I own a small construction/roofing co. Good contractors (me) work hard for their money and deserve every cent. Is price fixing ok in my line of work too?
Hey if you were selling a home I could probably convince you that you would want to tap into the the ready willing and able buyers pool that traditional real estate agents garner by doing massive advertising. 75% -80 of fsbos go with an agent eventully. Why, because you can fish for buyers with price or you can have ready willing and able buyers preview your home with the help of an agent. How do agents get buyers. Advertising and lots of it. Not paying 3% or 2.5 ot the buyers's agent may cost you in terms of net. Depending on your home area and condition. Did you know staging your home can have a large impact on your net as well? would it be worth it to you to work with a realtor who can help you do that. How bout previewing your home to the top realtors in your area and getting their feedback. How about pricing and negotiating. How about reviewing and coordinating the paperwork and disclosure laws. Sure you can do it yourself. And it some cases it makes sense. How is that for a little sales pitch. Really though I became a realtor after I had tried to sell my home as a fsbo San Diego. I could not get anyone to make an offer. The first day we listed the home we got 6 offers. And one of them came from a guy who had looked at our home without a realtor. He could have had the home for 6% less and he wound up not getting the home at all because people paid more than the offer.
How is taking a listing, and putting it into MLS for some other agent to sell hard work? The most work they put into it is going to the closing to pick up their check. Now, the selling agent does in fact do most of the heavy lifting in the transaction and is more justly compensated. But still overpaid in today's market as far as I am concerned.
wareco, in a sellers market you have a point. But to me the whole point of transaction is that it is negotiated between the home owner and a seller. If a listing agent can not explain why he should get paid. Then he should not get the listing.
The bid/ask on Real Estate is highly inefficient because of: Legal repetitive nonsense Commissions The Appraisal process is biased/flawed The loan approval process is biased...inefficient... Local government issues.. National tax issues... Commissions are only part of the nonsense... Legal largesse local..state.. and national create just as much if not more inefficiency... You drop the real estate commission...legal largesse out of the real estate equation.... you have eliminated more than 40% of the cost of improved real estate... Efficiency has a long long way to go in real estate....
Real Estate sales is very cyclical. They have to get it while they can. If the business cycle is 11 years then Real Estate people make big $ about 20% of the time.
Everyone has to get paid. The last time I looked my CPA, plumber, mechanic, doctor, shoe salesman........... all get paid. Just like everyone on this board realtors are not in business to be volunteers... If you want to circumvent the commission sell "By Owner" and use a real estate attorney to help with the contract. If you want to pay less go with a flat fee mls services. But don't insult an entire industry because they are doing well these days.
It's not insulting to the industry to enforce antitrust laws. If the commissions are too high or too low is irrelevent. If there is price fixing then that is against federal law and should be stopped. Some areas of the country are competitive and in other areas 95%+ of the homes listed are at 6% listing commisions. Not many other industries where the price on service is so consistant (fixed).
Heard on Kudlow's show today that USA rates are highest in the world with typical in other countries around 2% or less. DS
I hate giving a plug to RE company Never used them, heard it on the local radio show. www.righthome.com 1.5% total commission to a seller.