As such, your attempt to present the listing of additional photographs as a reason for a seller to pay full price tips your hand – i.e., you reveal yourself to be intellectually dishonest, ignorant, or both.

I just took another peek at your post and saw that you use a similarly disingenous argument – you set up automatic email notifications for buyers so they see new MLS listings that meet their search criteria. You crow that you do this “at no extra cost.”

WOW – that is so GENEROUS of you!!!!! (Sarcasm…)

Sorry – it’s not that I don’t have any sympathy for agents – I do, for honest, plain-speaking, hard-working agents.

However, your arguments are disingenous, slippery, and deceptive. You present two “services” (listing photographs, sending automated email reminders) that have virtually zero marginal costs as reasons for a homeowner to pay you THOUSANDS of dollars.

I would never hire any agent that argued like you do because your arguments reveal the integrity of a Three Card Monte dealer. It’s agents like you who breed cynisicm in homeowners like me.

I have watched thousands of people lose their jobs in the brokerage industry as commissions head toward zero. It’s time for real estate agents to face the same pain.

Zillow is interesting, but the numbers don’t seem very trustworthy to me. I own a central austin duplex which it gives a value of 142k for. The duplex next door is identical in every way – same floor plan, built the same time mine war. Zillow says 185k. Oddly enough, they both only have one comp, a duplex way over near braker/I-35. I think I could list it now for 195k, but I don’t really know for sure. I’m guessing that it is getting confused because the property was split for tax purposes when I was owner occupying one side.

I’m planning on moving out and have been looking at condos in the area. I gave trulia a shot, and I was reasonably impressed with the results. If it could use real MLS data instead of outdated information from realtor websites, it would be great. This is exactly how I want to search for properties. I’m very picky about neighborhoods, and this is the only site I’ve seen that allows me to dig down into neighborhoods that I’m interested in. I ended up finding a nice unit, and I’ve got an appointment with my realtor to take a look at it monday. Assuming it is as good as it looks, I’m sure I’ll make an offer.

I’m sure there are other interesting sites. I’d be curious to know what they are and what their good/bad points are.

Well Bill, that explains why you are such a passionate crusader for discounters. Like the vast majority of others who share your view, you got screwed by bad realtors. I try to be different. I come from a tech background so I use technology to the max, so my clients are always surprised at just how much useful info I extract for them out of the MLS.

Zillow is garbage. I pulled up my neighbor’s home. The value was 10% off and they used comparable properties from 5 miles away.

MLS is paid for and compiled by Realtors, so I don’t see why it should be given away. It’s NOT public data, it’s OUR data, our system, etc.

Consumer MLS won’t work for several reasons:

1. Cost – MLS costs a lot to run, but with realtors, we get economies of scale. To me $400 a year is OK since I make up for it by doing business. Every public database I’ve seen only has a list of homes currently on the market, and sites like Zillow use outdated data, so their estimates are useless.

2. Quality – Agents are fined for putting in bad data into the MLS, fined for not putting up photos or having misleading photos, etc. If some Joe misrepresents his house to entice buyers to come there and wastes everyone’s time, who’s going to fine him.

3. Security – Have you not heard of cases where people get robbed, raped and killed while showing homes. The lockbox is a wonderful way to let others see your home without you being there, but it realies on the fact that if somethig bad happens, there’s a negligent buyer’s agent who can get sued.

I think it’s you, Bill, who’s being unreasonable and coming up with lame excuses, just because you have a grudge against agents.

My point is not about travel agents’ work being equaly complex. I was making a comment on Jim’s assertion that there’s not a chance that a free MLS type search engine will ever be in place. I disagree wholeheartly. Unfortunately, I don’t think Jim is getting it.

Jim is right about one thing though. Information is valueble. If you keep all these information to yourself (realtors that is) and close them to the buyers, you artificially created a value for your service. Then you can use all kind of excuses to defend that blockage of information. Once we force that information to be free and open, your full service value decreases. Zillow.com is a good example. I can pull up any home’s past information much quicker and much visually representative than MLS’s crappy interface. And it’s free!

By the way, more than half of the realtors I met aren’t particularly technical skilled. I fired two buyer agents who can’t even pull the CMA correctly. They claim that they don’t really rely on data, they rely on customers’ heart: “if you see something you like, data doesn’t matter.”

These agents are truly rip-offs and all of them are getting the 3% commission.

You think a full service Realtor is a rip-off? What about the MLS-only realtors who only post your home? They pay $400 a year to be in the MLS, but they charge you $500+ a pop to put your ad in there. They’re reselling a product for much more and providing no service, leaving the buyers agent to deal with both sides.

All those BS websites like zillow or the discount brokers have plenty of opportunity to take over the real estate world, and they haven’t. Consumers vote with their dollars, and judging by the horror stories, I think they’re still voting for full service.

My advice to anyone who thinks being a realtor is easy, why don’t you get a license and try to make a living out of it. You’ll see just how hard it is. I used to think it was easy too until I became an agent.

The travel industry is not a good comparison. There is little distinguishing one plane ride from another, and it’s a one-time fixed, relatively low-cost, low risk event. The transaction is a simple 3 minute process whereas the real estate transaction is much more complex, time consuming and risky.

So, no matter how different our opinions are, we should at least try to understand each others stand point.

Uh, Jim, have you ever heard of Google? It’s the largest search engine and it’s FREE!!! Have you ever search for flights and pricing on Orbitz, Expedia, Travelocity before? I guess, if you use your own analogy, you would trust only travel agent to book all your flights and travel itenary. The chance of your travel screw up is so huge, why should you search for Hotel.com anyways?

Amazing that you live in Austin and don’t believe in talent and technology. Trust me, when the “whineing” FTC lawyers get down on the industry, there are hundreds of thousands “Google” engineers are eger to set something up. To be honest with you, the current MLS doesn’t really impress me that much in terms of technology and searchability. The fact there’s no competition of MLS search engine out there troubles most of us.

Truth is, most buyers go to the agent because they want to be sure they’re not getting screwed and saving time, so sellin on your own will never really work. An MLS-like system will never be setup by random people, because it requires too much organization and ongoing expenses to run.

I have no problem NOT working on commission, but then what would motivate me to even take on a more expensive listing? Why would I work for 1%, which in Austin would mean $1400 after broker splits, when I can make $750 as an apartment locator by signing up one apartment?

It’s all relative. I don’t mind discounting a $1million, but on cheaper ones, NO WAY. And ironically, it’s the people with the cheaper homes who whine the most about commission.

My advice to all you complainers: Don’t like it, don’t use a realtor. THERE IS NO PRICE FIXING. Commissions are negotiable. You can even negotiate a flat fee. However, most people find out that in most cases they get what they pay for, since a realtor simply can’t survive selling run of the mill homes for 1% or flat fees.

How much more clear can that be?

Not sure what you mean. I’m fairly open minded about Discount Brokers and the ability of customers to choose the level of service they want when embarking on a real estate transaction.

Ultimately, the market will settle this matter through competition. If Realtors like me become obsolete, I’ll figure out some other way to make a living. But technology and the internet can only erase so much of the manual process because, in the end, Buyers are always going to need to be driven to and let into a property, and there will always be Sellers (most I believe) who will not want to deal directly with Buyers, so Realtors are not going away.

I appreciate the comments and feedback.
Steve

I hope you could be a little bit of self-critical rather than being self-defensive. You should at least try to understand the opposite side’s argument.

In the end, it is $$$ that makes sense. For real estate brokers and agents, the idea of doing away the fixed 6% commission is nerve racking. Especially for those successful ones who can make a petty good living (whether they drive a BMW or not is not an issue here) are worried about their livelihood. In my personal opinion, they shouldn’t have to worry whatsoever. If they are really that good, they should charge 7, 8, or even 12 percent if they can get the sweet deals other couldn’t.

On the other hand, almost all consumers want to pay less commission and gain more profit on their sells. If this means that they have to take our their digital camera and shoot half dozen pictures and then post them online as if they are doing it on myspace.com, I say why not. If this means that they need to open up a web program which they can set up a few simple queries so that they can see the CMA themselves, I say why not. Customers will say, don’t you worry about me being screwed. We choose it that way, we will take the responsibility and the consequences.

If you are skilled and experienced, you do indeed get paid more under the current system, but only because you attract more clients. But from the client side, they pay the same whether they learn that they should go with Mr. Experienced or Mr. Newbie. That system is unfair to the customer base as a whole you say you are trying to serve.

You say a flat fee approach hasn’t gained market share? What new entrant model can gain market share when you have entrenched players working together to promote a price-fixed system?

Just to be clear – I am in not in the industry in any way. I decided to build a new house to avoid real estate agent fees. But I will have to sell it one day and will likely have to enter the suckers’ game like everyone else. Because the industry is too stacked against me until the government comes in to break it up and make it an equal playing field from the customers’ point of view.

You are just matchmakers – matching buyer and seller. If this legacy 6% commission world didn’t exist, deals would still get done at a range of costs. And competition, essential to capitalism, would settle into a tiered market.

You bring up many of the same points that the opponents of the current real estate agent compensation system raise. But your arguments leave out a lot of other factors.

One of those many factors is the amount of uncompensated work that Realtors perform. We only get paid if a deal closes, and we therefor perform a lot of work for which we never get paid – especially with buyers who never buy.

If a consultant model were to be brought in, every buyer and seller would need to be willing to pay a retainer up front in exchange for a lower commission. Some Discount Brokers have in fact implemented such an approach. For example, they will list a home for a discounted commission, but the Seller must pay $500 or $1,000 up front. Buyers and Sellers do not seem exited about this approach, and that model has not won any notable market share.
Steve

The bottom line is there is no reason that real estate commissions should be based on a % at all: how much extra effort does it take to sell a $900K house over a $700K? Maybe some, but $12K more that the seller has to shell out? Likewise, one $300K house may be an easy, quick sell while another may require hours of legwork. What possibly is the reasoning to charge the same amount for both? I’m sure you will argue that the easy sales make up for the difficult ones and it all balances out. That is an economic punishment to sellers who take care of their home, stage it well, or chose wisely a property that is desirable to customers.

You are an agent. That is your business. You are embedded in the culture and the details. You will make excuses to why alternatives just aren’t as effective to convince yourself that you treat all of your customers the same. At the end of the day, it is the largest price fixed industry out there.

Real estate buy/sell services should be based on a fee system that is determined like a consultant does for work: offering a price that matches the effort required or the talents of the agent. But real estate agents will resist that. Why? Because as home prices increase over time, the $$ paid to agents increase accordingly even if the effort or talent brought to the job remain the same.

When you can’t compete based on quality, you compete on price.

By advertising a 2% commission, that seller is in effect pricing the listing 1% higher than similar properties in the neighborhood, who advertise 3% commission. They’re trying to be sneaky and get more than market value for their home, and all you do is bring them down to reality by offering 1% less than what you would have offered otherwise. It’s the same way with FSBOs.

The commission is part of the sales price. When you buy a home, the seller paid for it, and it’ll be your turn to pay it when you sell again, just like with title insurance. Some sellers for some reason think they can cheat the system.