Loved your “without any stigma attached to their choice”. I recently sold a house that was, before me, one of the “innovative” business model’s listings. I can’t help but wonder if t was blacklisted…but I guess it could have been my “staging genious”

Why don’t “they” get that stigmatizing listings of certain companies IS anti-trust activity? It’s shameful…truely.

Thanks for taking a peek at my site!

jcricket,

I agree with your last comment. I believe one of the defining characteristics (if not THE defining characteristic) of our post-industrial society is choice. We live in an age of choice. Consumers encounter choice in every facet of their lives, and real estate agents should be free to offer choice without fear of being ‘blacklisted’ by ‘traditional’ agents.

Personally, I think that if an agent provides service to such a degree that consumers are willing to pay 6% (or more), then more power to that agent. He/she is doing a wonderful job and should keep up the good work!

There will always be people who are willing to pay for the ‘full package’ for whatever reason, while there will be others who are just looking for specific services. I think the industry gets a bad name, in part, from that second group of people who only want to pay for ’some’, but feel forced into paying for ‘all’. Give them the option (without any stigma attached to their choice), and they can no longer complain about Joe Realtor who’s charging 6% (and making good money doing it).

I just think the market should sort these matters out. I also think that if you’re a good agent, you shouldn’t have to fear change too much…

Actually, from my perspective, there just is no set fee. Why is that so hard? We are all taught from day one that “All Commissions Are Negotiable”. Sometimes my fee is in fact 3% for my side of the fence. Sometimes that’s too much money and I cap it, the same way agents expect a cap on what THEY pay their Broker.

I just don’t get why agents can’t seem to understand “fair” when it comes to the consumer, BUT they clearly “get it” when the Broker has his hand out to them. No agent would pay their Broker what they expect consumers to pay. Every Broker has flexibility in what they charge agents…so how come flexible isn’t an option when it comes to the consumer? Seriously, if an experienced agent had to pay their Broker $40,000 on one single sale…they’d freak out! But the same guy will turn around and expect a consumer to do, what he would not himself do.

Makes no sense whatsoever to me. I do use 3% as a rule of thumb and then work up and down from there. You need to start some place. To me there is no 6%, as that would mean I have both sides. The last time that happened, in escrow now, I just gave the buyer his 3% and I kept 2% for the seller side. Great transaction. Everyone’s happy.

This isn’t rocket science. You are either fair, or you aren’t. You are either greedy, or you aren’t. You either work hard for your money, or you don’t. How can anyone take a whole industry in the entire Country, and pretend one fee fits all and every situation? That can’t possibly make sense to anyone.

Take another profession – law. Some lawyers charge $50/hour, some can demand $600. That’s not what bothers people about lawyers, because most customers understand the qualitative difference. And, outside of class action lawyers, it’s almost always a per/hour fee, so it’s directly tied to how much work is getting done.

My supposition is that people know that the “transaction costs” for literally everything else in our lives has fallen. However, real estate transaction costs have risen. In fact, they’ve risen a lot, because the transaction costs are a % of the house price. Despite advances in technology & increased competition, housing is more expensive to buy and sell than ever (and I’m not just referring to the purchase price). Put in economic terms – when capitalism is wringing the excess out of every other industry, why should RE be any different?

When you consider, for example, the sellers’ market of the last few years, there is simply no way you convince consumers that it is twice as hard to sell a house in 2006 as it was back in 2000. More specifically, that agents are doing twice as much work. As some others have pointed out, none of the rest of us have gotten 100% raises over the same period of time, and some of us have been doing twice as much work.

While I’m open to the idea that higher priced homes are possibly harder to sell (or require different skills), I doubt it’s 10x as hard to sell a $1m home compared to a $100k home. However, I’m fine with you charging whatever your clients will bear. I’m even fine with Windermere setting a 3% commission rate for all its agents, as long as they’ll work with Redfin or A-B-C agency or the John L. Scott agent who only charges his clients 2%. It’s the collusion and price-fixing mentality (so clearly demonstrated in Marlow’s comment) that gets people riled up.

If you wanted my opinion on how to fix this – brokers/agents should just setup flat fees for various packages of service. If I want someone to show me 100 homes and handle everything for me, I’ll pay $10,000 (or whatever). If I want to do it all myself and you only have to show me 1 home and write one offer, I should be able to pay only $2,000 (much less of your time), and everywhere in between. Convince me the $10k package with you is worth more than doing it on my own and I’ll pay it. Otherwise, why should I pay such high fees?

(PS. This comes from someone who loves his traditional, full-service, RE agent, and would use him again at 3% commission.)

I don’t key in on 6%. I key in on whatever I feel my time is worth and what the local market will accept. Now THAT’S a quality move away from anti-trust issues, eh?

To the bigger issue, the heart of the MLS regardless of who owns it is the offer of co-operation on compensation. As I had it explained to me today, the Sun Cities (retirement communities in unincorporated areas of the county) used to have their own MLS. It was board owned but board membership was fairly thin – it was the Sun City brokers who essentially held control.

I agree with one of the earlier comments that it’s the smaller shops that will be damaged.

I’ll take it a step further and say free trade will be curtailed, to the detriment not only of the small shops but the consumer. Let’s say C21, Re/Max, Realty Executives and maybe John Hall and West USA got together to form their own MLS, and the purpose of this MLS was to share listings and offer co-operation on compensation.

Where do the smaller offices fit in? Where does the consumer who wants access to more than these companies’ listings go? Are they really going to keep calling brokerage after brokerage looking for a home, or will they settle for the selection they say, especially if that selection comprises a substantial portion of the market?

Now if everyone in Maricopa County came together and dediced to take the system out of the board’s hands, so be it. I couldn’t care less where I get my access; I just need my access. And in the grand scheme, it would mean more to be a REALTOR if I didn’t have to be one to access the MLS.

Forced national MLS participation is a joke – not from the brokers’ perspective but from the homeowners. A listing agreement is a contract between seller and listing broker. We follow whatever their instructions are, logical or not. You can’t mandate a seller participate in an open MLS if they choose not to do so. They have every right to do or not do whatever they choose, within Fair Housing guidelines.

Okay, I’ve rambled enough.

Why does everyone key in on “6%”? Doesn’t it make a difference if the sale price is $150,000 or $950,000? It does to me, but I can’t seem to get anyone to come with me except Greg Swann

Major League Baseball (MLB) has run into similar trouble with anti-trust laws for quite some time, and Congress keeps threatening to revoke their exemption. But for now MLB has managed to play nice periodically (free agency, steroid policies, etc.).

If the NAR would do the same, perhaps the DOJ would drop the suit. But so far all the NAR has shopwn is bunker-mentality.

I predict the NAR will lose this suit. Even if they don’t, they’ll still lose in the long run, because of their anti-consumer mentality. Consumers clearly aren’t sold on the idea that RE agents salaries should rise and fall directly with the price of the house their selling/help find. As more of the work of finding homes is shifted to technology, and more of the back-end work is streamlined, there’s simply no legitimate argument for saying the transaction costs should go up/stay the same.

I’m not one that believes buying a house is like buying a book, plane ticket or car, but the days of 6% commission being the only RE model are clearly numbered. The NAR can either get on board and help full-service Realtors innovate their way into continued business growth, or fight a losing battle and go down as “the bad guys” while consumers find other professionals to help them buy and sell homes.

You do realize that NAR has been permitted to be a “self governing body” for almost a hundred years, because they agreed somewhere down the line to play fair…or do you?

Can you name one other group, that affects consumers so greatly, that has been allowed to be a self governing body? Time for that to stop…you prove that by your comments…and the DOJ must stop it.

The original concept was that Realtor’s objectives and seller’s objectives were one in the same. But now that buyer’s have rights too, the government needs to step in and change a few things.

You say “Not Fair Play”

What do you expect NAR to do say don’t use a Realtor?

Give me a break.