As of 5/16/07, 10 states prohibit rebates, by
law. These states include  Alabama, Alaska, Kansas, Louisiana, Mississippi, Missouri, New Jersey, North Dakota, Oklahoma, and Oregon.
Still, eight states passed laws requiring brokers to perform a minimum level of services: Alabama, Idaho, Illinois, Indiana, Iowa, Missouri, Texas and Utah.



"These practices can lead to substantial consumer harm through reduced
choice of real estate brokerage services, higher fees, and limitations on the
ability to access information about real estate listings," the FTC/DOJ report
said.

The FTC and the Department of Justice want
states to repeal the regulations that limit competition in the real estate
industry.

In fact, the Justice Department has
already leveled shots at some states by lawsuits charging that banning rebates
limits the competition. These states include Kentucky, South Dakota, West
Virginia and Tennessee. These states went along with the DOJ and lifted the
bans.

In a report issued by the FTC and the DOJ,
said that discount brokers would be blocked in their effort to use the Internet
for their services. The assumption is that they would reduce fees overall.
Interestingly, the report said that yard signs are less effective than an
Internet presence for selling homes. The report says that 80 percent of home
buyers looked to the Internet first before looking at yard signs and contacting
real estate agents.

Internet
based competition for the traditional real estate industry

Redfin and Zillow are the major players in this dynamic and quickly growing area of Internet real estate sales. The near future will, no doubt, bring out a host of other entrepreneurs to capitalize on this dramatic change.

Redfin

This site allows buyers to research cities and their neighborhoods. It supplies a lot of information about houses including how long they have been on the market. The buyer can make an offer through the Internet. Redfin agents help people hone their offers and they will negotiate on their behalf. Instead of the usual 6% fee, sellers employing Redfin pay a flat $2,000 fee.

Zillow

Zillow has much going for it for people who want to bypass the traditional real estate sales methods. 1. You get a map of the area you are searching. You just enter your zip code and address to get the current value, local sales prices and real estate taxes for the house. 2. The current estimated home value is provided. You can use this tool in many ways. Perhaps you want to keep track of the effect of inflation on the value of your house. You can check on the real estate taxes for houses in your area to see if your tax is equitable. 3. Zestimate rankings will tell you the range of house values in a specific zip code. 4. Zestimator will help you determine if making a major upgrade will help you get more money for your house. 4. Trend graphs shows the appreciation of homes in a zip code.

Zillow Owner Richard Barton in press release said, "We believe you shouldn't need a computer science degree or a real estate license to find out
what a home is worth. That's why we created estimate values, providing free and instant valuations for millions of homes in America. This beta is just the
beginning... Zillow will continue adding tools and services to empower consumers to make smarter real estate decisions."

In a "flat fee" listing, the ller of the house will sign a Listing Agreement with a real estate broker or agent. However, instead of agreeing to pay a percentage of the total sales price of the house (typically 5-7%) the seller agrees to pay a flat fee (typically between $250 and $750). The seller also agrees to pay a commission to the agent who brings the buyer (typically 2.5% to 3% of the total sales price of the house).

To clarify....

Let's assume the flat fee to the listing broker is $500 and that the commission to the selling broker is 2.5%.

If your home sells for $300,000 you will ultimately pay $500 PLUS $7,500 to the selling broker for a total of $8,000. This is about half of the amount you would pay on a 6% traditional basis.

Remember that you will pay the listing broker his flat fee upfront at the beginning of the sales cycle. The listing broker earns his fee immediately and there is no refund after you sign the agreement. The $8,000 commission to the selling broker is earned only after the house is sold and the closing is completed.

The flat fee broker will put your house for sale in the local MLS (Multiple Listing Service). Since a large majority of homes are sold through the MLS by itself, in most cases that is all you need to sell your house. The statistics kept by professional real estate organizations bear out the truth that using the MLS is the primary way people sell their houses.

For Sale signs, newspaper advertising, internet advertising and a host of other traditional real estate services pale in significance to the power of an MLS listing.

Author Bio:

Greg Cryns is the owner of Flat Fee Real Estate Guide
http://www.flatfeerealestateguide.com 
If you are looking for a flat fee or rebate real estate agent start here.

Flat fee brokers are springing up around the US very swiftly. Their prices vary from $ZERO if you buy your next home from them up to a few thousand dollars

Here is an example of what a flat fee broker may offer:

The MLS Listing: this is an essential tool for selling your house

Showcased Listings:  your house may be shown at Realtor.com and the
local newspapers  

Unlimited Changes to Your Listing. You can make as many
changes to your listing as needed.

Unlimited open house notifications.

Broker Support. You will work directly with a Illinois
licensed real estate agent. 

Photos of your property - usually
some exterior photos

Lockbox.  A lockbox will allow licensed real estate
agents access to your property while you're out.

"For Sale" Yard Sign.  A yard sign with stand at a cost around $30