Flat rate

Encyclopedia : F : FL : FLA : Flat rate

A flat rate (sometimes "linear rate") refers to a pricing structure that charges a single fixed fee for a service, regardless of usage. Rarely, it may refer to a rate that does not vary with usage or time of use.

Contents

1 Examples

1.1 Internet
1.2 Telephone
1.3 Electricity
1.4 Transport
1.5 Real Estate

2 See also

Examples

Internet

For Internet service providers, flat rate is access to the Internet all hour and days of the year (linear rate) and for all the customers of the telco operator (universal) at a fixed and cheap tariff.

Flat rate is common in all the broadband access to the Internet.

A charge tariff is a class of linear rate, different from the flate rate, where the user is charged by the uploads and downloads (data transfers). The GPRS access to the Internet in some countries of Europe has no flat rates pricing, following the obsolete "metered mentality". Because of this, the users prefer using the fixed lines (with narrow or broadband access) to connect to the Internet.

A wavy rate is not a linear rate, because the Internet surfer pays the monthly fixed price to use the connection only during a certain range of hours of the day (i.e. only in the morning or, more typically, only at night).

Telephone

Telecommunications companies commonly offer a flat rate to residential customers for local telephone calls. However, a regular rate is advantageous for those who only make a few short calls per month. Cellular telephone service is usually not available at a flat rate.

Electricity

A flat rate for electricity is different from that for other services. An electric utility that charges a flat rate for electricity does not charge different rates based upon the demand that the customer places on the system. A customer pays the same amount whether they use the electricity in bursts during mid-day, when demand and the utility's costs are highest, or if they spread it out over the entire day. However, if the customer uses a different amount of electricity, they are charged a higher or lower amount. Residential customers and small businesses are usually charged a flat rate, though not the same rate per kilowatt-hour. A special type of electricity meter, a time of use meter, is required to charge a non-flat rate. Time of use meters can lower a customer's electricity bill, if they use electricity mostly during off-peak hours. Some utilities will allow a customer to change to a time of use meter, but they charge for the cost of the meter and installation.

Transport

In most parts of the world regular users of public transport, especially commuters, make use of weekly, monthly or yearly season tickets that allow unlimited travel for a fixed fee. In some countries year passes are available for the entire national railway network. Road users are normally charged a combination of fixed and variable fees, in the form of vehicle duty and fuel duty.

Real Estate

A way that homeowners can list their property on a local MLS (Multiple Listing Service) and www.Realtor.com for one fee. This is a radical departure from the listing commission that is usually associated with a homeowner selling their property. The homeowner may or may not choose to pay a Buyer's Agent (a real estate agent) whom brings the homeowner a contract. Most Flat Fee Brokers feel that it helps to sell the property faster if the homeowner agrees to compensate the Buyer's Agent. Federal and State Law state all Real Estate commissions are negotiable. The name Zbark is a synonym for Flat Fee with regards to Real Estate. It is defined as: An entirely new Real Estate Brokerage business model that replaces the outdated listing fees of the 20th Century. The model helps consumers that are buying and/or selling real estate. It puts the consumer in control of the buying/selling process rather than a real estate agent and/or broker. It is a fee based system rather that a commission system.

Flat rate Listing Services allow those selling their homes to list their property on the MLS, and thus make it accessible to to real estate agents and the buyers they represent. This service is typically much cheaper than using traditional brokers. The listing fee can range anywhere from $200-$500, depending on the area, while traditional bokers charge 4-6% of the selling price of the property.

In most cases when using a flat rate service the seller will be offering a "Buyer's Agent Commission" Typically 2.5-3% of the selling price. However, the Listing Agent Commission is eliminated by the flat fee. The savings is substantial.

Many flat rate services also offer contractual terms that permits the seller to advertise as a For Sale By Owner (FSBO) seller. Therefore, if the sellers finds their own buyer even the buyer's agent commission is eliminated.

Other advantages include the option to cancel the listing at anytime and take your listing elsewhere. Most flat fee companies will not lock you into the contract for a minimum amount of time.

The flat rate concept was around for many years before the internet became popular. However, The online concept of flat rate real estate listings appears to have originated in 1999 with a West Coast based company. Many other companies have since joined with online offerings and can be easily found in most areas of the United States.

There are also flat rate broker groups that cooperate with each other across the United States. Many FSBO websites will also locate local flat rate brokers for interested sellers. Those offerings normally include a FSBO webpage to assist in advertising the property.

The downside of using a flat rate listing service is that in most cases you will be representing yourself in the transaction, setting your own price and commission to the buyer's agent. Some services offer "limited representation" which includes basic information to help you with selling the property.