This has happened in all industries and Real Estate will be no different over the next 5 years or so.

I many other locations, the demand for existing houses is relatively low and even when competetively priced, sellers may have a hard time getting offers at their asking price.

Driving, well lets see, I put on about 30,000 miles driving clients, looking at properties and going to sellers places of business etc About $15000 actual cost. My phone runs about 300 per month and then there is the web. Ok, so I don’t have a website but my expenses at home for a fast and wide are about 50/mo.

About 50% of the clinets do not buy through an agent that has worked for them even if they put in 30 to 50 hours. Sometimes just call on a sign and wind up buying through the listin agent (at over value without representation etc.

My buyers are given full comparatives, the market is discussed (even by neighborhood) and suggenstion s are made as to how much they should pay (maximum) and what a reasonabl eoffer (that won’t slam the door) should start at (minimum). I include banking information in our discussions AND give REAL numbers for what the taxes and insurance will be after they purchase. Many times I tell them to walk away unless they really want this particular house.

For the Seller, I give the highest number that I feel a bank will allow to loan against. Remember the Bank controls and makes all the money here. I then tell teh Seller the average price they can expect to get based upon market conditions, the condition of teh property and HOW FAST they want /need to sell.

My numbers are VERY accurate and in cases in the past where a client insisted to buy at full offer, the bank has said NO and given the exact value I gave as highest for this property.

I won’t even go into the list of things that I do for clients as their agent. Just remember there are real estate laws, however “caviat emptor” for an unrepresented client is the way of the world.

Now lets talk of the number of sales that I have done that never closed for a zillion reasons. I don’t get paid for thosa AT ALL. How about the sales that close and I have to sue to get my commission or just forget about it? I have had over 3M worth of these probelms in the past 18 mos. Ok to many 6% looks like a LOT of money. Yes it is expensive but well worth it to a seller or even a buyer.

WHen I sold my property in California, I was an agent and had to pay no listing commission. I offered 4% to the Selling agent by mls listing. The next mornign I had a line of realtor’s cars around the block waiting to look at the 685K house. Within 48 hours I had above price offers and a contract signed and accepted.

That’s right, 4% to one side got me more money than anyone had ever seen for a house like that one, about 100K more.

The lesson, list your house, pay 2% to the listing agent, offer 4% to teh selling agent! it works. They want the commission and will bring good offers!

Dirk

-Randy
http://www.4mysales.com

I knew you were a broker before you even admitted it on your post.

Real Estate brokers are mostly slimeballs, but I don’t fault them for that. They are trying to earn money and protect their business - just like most other people.

The onus is on the customer to understand the transaction. Most people don’t even realize they can ask for lower fee. Sure the agent will snap back that his fee is “standard” and it may affect you sale, but any person with a clue will know that it is BS. Walk out on the guy. Everything is negotiable and it always has been. You can put your house on Craigslist or Ebay for free. Or put a For Sale By Owner in your yard.

In a hot market you don’t need a broker and in a poor one they can’t help you.

Again the agents are self-interest slimeballs, but don’t blame them for your own economic illiteracy.

Like paying for a funeral, up until now, people hadn’t bought and sold homes too many times in their lives and collectively aren’t savvy about how to go about it - and this is generally when consumers get ripped off.

One slimeball example.

Looking at homes near Lake Norman in Charlotte, I had an agent tell me:

“the homes off the lake will appreciate at 9% per year and the ones on it will appreciate at 12% per year….”

If a stock broker PROMISED returns like that they would lose their license. I am knowledgeable enough to have laughed in the agent’s face. I even mocked and scolded her as was warranted, but many others would probably be influenced by that bald-faced lie.

Having worked in real estate extensively (and having family in the biz too) I could fill up this blog with countless more slimeball examples.

Maybe I should list all the really bad agents (and their transgressions) from Brooklyn Heights on my blog….

I wrote a longer post about this here . Bill Burnham’s post, and the factors he indicates that are play, will effect services that are the darlings of today - if they don’t meet the challenge. They’ve certainly framed ideas I’ve thought for a while and focussed them.

If you do a search for marketing manager positions, especially in hot markets, you’ll find a lot of realtors. That has to mean that competition is ultra-intense, no matter what the NAR (who has given a truckload of money to politicans of both parties) or the Justice Dept. says. They must think that, with some slick marketing, they can get those 150 more basis points than the other guy. Riiight…

Where there is honey, there will be flies.

Seriously, Go to Realtor.com and see all the information that is availalbe…your head will spin.

Nope the renters aren’t lobbying…it’s the banks…currently they are not permitted to engage in the real estate business. They want in and they are lobbying. So you’re correct…just the wrong lobby.

I’m sure you can find a broker to help you for 3-4%…even less if you want. Don’t know if you’d be happy with the service though.

“It’s absolutely false to say that there isn’t fierece competition among Realtors. It simply isn’t true. “

The Justice Department’s take:

Indeed, the U.S. Department of Justice sued the National Association of Realtors last year over its policy of limiting Internet sites’ access to MLS information. The government said the restriction is anti-competitive and undercuts online and discount brokers’ ability to gain a foothold in the market…

A September report by the U.S. Government Accountability Office was also critical of MLSs, noting their use may artificially prop up broker commission rates.

Why the lawsuit then? Renters lobbying? Comissions are around 3-4% in Europe. What other than the MLS keeps them so much higher?

It’s absolutely false to say that there isn’t fierece competition among Realtors. It simply isn’t true.

The big problem and truth - 6% is too much if you hire a bozo…so is 5%, 4%, 2% or $100 dollars. This same principal applies with every product or service we buy. No big revelation. It’s a value proposition…if performance doesn’t match our expectation…we get pissed.

Talk about monopolies and the sad state of competition…how about big oil, health care and leagl drugs…things people consume every day…not every 7 years or so.

My two cents…of course…I’m a Realtor who believes that our Realtors earn their fee. I believe it because our repeat and referral business is growing not shrinking. Choose wisely and win….choose otherwise and it’s a rip-off. The principal applies with every service and product.

Sorry you had a bad experience.

In a normal system, each would compete by lowering their rates: 5 percent, 4.5, on down. But since they won’t cannibalize themselves, instead they’re just slowly starving: each Realtor is selling half as many houses. Interesting.

Flickr, del.icio.us, digg, MySpace and similar.

* Content Availability: Generally speaking, the more “self published”, publicly index-able data there is, the more vulnerable the walled garden.

On a blog it’s: Easy to post photos. Easy to post links. Easy to post text. Getting easier to post files of all sorts. Structured blogging and microformats in addition to RSS syndication make it easy to share.

* Index Affinity: The more willing a data owner is to make their data available for indexing, the more tenuous the walled garden’s business.

That’s what bloggers do every day with links, photos, stories, etc.

* Process Simplicity: Walled gardens can create value by not only aggregating and displaying data, but also by providing a process for acting on that data.

Flickr, del.icio.us, digg and similar provide social glue. That’s it.

I’m rapidly getting tired of having twenty accounts to do what I can do from my blog.