As most people know, home sellers can choose to use a real estate agent or sell it themselves and save the commission expense. Home buyers however, do not have the same option. They must pay for real estate services even if they do not use a real estate agent.
In the current system, the seller and the seller???s agent pay the buyer???s agent. Not only is this illogical, but the buyer loses all control over thousands of dollars in commissions. In the case of an unrepresented buyer, the seller and the seller???s agent typically keep the buyer???s agent commission. Most of this commission, if not all of it, usually goes to the agent even though no additional service was provided. In effect, the agent is collecting a bonus while the buyer does all the work. And the seller has less room to negotiate.
I believe a few simple regulations are needed to protect home buyers and sellers. If you agree, please contact your state and federal representatives -
1 - The commission a seller???s agent receives can not change because a buyer does not have an agent.
2 - The buyer???s agent compensation must be paid solely by the buyer.
3 - The buyer can add the buyer???s agent compensation to the mortgage.
There are several benefits to this change ???
1 - Gives home buyers control over which real estate services they want, if any.
2 - Lowers the cost of homes for buyers by reducing real estate commissions. This will help more people afford homes.
3 - Increases competition in the real estate industry which will help lower commissions overall.
4 - Prevents seller???s real estate agents from collecting a double commission while providing no additional services. The current system artificially inflates housing prices making homes harder to buy and sell.
CUTTING THE COMMISSIONS
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FSBO sites (pronounced "fiz-bo")--"for sale by owner." People selling their own homes account for roughly 15 to 20 percent of sales. You'll find pots of free how-to information on FSBO Web sites. For a fee, you can buy a FOR SALE sign, an 800-number service for taking calls and a listing on the FSBO's site, with pictures of your home. You can even buy a listing on the MLS, so shoppers everywhere can find you. But buyers have to call you directly. If you want a broker to bring you customers, you'll have to offer a commission.
The FSBO sites offer different services at varying prices. A package at ForSaleBy Owner.com includes personal telephone consulting to guide you through the sale. Owners.com is affiliated with Cendant (Century 21, Coldwell Banker). If your house doesn't sell and you decide to switch to certain of its brokers, you'll get a $1,000 rebate on the commission. Owner.com (not affiliated with Owners.com) lists other FSBO sites.
Fee for service. These brokers offer a menu of services, each at its own price. If you're selling your own house, you might want help with paperwork after you've found a buyer, or you might want the broker to show your house, or you might want an MLS listing. You buy only the service you want. Two such franchises: HelpUSell.com and Assist2Sell.com.
Referrals and rebates. These sites link home shoppers with real-estate brokers. If you buy, the broker pays the site for the referral, which in turn rebates part of that money to you. At Realestate.com, the rebate ranges from $100 to $2,250, depending on the price of the house, and comes in the form of a Home Depot or American Express gift card.
Bidding sites. At HomeGain.com, you describe the property you want to sell or buy and ask brokers for proposals (including commission charges). A new site, HungryAgents.com, encourages brokers to bid aggressively for your business.
Unfortunately, some of you aren't allowed to use all these money-saving services. Your state's self-interested real-estate brokers are driving them out. Six states (Florida, Illinois, Iowa, Oklahoma, Texas and Utah) now curtail companies that offer discounts, according to Inman Real Estate News. Other states have stopped FSBO sites from helping you market your home through the MLS. A dozen state real-estate commissions are trying to regulate discounters out of existence. Kentucky bans rebates entirely--but, in a strike for consumers--it's being sued by the U.S. Department of Justice for restricting price competition. The National Association of Realtors was planning to set new MLS rules to let traditional brokers keep their listings off the discounters' sites. The Justice Department stopped that, too.
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