patrick.net

Thanks Biff, but they would still have a motive to get you into as much debt as possible if they were running on a commission basis, right?

Fixed fee seems less of a conflict with their own customers, but they still would get nothing if you don't buy. So they'd have a motive to push you to make some purchase to get their commission, no matter how bad it is for you.

What would remove those conflicts of interest? Hourly work would do it, but realtors are not signing up for that.

I believe that many if not most realtors will say or do almost anything to get a client to close a deal. That does not relieve me as a client of personal responsibility in a transaction. Whether I purchase a television set, an automobile or the services of a lawyer (even worse than realtors), I need to shop around and scrutinize those who I buy from.

The internet has done a lot to reduce prices to consumers. People walk into Best Buy every day, look at a television, look up the internet price on their iPhones and then purchase on line from a vendor other than Best Buy. This practice is doing serious damage to Best Buy's profit margins and has even put at risk their viability when only two years ago they were regarded as absolutely dominant in their space.

It can be challenging to find and then negotiate with a realtor to lower their rate. Finding several and negotiating with several is significantly more difficult. I don’t need more backbone when dealing with a realtor, I need easy access to competitive pricing information.

I believe that free classified ads on your website would provide realtors passive access to a targeted group of potential buyers (patrick.net readers). Realtors having difficulty getting business (which is most of them) are likely to advertise because it is free and this would create competition for a service that is virtually a commodity. The only thing sustaining realtor’s commissions is the fact that most are not publicly available.

Much in the way that MLS data has made realtors less powerful, access to competitive pricing will put power in the hands of purchasers (me).

Put aside our hard and shared feelings about realtors and do something effective to make them compete on price.

If realtors post fixed commissions, I am certain buyers like me will benefit. I would guess that most realtors would be scared to death of this idea.

My only fear is that realtors may not post due to pressure from their franchise.

What if you had easy access to information about the margin various Ford dealerships were charging for the same Mustang? Who cares if it is a percent or a dollar? I can do the math. I believe this would put me in a strong negotiating position.

Biff

I thought the commission structure was built into NAR/CAR and there isnt much leeway on it if they'd like to stay members of their little realtor cult.

I dont think its pointed out often enough, but during the bubble someone had to move all those homes. There was a bubble in the amount of realtard working the fields.

Given how hard its been on them in past few years, if lowering their overpriced commission meant they might get an extra customer or two I'm sure they'd be all over it, just trying to survive... Something is holding them back, and I'm sure the same thing would hold them back here as well.

Realtors routinely lower their commission. It is absolutely common. The franchise ones tend to lower their rates a bit less (maybe 1/4 point less).

I don't know if there are any issues with realtors openly advertising significantly lower rates.

Biff

Biff - To avoid confusion concerning the "Buy" or "Sell" side, there is a listing office (the broker/agent who represents the seller) and a selling office (the broker/agent who represents the buyer).

Commissions are negotiable. The listing office negotiates with the seller for a total commission to be split between the listing office and the selling office (usually 50-50 but sometimes not).

The franchise-type brokerages typically have guidelines, or policies, which may restrict discounts and therefore limits the ability for a seller to negotiate.

On the selling side (representing the buyer), the selling office simply accepts the commission offered (typically 2.5%-3% in CA).

An independent broker (versus an agent) can negotiate freely and is not restricted by franchise policies. This might include the broker crediting a buyer on the selling side some of the commission offered if, for example, the buyer goes through the usually time consuming act of identifying the particular property while the selling office prepares the purchase and sale agreement and all other documentation and shepherds the buyer through closing.

Just make sure that they don't post anything in CAPS. LOL.

Regarding rhugo's comments:

Paragraph 1: Yes.

Paragraph 2: That is essentially correct but the way you worded it is confusing and could easily be misinterpreted.

Paragraph 3: Yes. They still negotiate but generally don't cut their rates quite as much.

Paragraph 4: Where did I leave my shovel? As a buyer in a buyer's market I can squeeze the selling realtor's commission like a grape. I don't have to accept anything and neither does the seller even after they have signed a contract with the selling realtor. Getting a reduced commission from the selling realtor is not uncommon. Getting a reduction from the buying realtor is even easier.

Paragraph 5: Yes. Independent brokers are a little harder to find. Sheperd?

You sound like a realtor.

If you could quote a relevant line with the "Quote" link before answering it would be clearer what your answers mean.