Posted on 07/27/2006 5:37:21 AM PDT by Hydroshock
NEW YORK (CNNMoney.com) -- The fight over competition in the real estate industry went to a new battlefield this week as representatives of consumer groups, brokers and government agencies clashed before a House subcommittee.
Few participants pulled any punches.
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Steven Brobeck, executive director of the Consumers Federation of America, told the subcommittee on Housing and Community Opportunity that the real estate business model is a "cockamamie system . . . nonsensical and ridiculous."
Among Brobeck's beefs: He claims prices are rarely advertised, that restrictive state laws and anti-competitive practices prevent consumers from getting discount service, and that there are roadblocks to securing key product information through the Internet.
Aaron Farmer, a discount broker in Texas, described how full-service brokers discriminate against discounters: They refuse to show discounters' listings, Farmer said; pressure home magazines to not accept advertising; and refuse to allow discount brokers' clients to view home listings full-commission brokers control. They even destroy for-sale signs.
The full-service brokerage industry, as represented by the National Association of Realtors (NAR), has fought to maintain the status quo. In nine states, for example, there are minimum-service laws that effectively force all agents to provide full service - discounters would otherwise be willing to offer limited services and charge home sellers much less than the traditional 6-percent commission. There is move to pass such a law in Michigan.
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I could not agree more.
In the past they have justified the 6% commissions on the basis of the high cost of advertising.
The internet has changed all that.
As with other business sectors, they are being dragged into the 21st century kicking and screaming.
BUMP
The full service brokers remind me of the RIAA and the discount guys are music download industry.
The selling model is changing in favor of discount brokers or at least reduced fees from all involved yet the Realtors want to fight it tooth and nail to preserve their "established" fees.
6% charge for smoke and mirrors? No thanks.
I would never again use a full service 6% broker. Never.
No .. you've got it all wrong. What we need is a "Living Wage" law for all real estate brokers, where every home owner in America is required to move once every 4 years, and they must pay a broker a minimum of 6% (2% of which will go to the federal government to be used to pay Real Estate Brokers who don't make enough themselves to place in the top 50% nationwide.) That way, everyone can be above average, and the problem is solved.
Hooray... the government has saved us again.......
Sorry you feel that way, all my past clients write me love letters.
I have used realtors twice, all tehy did was throw the listing on MLS and try to shaft my fmaily. Never again.
Well I'm sorry to hear that, what happened?(be back in about 15 minutes)
Caveat emptor. You have to do some legwork to find out what is going on in a competitive industry.
Now this good experience is counter-balanced by the filthy sharks that make up the Cape Cod (and Massachusetts) Realtors.
All in all, I'd say that real estate is just like any business in that it takes all kinds, good, bad and indifferent.
Caveat emptor still applies.
Why does the listing agent make so much? Have they talked someone into selling their house? All the sellers I know looked up an agent to sell their house because they wanted something else. Selling is a regular market, only the lister is solicited.
My beef is the listing agent's commission. Please explain why the listing should make anything beyond a flat rate. Please explain why flat rates should not be used in real estate sales.
I'm a former commission only salesman and am now self-employed. Therefore, I believe the real pay should go to the person who makes something happen, not someone who passes along the buck. I was never paid a percentage. I was paid a varying commission set by the seller. Is there something wrong with that?
" tort lawyers charging standard contingency fees of 1/3 to 50% even in cases where liability is clear, damages are substantial, and the lawyer knew at the outset that she, in all likelihood, would earn windfall fees of thousands of dollars an hour."
There's no way to reign in these fees, because Lawyers control the ENTIRE legal process in their own best interests. No competition is allowed, and you'll never find a Lawyer who will sue Lawyers under a RICO complaint, or, even if one did, no Lawyer who has become a Judge would allow them to win the case AGAINST one of his fellow Lawyers....
BTW, the last two homes in So. Cal. I used the broker, not an agent. One was 2-1/2 percent and the other 3 percent.
You just can't give your money to a real estate agent "friend."
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