December 1, 2005
PLUS FALLING RATES:
Low-priced Brokerage Is Shaking Up Real Estate CataList, an upstart run by an industry veteran, bucks the established way of selling homes and openly mocks its rivals. (Annette Haddad, December 1, 2005, LA Times)
[Hal Ellis, the 74-year-old founder and chief executive of CataList Homes Inc. ] strategy: Charge home sellers half what most commission-based brokerages do — 3% of the sales price instead of the standard 5% to 6% — without scrimping on service.Posted by Orrin Judd at December 1, 2005 8:25 AMEllis' plan bucks the established brokerage system further by paying his agents as full-time salaried employees instead of independent contractors and using the CataList website as a consumer-friendly portal for all local housing-price data that until recently had been for brokers' eyes only. [...]
He says it is only a matter of time before the market forces down the cost of residential real estate transactions, as it did with securities trading and travel reservations. Ellis also is banking on pure pocketbook economics: As the housing market slows down and values stop rising as fast, home sellers may think twice about forking over a big chunk of their equity to a real estate agent.
Just a few years ago, some realtors were trying to get the 'standard' commission upped to 7%. Wooo Hooo!
Posted by: ratbert at December 1, 2005 9:54 AMSupply and demand. A whole lotta people decided to get licensed as real estate agents. Around here a home seller gets a half dozen agents wanting to sign. Sellers can negotiate commissions down to 4-5%, even lower on high priced homes. Anyone paying 6% is getting ripped off.
Posted by: Gideon at December 1, 2005 4:24 PMHallelujah.
Posted by: Chris Durnell at December 1, 2005 4:58 PMWhat sellers did not realize is that the only actual service provided by realtors is marketing.
If one can find a buyer, there is no reason to pay a commission. Mortgage brokers, lending institutions and title companies actually do all the work, for which they are compensated on the settlement sheet.
Unfortunately, the unsophisticated are afraid to go without a realtor, and wind up paying real money for nothing. It is a tragedy to see sellers plunk out commissions after they have already located a buyer by word-of-mouth, as is often the case in prime locations, just because they fail to understand that a neighborhood lawyer could have represented their interests for a flat fee.
We are now seeing services advertising in our area which offer to help sellers with forms and the like. Good.
Posted by: Lou Gots at December 2, 2005 11:33 AMI wonder if anyone who posted to this thread has actually been in the real estate business and been licensed as a real estate agent? If you had, you would realize that our job is FAR more than marketing or whatever other minimal things that you think we do. We earn our money fairly just like people in other professions.
Unfortunately, since there aren't very many barriers to licensing in the real estate industry, a lot of lazy, unprincipled and unskilled people get into the business and make a bad name for the rest of us who are actually professionals and provide services to our clients that people who don't use realtors don't get.
Always interesting to see people's opinions, but unless you have seen it from both sides, best not to make a judgement prematurely. We call that contempt prior to investigation.
Posted by: Leslie at December 2, 2005 2:54 PM