relatively less risky. In fact, many sellers are looking for flat fee brokers to list their homes as experts expect inventory to increase in June and July as housing marketers head into summer.  National Association of Realtors chief economist Lawrence Yun says that home sales are the best they have been in 15 years. Although they don’t expect 2022 to exceed 2021’s performance, sellers may still get the upper hand when selling properties this summer, even if interest rates may balance the market. It is important to note that these figures represent housing predictions on a national scale. The effects on the different housing markets may vary widely. Consulting an experienced and professional real estate agent will help you explore more about property pricing and activities in your area. Renting in the Real Estate Industry As mentioned above, the financial impact of the pandemic has not been kind to the rental market. Renter households are deeply affected by the shutting of restaurants, retail stores, and workplaces requiring personal work that people didn’t consider essential. That makes tenants’ ability to afford rent a growing concern. The U.S. Centers for Disease Control and Prevention extended its renting and eviction moratorium to halt evictions for people encountering financial difficulties. It offered more time to the State government to distribute the federal rental assistance. However, National Association of Home Builders chief economist Robert Dietz forecasts a six percent growth for single-family built-for-rent construction. Although there is economic recovery, distributed rental assistance, and decreased cases of COVID, it is still unclear if there will be a reduction in mass eviction this summer. Will Real Estate Go Up or Down in 2022? Although the final data for 2022 is yet to be released, the real estate agents and housing market experts expect new property sales to get eight percent higher and current property sales to get three percent higher compared to 2020 and 2021. The housing market is likely to soar by 3.6 percent this summer. The housing market has been relatively robust in 2021, and the same trend is expected to follow in 2022, with a potential increase in listings this summer. Is It a Good Time to Buy a House Right Now? While new and younger homebuyers will have … Read more

published on May 26, 2021

Flat Fee Real Estate Broker California Laws

California home for sale

Flat Fee Real Estate Broker California Laws

Recently, the California legislature has passed several new real estate laws that brokers should be aware of. Thus, it’s crucial to quickly examine your practices to know if you’re abiding by the new flat fee real estate broker California laws. Flat Fee Real Estate Broker California Laws Real estate brokers operating in California need to comply with numerous state laws as stipulated by the Department of Real Estate. Below are some of the regulations you should follow. Homestead Exemption (AB 1885) If you own a property in California, you are eligible for a homestead exemption. It protects you against losing your home if you file to other creditors or for bankruptcy. The exemption amount has not changed in a while. However, starting this year, creditors cannot touch $300,000-$600,000 of a property’s equity.  This change is aimed at enabling you to clear your debts and keep your home. For a lien to be placed on a home, the judgment should be high enough to cater for the median home price, at $600,000 maximum. So, unless you owe more than $600,000, you can keep your property despite a lien.  Before this law, the lien could mean a foreclosure on a property if the judgment for an individual was $75,000 or $100,000 for more than one person. Although judgments can lead to financial stress as you may have to sell your home, at least it won’t lead to a foreclosure. [lyte id=’mU69g6Ao47A’ /] Fire Notice for New Homebuyers (AB 38) This law requires developers to tell homebuyers if the property they want to buy is in a high-risk fire area. For flat fee real estate brokers, they’ll have to do the following: Sign a one-page document at closing advising buyers on preparing their property for a fire. List items that might be vulnerable to fire like combustible landscaping, rain gutters, vents, and roof coverings as they are not fire-resistant. Determine if a home is built in an area prone to fires by consulting companies that prepare California Natural Hazard Disclosure Reports. Keep in mind that this law focuses on properties developed before 2010 before stringent building standards were enacted to protect homes from fire damage.  Right of First Refusal (SB 1079) This law stops the Great Recession from repeating when investors snapped up several foreclosed homes. Instead, it requires each home to be sold individually. This law creates new ways an investor can lose a home even after winning it during an auction.  Under the new law, if a homebuyer buys property at an auction and doesn’t live in it, renters can get the property themselves. The buyer can submit to purchase the home in the next two weeks after the auction. However, the person that won the auction will lose the home if the buyer gets the money in 45 days.  Note that the amount paid by the buyer should equal the money the auctioneer paid. The investor can still lose the property in the next 45 days if the buyer doesn’t put in an offer. Anyone that would want to stay there can bid on the home if their offer exceeds what the investor paid. This second scenario is rare because the potential buyer could have gone to the auction. The Property Tax Transfers and Exemption (Prop. 19)  This law allows Californians aged above 55 years to sell their home, buy another one and take their tax with them. Generally, houses after purchase have tax rates go up and values reassessed. This amendment allows elder Californians to enjoy a lower tax rate if they relocate.  Under this law: A person can relocate up to three times and still receive tax benefits in California.  It also applies to persons who have lost their properties in natural disasters or with severe disabilities.  Additionally, it allows older persons to buy expensive homes and blend their taxable value with what they have to create a lower tax rate. However, Prop. 19 reduces or eliminates tax benefits for transferring your home to your children. If your child gets a property whose value is below $1 million and decides to stay in it full-time, the tax rate will remain the same. If they don’t live in the house, they lose the tax benefits.  Home Association Rentals (AB 3182) In the past, a Home Association would limit rentals to 10% or even prevent them. However, homeowner association regulations must now allow 25% of their homes to be rented. The new regulations are aimed at ensuring more availability of rental properties in California.  Bear in mind that the law doesn’t limit rentals to 25%. This means Home Associations can allow all homes to be rented in a single-family home community, townhouse development, or condo building governed by a Home Association. Some of the law is also open to interpretation like if a Home Association has only three units and renting one home would be more than 25%.  In such a scenario, it’s likely one unit will be rented out. Another thing to remember is that the law prevents Home Associations from creating rules that require owners to have lived there not less than one year to rent out a home. HOAs can also block short-term rentals. Housing Development (AB 168) This law requires local governments to consult and offer notice to Native American tribes to weigh the effects of a project on cultural trial resources. The project may not be eligible if: The Native American tribe and the local government do not agree that no cultural trial resource could be affected by the project. The Native American tribe and the local government find a cultural trial resource that might be affected by the project and both parties fail to come up with an agreement regarding how those tribal cultural resources will be treated.  The proposed development location is a cultural resource on a registered list. Conclusion Flat fee real estate brokers should consult with competent legal attorneys to ensure compliance with new regulations. Understanding applicable laws will prevent … Read more

published on May 5, 2021

What Is a Full Service Flat Fee Real Estate Broker?

Flat fee real estate broker giving professional advice to client

What Is a Full Service Flat Fee Real Estate Broker?

Most home sellers usually wonder: “What is a full service flat fee real estate broker?” Full service brokers can help you boost your listing’s visibility significantly more than if you’re selling your property for sale by owner (FSBO). They can also help you save thousands of dollars because they charge a flat rate.  What Is a Full Service Flat Fee Estate Broker? A full service flat fee estate broker is a realtor who charges a flat fee instead of a percentage of the selling price. The broker also offers comprehensive services and handles everything for you from listing your home on the MLS for the right price to marketing it and organizing all showings.  Additionally, full service flat fee brokers coordinate offers and negotiations plus any other activity related to the sale of your property. They provide the whole package instead of choosing which services to offer.  What Can a California Full Service Flat Fee Estate Broker Do for You? One benefit of choosing full service flat fee brokers is how much they simplify the home selling process. Below are other good reasons to choose these brokers.  Conduct a Comparative Market Analysis Putting a sign up in your backyard and marketing your home online may seem simple. However, there’s more to it. Good full service realtors research similar homes in your area that have recently sold or are listed to compare to yours.  The realtors also pull statistics from the area, check the property value of neighboring homes, and use this data to determine the value of your house. This is crucial since getting the right price is the most challenging task for FSBO sellers.  These realtors are able to conduct an accurate Comparative Market Analysis (CMA) because they’re knowledgeable about the local market and will ensure you begin with the optimal asking price.  Take High-Quality Professional Photos of Your Property Full service flat-fee agents also take high-quality pictures of your property or hire a professional photographer to capture good photos. They usually work with a real estate photographer to determine the sharpest color and contrast plus the best angles to get prospective buyers immediately.  The pictures are then resized and cropped to highlight positive attributes. Each photo is posted into the MLS database with an enticing full-length description. Some full service agents will also have a stager and stage your property for an attractive offer. Home staging has shown to increase the sales price and reduce the time it takes agents to sell a home. Professional home staging includes decorating your house in a way that’s appealing to prospective buyers. Keep in mind that staging happens during and before the photography session. [lyte id=’hPNc99iFf4Q’ /]  List Your Home on the MLS Database Apart from offering the above services, flat fee brokers also list your house on the MLS once they have amazing pictures and an attractive price. However, listing your home with a price and incredible images isn’t enough.  They usually ask clients some questions about their homes to write an appealing description. The description is your opportunity to tell potential buyers the information not captured in the photos such as: What school districts is your home close to? What makes your home stand out? Proximity to local amenities Type of neighborhood Once on the MLS database, your house will be available for viewing on major real estate sites to increase visibility. Market Your Property After listing your home, full-service brokers put for sale signs and a box of fliers or a link to virtual flyers in your yard. They also market your home online and list it in local home publications. This step is important in marketing your home and the amount of advertising your broker does speaks a lot about their skill.  If your broker relaxes and hopes your home will sell itself after listing it, look for a new realtor. You want a realtor who knows where to get potential buyers and how to market to them to put your home in front of qualified buyers.  Hold and Schedule Open Houses Flat fee real estate brokers also schedule showings for potential buyers to walk through and view your house. It’s crucial your realtor becomes an expert on your property because they will be showing off your house. Since prospective buyers usually have a lot of questions, they should be able to tell them when remodeling was completed or where the rain hits the roof. An essential part of your agent’s marketing includes answering these questions and researching your home. Offer Expert Advice The full service agent you hire should be able to give you information that impacts the value of your property. They should help you identify rooms that need changes to get your house to the asking price. If a buyer requests some remodeling done, consult with your agent to know if that demand is reasonable.  Apart from inquiries about changes to your home, full service agents can help you interpret contracts. They also go through each contract and make changes to offers that look like contracts on your behalf. Having expert advice is critical as it makes the home selling process successful.  Negotiate the Sale A good full service agent should get you the right price for your property and have experience negotiating sales. The agent should let you know if the transaction you are about to reject is a good one.  Since your agent works for you, you should communicate if you feel they’re not representing you well at the negotiations. Your full service agent should be in agreement with you during negotiations. Related Questions Why Should I Use Full Service Flat Fee Brokers? There are many reasons why you should use full service flat brokers. They’ll ensure your home is listed on specific MLS relevant to homebuyers in your area. You’ll also have realtor access to help you sell your home faster. A study revealed 90% of buyers bought their house through an agent that subscribes to your local MLS. What … Read more

published on April 30, 2021

Flat Fee vs Commission Real Estate

Illustration of seller paying flat fee and commission costs for real estate

Flat Fee vs Commission Real Estate

Traditionally, selling homes has been paid via a percentage-based commission to brokers involved. However, flat fee brokers charge sellers a flat rate to list their homes. Let’s discuss everything you need to know about these two models in this flat fee vs commission real estate comparison. Flat Fee Vs Commission Real Estate General Overview Many real estate brokerages are offering alternative commission models to meet consumer demand and challenge the traditional model. With traditional commission real estate, the seller pays the broker 3% of the sale price to sell their property while flat fee brokers help you sell your property for a predetermined flat fee instead of this percentage-based commission.  What Is Flat Fee Real Estate? Flat fee real estate is a model where you pay a flat fee regardless of the amount your home sells for. Some real estate realtors decide their rates after a consultation. Others have their own rates already predetermined as they prefer working off of flat fee charges.  So, if your property sells for $600,000 and you agree on a $5,000 flat fee, you will pay your realtor $5,000. However, this doesn’t mean you have saved $31,000. (The traditional real estate commission 6% x $600,000 = $36,000 – $5,000 = $31,000). You still have to pay the buyer’s agent 2-3% which equals $18,000 on a $600,000 property. When you combine this with your flat fee, you will end up paying a total of $23,000. So your savings will be $36,000-$23,000 = $13,000, which is a lot on such a big deal.  What Is Commission Real Estate? Commission real estate is a model where you pay a fixed commission percentage at closing. This means if you sell your house at $600,000, you would pay a real estate broker $36,000 at 6% commission.  However, the agent won’t walk away with the entire money as they will have to share the commission with the buyer’s agent. The rate is high because agents do a lot of work without getting paid to earn their commission. They also don’t earn any money until the property is fully closed. Bear in mind that while the commission-based fees are about 5%-6% of the selling price, there are no regulations that require set commission charges. You can talk to your real estate agent and ask them to lower the commission rate. However, they aren’t under obligation to do so. Flat Fee and Commission Real Estate Notable Features Both flat fee and commission-based real estate brokers have certain features that distinguish them from each other. Similarities and Differences Below is a table to help you understand better the similarities and differences between these two models so that you pick the right model depending on your needs. Real Estate Service Flat-Fee, Full Service Realtor Commission-Based Realtor Organizes and hosts showings sellers Yes Yes Lists homes for sale on MLS listings Yes Yes Helps with marketing, legal paperwork, and photography Yes Yes Negotiates with potential buyers Yes  Yes Explains to sellers the benefits of an offer Yes  Yes Saves sellers money with a low flat fee Yes No Major Distinguishing Factor The major distinguishing factor between flat fee and commission real estate agents is their rates. You’ll save more if you hire a flat fee realtor than a commission-based realtor. Here’s how much you can save, assuming a 3% listing fee for a broker and a $5,000 flat rate for the listing. Sale Price Commission-Based Listing Cost Flat-Fee Listing Cost Potential Savings $400,000 $12,000 $5,000 $7,000 $750,000 $22,500 $5,000 $17,500 $1,000,000 $30,000 $5,000 $25,000 When To Hire a Flat Fee Real Estate Realtor Flat fee realtors are ideal for home sellers with the confidence and experience to go for the sale by owner route. If you are an FSBO (For Sale by Owner) seller with no buyer lined up, flat fee realtors are also a great choice as it you are going to end up spending time and money on marketing anyway.  Selling your house without the help of a realtor can be time-consuming and difficult. Although you will save 3% in commission, it can be draining depending on the time you have to invest learning and dealing with many different contracts and legal processes. Some realtors only provide MLS (Multiple Listing Service) listings leaving you to handle everything from negotiating the sale to marketing and pricing your home yourself.  However, at CA Flat Fee, you get full service with: Complete closing coordination with escrow and title Professional marketing and photography Negotiations and offers We also coordinate all showings – all for a low $5,000 flat fee [lyte id=’I-r2xiSARjQ’ /] When To Hire a Commission Real Estate Realtor Although you might think not parting with hefty real estate commissions will put more money into your pocket, you will find it stressful to open your home to buyers when you don’t even know if they are qualified. Additionally, FSBOs fetch less than agent-listed homes. This is because homeowners selling by themselves don’t understand market reports or the market value. A 2015 research also revealed that understanding paperwork was the most difficult task for FSBOs. Although you can download ready-made contracts, you may not understand what it means or get stuck in a bad transaction. Additionally, research shows that FSBO homes have less marketing reach resulting in fewer potential buyers and less competition all leading to lower offers. Which Model Is Better? Both flat fee and commission-based real estate models are great. However, you will pay a commission agent for comprehensive services, at a premium. With flat fee agents, especially full service ones, you will get all the same comprehensive services for a fraction of the fee. If you intend to sell your own property and complete most of the work during the selling process, this can be a good money-saving opportunity that you may not get with commission-based agents. This makes flat fee agents a better choice because they offer so much value for a low flat fee. Final Verdict Flat fee full service agents are … Read more

published on April 30, 2021