CUTTING THE COMMISSIONS

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The higher-priced brokers will keep up the fight for their cartel, but the discounters have the wind at their backs, says Stephen Murray, editor of the industry newsletter Real Trends. Today they're just 2 percent of the market, but could grow to 12 percent by 2010. Hey, this is America--we're supposed to support price competition. That means brokers, too.

Reporter Associate: Temma Ehrenfeld

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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.

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.

I believe a few simple regulations are needed to protect home buyers and sellers -

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 ???

Gives home buyers control over which real estate services they want, if any.

1 - Lowers the cost of homes for buyers by reducing real estate commissions. This will help more people afford homes.

2 - Increases competition in the real estate industry which will help lower commissions overall.

3 - 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.

Member Comments

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Posted By: wildonion773 @ 06/18/2008 1:28:38 PM

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.
- Reply
- Report Abuse
Posted By: wildonion773 @ 06/18/2008 1:24:47 PM

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.

I believe a few simple regulations are needed to protect home buyers and sellers -

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 ???

Gives home buyers control over which real estate services they want, if any.

1 - Lowers the cost of homes for buyers by reducing real estate commissions. This will help more people afford homes.

2 - Increases competition in the real estate industry which will help lower commissions overall.

3 - 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.