Slate: “Americans will spend about $1.14 trillion buying 6 million homes this year—both records. Yet the flat commissions paid to the realtors who handle the vast majority of those sales, averaging 5.1 percent, act as an enormous tax on the transaction process, taking wealth from both buyers and sellers in what for both is often the biggest financial transaction of their lives. It’s true that selling a house is a complex task. But so is writing a will, and an attorney doesn’t ask for 5 percent or 6 percent of your net worth as compensation.”
Harold Jarche on September 1st, 2004 at 4:13 pm
In Canada, this company is starting to make some inroads - http://www.propertyguys.com
They only charge a couple hundred bucks for a listing, and you (and your lawyer) handle the sale. Saves a few thousand dollars. I think that you’ll see more of these companies cropping up.
phil on September 1st, 2004 at 4:21 pm
Walmart or Costco could always get into the real esate biz.
Mark Askey on September 3rd, 2004 at 12:47 am
I am not sure if the comparision is accurate.
The agent is paid for more than just filling out paperwork. The agent should also be doing all the other things that are necessary to get the house sold:
- Holding open houses
- Bringing clients by to see the house
- making recommendation on how to fix the house up to earn a greater value
- helping their client offer the house at the correct price.
When you put all of these things into the mix, the commission that is paid to sell the house isn’t that unrealistic.
The problem comes when the agent doesn’t do any of those things. My friends recently sold a house and used a low cost, listing fee only service. It cost them $395 and 2%. They saved some money, but a real estate we are working with thought they sold for $10,000 to little based on her experience in the market.
A good agent should help the process. The old addage “You get what you pay for” comes to mind.
And no I am not an agent, and also think that commissions are a bit high.
Bruce Gadbois on October 28th, 2006 at 3:09 pm
In a small town like Cornwall Ontario, it’s nice to see companies like Real Listings take the Real Estate market by storm. Buyers here average a sale within 6wks selling at 96% of the asking price. Much like property guys they help sellers market their homes, but they’re the only company I know of that offers a comprehensive legal agreement and not just a worksheet. With http://www.RealListings.ca , you’ll save thousands, be legally protected and have a better experience than selling with an agent. I love the idea of selling privately. Thank goodness for new alternatives!