Posted on 05/09/2005 4:59:07 AM PDT by Koblenz
I frankly like the idea of a Fee for Service program. The Realtors Associations should not be allowed to keep Realtors from offering their services on an 'as needed' basis. If I only want a realtor to list my home on MLS, and I'll do everything else, I don't want to have to pay 6% or even 4% for that. I'd like to be able to negotiate a price for the services I think I'll need.
the Kentucky Real Estate Commission illegally conspired to impose and enforce the rebate ban in order to fix commissions and deprive consumers of price competition by brokers.The Justice Department and the FTC have warned several states in recent months that such laws hamper innovation and competition, and have formally objected to industry-supported proposals in Oklahoma and Texas. (emphasis mine)
I am basing my comments on the article's description of state real estate commissions pushing legislation to fix commissions. If the article is incorrect, then my objections go away.
When I sold my house in Florida I negotiated 4%. Since when is 6% legally-mandated?
The associations (at least in our state) are NOT allowed to dictate how services may be offered or what may be charged.
I do live in CT. And I understand this but the other poster doesn't seem to or it's not the law in his state.
All commission percentages are negotiable in CT.
I know this too. When we were looking for a house or land we got the same from all realtors: "The state says we can charge 6%." They left it at that giving the impression that it was set by the state and inflexible. I know different now.
That said, I'd like to know how, as you state, all realty business is done on the internet......
What I said was: "It's all done on the internet and through networks." Meaning that all houses and properties are listed on the real estate network (I forget what it's called) and now on the internet. As an agent a buyer comes in (like we did) and they look up what we want by price, location, land type, etc. How hard is that?
My brother works for a company whose big client is Raveis Realty. He is in charge of putting the listings into the system. The RE agent doesn't even have to do that if someone comes into their office to list a property.
So, you drive around and meet someone at a house to show them. What makes you a better choice to sell my house (at 6%) then me? Do you know more about my house than I do? I bought the land and built the house through a construction loan. I know every knook and cranny of my house. If I want to sell it why do I have to pay 6% to someone just for access to system?
Here we have a lot of transits. Those people definitely need the services of an agency.
Not exactly as a mortgage broker friend of mine tells it.
He claims the mortgage broker orders all inspections, acquires updated insurance policies, orders title search, runs credit check, finds lender & gets loan approval & gets all necessary paperwork in a packet for the closing officer.
According to him, all Bambi the Real Estate Agent does is take the client upstairs to show them the basement, then downstairs to show them the attic and fills in the blanks on an offer form ;-)
No offense taken, and we want the "bad apples" out of the business too! They make all of us suspect in the eyes of the public.
*Sigh*... read the article... in some states, real estate associations are pushing legislation to fix commissions. Just because it hasn't happened in you state (yet) doesn't mean that the problem isn't out there.
Ridiculous. Realtors do a tremendous amount of work - furthermore, if you FISBO your home or go with a discount broker (who basically does nothing but list it), you're getting away with it only because the other party generally has a realtor, who ends up doing all the legal work (title search, home inspections, warranties, contracts, etc.) for you.
People can also do their own plumbing if they are so inclined; but plumbers still have licensing standards, generally standardized rates for an area, etc. Why isn't the government suing plumbers' associations?
Ask more people than your friend. You would be wrong about who does the leg-work at least in some states. The reference to "Bambi" is just insulting.
I recently represented the seller on a real estate for the sale of her home. The selling price was $590,000. The house sold in three days. The commission was $35,400, for what amounted to three hours work. My fee was $950 for the transaction, which included negotiating and drafting the contract of sale; drafting the deed; drafting various tax forms and documents; drafting the escrow agreement; dealing with the local building department regarding a problem with the certificate of occupancy; reviewing the title report and taking the necessary steps to clear title; and attending the closing of title. Guess whose fee my client complained about?
Commission rates should not be regulated, lower rates allow small companies (like the one I work for) to compete with the mega brokers, who have many additional operating costs (franchise fees, personnel, IT, signers etc).
As for the worth of a Realtor, many are worth the cost, many are not just like any other service. Why do people hire a financial advisor when they could do it themselves? Much work usually does go into selling a house, or expecially working with buyers (and many do take months to find a home)...not to mention many sellers and buyers are not objective enough to negotiate, cannot spare the time to show, pre-qualify, walk through the steps to closing, save a deal etc. It can be a very harrowing experience, especially since it is a huge investment and when things go wrong it can be difficult to separate emotion out of the deal.
Here's a true story for you. I owned a rental property (a row home) that was going to start needing repairs soon. With prices up, I decided to sell. Someone two doors down, living in an identical home, also decided to sell. They used a realtor. I sold myself. I sold mine a month before he did. We both had bidding wars on our properties and he ended up getting $10,000 more as a selling price than I did. Truth be told, his house was in slightly better condition, so it didn't surprise me one bit.
But by avoiding commissions, I got $11,000 more than he did at closing. Of which, I owed $800 to a real estate attorney. In this market, I really think you have to be incompetent, unpresent, crazy, or lazy not to sell your own properties yourself.
Plumbers rates are standard only for union work. Otherwise a plumber (in PA, anyway) can charge whatever he pleases.
$35,000 to sell a house? That's good for you, but your client is probably now realizing that it was not a good deal for them.
Dear old and tired,
"Also, with the internet, I can't see why the average person needs an agent to buy a home."
A problem in this area is that unless you're working with a buyer's agent, it is likely that the more desirable properties will be sold by the time they get on to the Internet.
Around here, it may take two or three days for a property that has a For Sale sign to make it to the Internet real estate listing sites. By that time, the house may already have multiple contracts.
Of course, that really doesn't argue for HIGHER commissions, LOL.
sitetest
I have sold two house on my own. Put up some signs, ran ads in the Sunday paper, did open houses. When it sold, doing the paperwork was a piece of cake - the buyers bank takes care of everything. If I ever sell our current house, I will do the same thing. Real estate is the biggest silent collusion business in the country. I honestly believe that people think they HAVE to sell their house through an agent. As you said, 20 years ago houses were a lot less expensive. Having to fork over tens of thousands of dollars is ridiculous.
I am opposed to the government mandating a fee for any service a private citizen provides.
I agree SOME work hard but why not a sliding scale.
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