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 ...
A family member is a realtor, and she says people have no idea of the stress of trying to sell your own home (in certain markets), plus the fact that fisbos often do get less for their homes and are talked into unfavorable contract conditions that any decent realtor would have refused.
As for the "discount" brokerages, these are agents who provide minimal services (and often aren't very competent, because they never go into a deal very deeply). They are relying on the fact that the person on the other side of the deal will be a full-service realtor who will end up essentially handling both sides of the deal simply to get it to go through.
The old motto, "you get what you pay for," sure hasn't changed.
That said, I agree that people shouldn't pay too much, but the 6% is split between the selling and buying agent, so generally each actually gets only 3% (which is why agents like to sell a house that they themselves have listed). And statistics consistently show that houses sold through realtors sell for higher prices.
We sold our last house ourselves and were amazed at how easy it was. If you price it right, it will sell. Ours sold in two days. We had a lawyer do all the paperwork for us and everything went smoothly and on schedule...much better, in fact, than when we've had realtors selling our previous homes. And our costs were 1/10th what a realtor would have cost us. We felt stupid for listing with a realtor in our past transactions.
But understand when you are whining about the 6%, that people will work only as hard as their incentive to do so. Here is an interesting article about a couple who couldn't sell their place in Manhattan at 6%, and so offered 7% and raised their price...the place sold almost immediately for the new asking price. A good lesson in human nature and motivation...
We are not communists.
That is great, but i will not pay a realitor more the 3k to sell my house. If you do your research, price your property right, and prep the property right. And that should only take a weekend, you can save thousands in commissions.
Take your choice, whatever reason you opt to believe is one I'll go along with.
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