Posted on 04/24/2005 3:47:55 AM PDT by TXBSAFH
Feds probe real estate agents Money magazine investigation shows Justice Dept. looking into anticompetitive practices. April 22, 2005: 5:27 PM EDT By Jon Birger, Money Magazine NEW YORK (CNN/Money) - Did you pay your real estate broker too much? The U.S. Department of Justice may be set to turn Tulsa, Okla. into a test-case for ending the stranglehold 6 percent commissions have over the real estate brokerage business. MONEY has learned that Justice's Antitrust Division is gathering information on the bully tactics that full-commission brokers in Tulsa allegedly use against their discount rivals to discourage commission-cutting. The probe follows other recent efforts to spur competition in the real estate industry. According to a copy of a Justice Department subpoena obtained by MONEY, federal investigators are seeking information on "possible anticompetitive conduct in the provision of real estate services in the Tulsa area" as well as "documents related to refusal to cooperate on real estate transactions." Realtor Commission Find the right REALTOR?? for you. Get competing proposals from top local real... www.sell-my-home.net Selling a Home? Find Real Estate Agents Planning to sell a home in the next few months? Get competing proposals from... www.sellingagents.net An Antitrust Division spokeswoman confirmed the existence of the investigation but declined to provide additional details.
(Excerpt) Read more at money.cnn.com ...
The DOJ-Antitrust Division should pursue these clowns and clean up the local real estate market so that home buyers and sellers get the benefit of a competitive market.
I believe that people should be paid fair wages for their work, but $30,000 to sell a house is robbery.
I could not agree more.
Geeez. It's 6 1/2 % or 7% around here. Outrageous.
I think a standard fee for service of say about 3k is fair on most residental properties.
"but $30,000 to sell a house is robbery."
Hey come on now, If I only want to work for a week and get paid like i'm working 20 days, what business is that of yours?
Problem is, people expect realtors to advertise and show the house, and 3k really doesn't buy all that much advertising.
Then why can discount brokers do it, and do it effectively. They can,I have seen it done.
Remember folks, the fee for selling real estate is not set. It is negotiated by the seller ( or buyer agency agreement). When the agent gives you a look of dismay for not agreeing to your fee proposal , just ask him/her what is 6% of nothing. Discount fees are negotiated by aware consumers. Few agents will pack up his presentation and walk out the door if you try to negotiate a fee. A smart agent will know you know the law.
6% is the standard that I've seen. I have never sold a house for more than 4%.
As you said, "what is 6% of nothing?"
My aunt had only been here for less than two years from Simi Valley, California where she held a R.E. license.
You've got that right... Realtors do NOT get paid unless they sell something. Meaning, they could list a home for over a year, paying out money in the meantime, for advertisting, promotion, their gas, etc. only to have the owners decide to stop listing or go with someone else. Usually this happens because the owner insist on their home being priced much HIGHER than it is worth.
So, the agent is then out quite a bit of money, but they cannot not (yes double-neg) advertise, promote, etc.
There is NO base salary in real estate, no guaranteed minimum wage, the only time an agent is paid is when something sells. Then have to pay for their office space too. Many months you can have NOTHING coming in, but the money still goes out.
Most people do not understand this. FYI, hubby is an agent and believe me, it isn't an easy business. If you think that realtors make easy bucks, you go try it. Try it for a year and then come back and tell us how easy it is (not yelling at you publiusF27), but others.
A $30K commission ??? Yeah right, maybe the commission is $30K (on a million dollar home), but million dollar homes are on the market for a long time, and then there are all the costs associated with it, plus the agency takes a large cut too. There are very few agents who will take home $30K on a sale (probably more like $10K MAYBE after everything is deducted (then Uncle Sam takes his cut of that $10K (remember double fica deduction too).
Then, there is timing, there is no time day or night, that a good agent is free from working. Then can get calls @ 6am and at 12 midnight.
Like I said, people can complain, but trying doing it once. We've heard this from many people, "oh the job you do is so easy and must be nice to make so much money on such a sluff job." But sometimes, they become a realtor and it is amazing how fast they change their tune, when the money keeps going out and little comes in, in comparison.
Sorry if it seems I'm on a rant, but believe me, it really gets old hearing this over and over from people who don't know what it takes. It's NOT a hard job as far as paperwork, etc. but it's not a easy one either, because you better be able to put up with being treated like S### by people that think that you make too much money.
Geez, I can't believe on FreeRepublic, I'd hear the class-envy stuff.
I sell boats on commission, and $3k coming into the house means I've had a pretty good day, but I probably did quite a bit of promotion to get it, so I'm certainly not going to argue that you cannot promote something effectively for $3k. You can, and even for less. I do it all the time. I'm just saying you can do more for $30k, and you tend to get what you pay for in this world.
Yeah - and whatever you make doing what you do is robbery and your income should be limited by an arbitrary amount.
Sheesh - just wait a few minutes and the totalitarian socialists creep out of the closet. Even here at FR you find those with a limited understanding of free markets.
Yes if the major RE companies illegally undermine the fee for service RE companies or discount brokerages they should get indicted for racketeering. Otherwise to hammer at RE agents for entering into a listing agreement with a 3% for selling agent and 3% for buyers agent - thats a decision the seller agrees upon.
Many listing here in the treasure coast are 2.5 / 2.5 because its a sellers market. When its a buyers market its tougher to find a buyer and THATS work on the part of the selling agent.
No one is pointing a gun at the seller's head forcing them into a listing agreement. Sure some do not fully understand the market and yes some agents exploit this but it no different than buying a car or dishwasher.
When the man with money meets the man with experience the man with money gets experience and the man with experience gets money.
Good post. I live in a retirement area in Central Texas. There are many 2 to 5 million dollar estates around here. Realtors are my client base. One sale of this kind of property in a year is good for some realtors. They spend anywhere from 3 to 10 thousand dollars per month promoting the sale of these properties. However most of the sales are for 125,000 to 250,000 homes but they are getting harder to find. 6% is the standard i've seen in this area.
Right now in Phoenix, houses are selling faster than they can advertise them...If I were to put our house up for sale right now, I would seriously do a "for sale by owner" and get my own advertising out...6% of 350,000 is alot of money to just hand out!
About time. When are they going after the funeral industry?
I agree, FSBO's are the way to go for your own home. Not everyone knows how to sell their own home though. I wouldn't give up the 6% either :o) Phoenix sounds like a really hot market but I will NOT make the obligitory remark about it being a "dry" heat :o)))
OR ~ how about an "earthship" on 6 acres in Taos NM for half a million dollars...
http://www.cblotataos.com/listingPrint1.php?ID=1047
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