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REAL ESTATE Real estate commissions

EricWBeck

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Most traditional real estate agents seem to be charging relatively the same range of rates for listing and selling property.

With a professionally taken set of pictures posted on the MLS and a fairly priced home it practically sells it's self given how the listing gets automatically syndicated to every website out there. If an agent lives in a high priced area like Miami or anywhere in California even a 1% commission is pretty substantial (compared to the typical 3% that most list for).

Why does the forum think that agents have seen so little pressure for reducing commissions? What could someone do to take advantage of an opportunity in an area overdue for change?
 

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Hyrum

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Because if people are paying you 3%, why offer to take less?

If you were making $50/hr at your job, would you voluntarily go up to your boss and tell them you would take $15/hr since you can still pay your bills with that amount?

Plus, getting the photos done and getting it listed to MLS is only about 20% of the process. And it's the easiest 20% to do as well.
 

SteveO

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I have bought and sold many houses. The last one I sold was a very different experience. It was a very nice and unique home. I expected that there would be issues finding a buyer for the price.

There was a broker that had a great reputation for selling high end homes. Mine was not quite in the category but she took it on anyway.

The listing price was set well higher than we were hoping for. This is not a typical practice but she felt that a buyer for our place would want to put money into to make this unique home "theirs".

I couldn't believe the pictures they took. They made the home look like a fairytale. Advertising was done on a grand scale. Our house along with her other listings were out in publications with large colorful pictures.

She quickly found a buyer that as she predicted, wanted to put money into changes. There were definitely negotiations.

We got the proceeds that we wanted and a closing date that was ahead of schedule.

There were a number of offers that originally came in. Her and her team helped us to pluck them like weeds.

This was worth every penny of the 3%.
 

SquatchMan

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There are already flat fee MLS brokers.

And the people that are willing to pay 1% are probably the same people that would rather pay $200 for a flat fee broker.

Who knows though, it might work. My parents live in Tampa and have about one investor/builder a week knocking on the door to buy the house. The market is HOT!
 

Red

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Why does the forum think that agents have seen so little pressure for reducing commissions?

The price is what the market will bear & in this case, it's seems like tradition. Tradition being based on perceived value.

What could someone do to take advantage of an opportunity in an area overdue for change?


As @Hyrum mentioned, would YOU be willing to take a two-thirds pay cut simply because you were asked? I doubt it. Especially not in such a litigious industry where the agent takes on so much personal risk. Real estate agents are no longer in the "selling" game, they're in the "navigate the legal minefield" game & if yours sucks, it can cost you a lot of money. Any monkey can open a door or put a home in the MLS (and I tell my clients exactly that). It's not about selling any more, it's about legal protection, being shielded from the antics of idiots (that cost you money) & maximizing your bottom line in the endeavor. In states like AZ, we are licensed to practice real estate law.

The secret to the residential real estate agent's "monopoly" on current practices is the MLS. I personally believe that real estate commissions will drop closer to 1% on each side, eventually. But it's going to be a fight. You have to get a group of agents to agree upon & utilize a different kind of MLS and that's going to be a tough sell -not saying it can't be done, I believe it eventually will. I just feel it will be an uphill battle.
 

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