Feds probe real estate agents (6% commissions)

Feds probe real estate agents

Money magazine investigation shows Justice Dept. looking into anticompetitive practices.
April 22, 2005: 3:00 PM EDT
By Jon Birger, Money Magazine

NEW YORK (CNN/Money) - Did you pay your real estate broker too much? The U.S. Department of Justice may be set to turn Tulsa, Okla. into a test-case for ending the stranglehold 6 percent commissions have over the real estate brokerage business.

MONEY has learned that Justice's Antitrust Division is gathering information on the bully tactics that full-commission brokers in Tulsa allegedly use against their discount rivals to discourage commission-cutting. The probe follows other recent efforts to spur competition in the real estate industry.

According to a copy of a Justice Department subpoena obtained by MONEY, federal investigators are seeking information on "possible anticompetitive conduct in the provision of real estate services in the Tulsa area" as well as "documents related to refusal to cooperate on real estate transactions."

(snip)

Economists who study real estate, such as the University of Cincinnati's Norm Miller, believe anti-competitive behavior is the primary explanation for the persistence of the 6 percent commission. J.D. Smith and Bob Meyer are two Tulsa discount real estate agents who say they were interviewed by federal investigators. They say the investigators wanted information on full-commission agents' alleged refusal to show home-buying clients properties listed by discount brokers -- a tactic known as boycotting.

http://money.cnn.com/2005/04/22/real_estate/justice_realestate/index.htm?cnn=yes


Well, it's about friggin' time the Justice Dept. actually administered some justice. This is a ridiculous scam that's been going on way too long.

mrs. unblock and i are really enjoying doing home improvements on our house.

if and when my company goes ipo and i actually have some $$ to play with, we're thinking of getting into the business of buying underpriced fixer-uppers, spending a few months bringing it up to par, and selling, then moving on to the next house.

6% commissions make a SERIOUS dent in this business. I would love to see discount brokers like yhd foxton's become much more the norm.

honestly, there's nothing that the "full service" brokers provide that hugely different from the discounters, certainly not worth double commission.

one Real Estate Company sued all the others in town (& certain agents) and they had taped phone conversations. Cannot remember who won the case but I believe the most that was done was "you will not discriminate" against the discount broker. As if that changed anything - it didn't - they were just more cautious.

The average agent only receives 1.5% commission if the negotiated fee is 6%. Half of the negotiated commission goes to the buyer's brokerage which generally keeps half of that to cover expenses like office, phone, advertising etc.

A listing agent is expected to advertise and promote the property. Here in Ft Worth a 2 column inch ad runs about $400 and has a life expectancy of 30 minutes. Advertising in any of the many real estate magazines is about the same but has a bit longer shelf life.

You must have a website and costs for that run from a one time $9.95 fee that gets you nothing to several hundred a month depending on options and management. The more ya' spend the faster your client's homes sell.

My bare minimum expenses for professional dues, continuing education, subscriptions to MLS, CSS, E & O insurance and various websites come to about $9,000 a year BEFORE I take a single listing that I have to advertise.

3 of 4 FSBOs hire a Realtor after spending in excess of $1000 trying unsuccessfully to sell their own home. Half of the remaning 1 just give up and either live there or let the bank take the house. One in 8 actually sell their home and many of them make less on the sale than if paying a full service realtor.

My fees are negotiable. I charge more for properties that are challenged and require more work and less for those that "sell themselves" (yeah, like that's gonna happen).

I am paid handsomely for what I do but God Dam it I earn every fucking penny.

Fees are negotiable.

On the hypothetical fee of 6%, the breakdown is as follows:
3% for the company who listed your home, divided between the agent and the company. Often this is divided 50/50, so the listing agent gets 1.5%.

Then you have the selling company, who gets the other 3%. This is again divided between the agent and the company...usually at 50/50.

The individual agents, being self-employed, pay quarterly taxes, pay both sides of their own social security, mls dues, dues to belong the the regional and national Board of Realtors, advertising, gas, business tax, their own health insurance if they have it, error and ommissions insurance, and higher insurance for their vehicles since they are used for business, etc.

They only get paid IF and WHEN a home settles. Some don't.

my husband sells real estate for a living and what you say is true. you may be paid handsomely but then you must pay a lot of expenses up front to get business, you must also pay your own FICA taxes (the full amount) yourself.

He may gross 80000 in a year but by the time we take out all of his expenses and tax payments we may be lucky to see half of that.

a good full service broker does a crap load of work for the buyer/seller. most people simply do not know unless they try to do it themselves and then learn the hard way.

many discount brokers do very little in the way of advertising or other work for the buyer/seller. if the property sells great, if not so what. they get a lot of listings promising a lower commission and make their money by volume. so what if the individual lister doesn't sell.

as far as i know here in palm beach the realtors will show the buyer anything he wants to see whether it is discounted or not.

At least that's the way I read it. Earning a good living by working hard is not what they are looking into. It's the fact that the free enterprise aspect of this business may not be all it should be.

For example: Walmart squeezes every local business by the balls and doesn't always play by the rules. The independents still need to have a chance in every business. It think that's what they are addressing in this investigation. I wish they'd look at Walmart while they're at it.

Realtors are independent small business persons. As you point out, when Sally shows a house and you buy it, Sally doesn't get both food on her family **and** a trip to the Bahamas. She barely gets a few thou. The commissions get split seven ways from Sunday, and Sally has to meet all her own expenses ... usually including health insurance (if she chooses to have any).

I'm not a realtor, and I don't play one on teevee, but I've worked with plenty and have two as close friends. While both of them do it full time and, as you say, make a very reasonable living, there are plenty of realtors who come close to starving ... either because they're part time or they don't work in .... uh .... prosperous areas.

Nope, I don't begrudge a realtor anything. Now brokers, on the other hand .......

In my business (graphics) you can always find someone cheaper than me to do the job (maybe do the job -- there are a lot of flakes in this field). I figure it's the same in real estate, same as dentistry and lawn mowing.

Whenever a client hits me on price and price alone, and feels that should be the deciding factor, I chuckle and -- if I know them well enough -- gently ask, "If price is the only valid consideration, I have to know: What color is your Yugo?"

difficulty, etc. If it's a million dollar property, but takes the same effort as a $100,000 property with the same commission.....well then something stinks.

condo as it does to sell a $100,000 property, BUT it takes a hell of a lot more to sell that million $$ property you talk about. To market that property you wind up paying airfare for prospects, producing multi media presentations, hiring professional grounds keepers, renting furniture if it's vacant, and hiring an interior decorator to renovate it.

There are no 'fixed' conditions in the real estate business and so any fees should be negotiable. But if more resources are put into a million dollar property, then that difference should come out in the wash if the fee is negotiated accordingly. More resources will be rewarded by much higher commission in expensive properties...even at a much lower commission rate than 6%.

negotiable. Hell, I've written an offer that included the special provision that the Mercedes SL in the garage was to convey. Seller got a real laugh out of that, but rejected that provision . . .

Yes it SHOULD all be negotiable...but not when there are efforts to lock in those fees at a certain percentage.

criminal offense. My agitation isn't with enforcing laws against conspiracy to defraud, it's with the attitude of some of the posters who seem to thing this profession is easy.

Said it before and sayin' it again.

I am paid handsomely for what I do but I work God damn hard at it and earn every fucking penny.

But if you are truly happy and at peace with your own work and life then there is no need to become defensive. These posters are responding from their own experiences....equally valid.

defamed and you just roll over and take it? Methinks not.

my husband is the most honest and ethical man I know. He deals openly and honestly with all his customers whether buyers or sellers.

Yes there are corrupt and dishonest people in the real estate business. but i've got news for you--these types of people are in all businesses.

the real estate industry is very heavily regulated in florida and it is hard to get away with any type of fraud on the part of realtors.
they work hard to keep the business ethical.

..."realtors" (who are often independent small business people, more or less self-employed although they may have to affiliate with a brokerage in order to do business,) and

..."brokers" (who are sometimes independent small business people, sometimes franchisees, and sometimes Mega-Corporate-Assholes.)

You can betcher sweet a** that if anyone is doing the price-fixing, it ISN'T the realtors. It's the Century 21/ReMax/Coldwell Banker crowd that are yanking half of the commission out of every sale for doing little more than maintaining a database and providing some artwork and signage for advertising purposes, all at healthy fees to the franchisees.

Unfortunately, franchisees get caught in a bind and have to go along with what the Corporate Assholes demand per the terms of their franchise agreements.

Wherever possible, do business with the small co-op brokerages made up of several local independent agents. They may be charging the same commission as the "big boys," but that money is benefitting local people who by-god earn it, not corporate dregs.

helpfully,
Bright

the fee. They are the ones who signed the listing agreement. In Texas we are required by law to recite the law of agency to all clients on the first face-to-face contact. All of the promulgated forms have verbiage explaining that all fees are negotiable. I fail to understand how anyone could miss that fees are negotiable.

I've had any number of people negotiate over my fees. I either win them to my side or we part company friends. I will not refer a fee negotiator to a discount broker even though I would get a referral fee.

Thanks for the pitch for us small guys. It all boils down to people talking to people, not the color of the sign in the yard.

I realize there is work involved, but the sale of your "average" $400K home results in $24,000.00 in brokerage fees. My last place sold in 2 days with an agent and the current place would likely sell quickly too. Even 1.5% is $6K for the agent is too much, considering the relatively small amount of work involved in selling a high-demand home. Other more difficult to sell places should pay more. Of course, I still don't like paying for everyone's refrigerator magnet and endless mailings.

Regardless, the brokerage firm and MLS are making the most money and there is no way their expenses are that high.

right, prepared right and marketed right. That's what a Realtor brings to the market. Miss any one of those and the property will sit on the market for many months. Meanwhile the seller is making payments only a fraction of which goes to equity. Sell it fast a a lower price makes MORE money for the seller that "price it high and come down".

You don't pay a Realtor for his time any more than you pay a dentist for his. If you did you could argue that he should pull your teeth more slowly.

You don't pay an attorney for his time, but for his knowledge. The same for your CPA, your doctor, or any other professional with specialized training and experience.

potential. It wasn't "marketed or prepared" at all. There was a bidding war on the place and it had hardly hit MLS before the offers came in. I knew exactly what that place was worth or I wouldn't have bought it.

I'm in Wicker Park, Chicago these days and if I price it right, the same thing will happen. I shouldn't have to pay the same amount as some schmo who bought in the wrong neighborhood and wants way too much money, when my place instantly sells. I would most certainly expect to pay less if the agent has almost nothing to do, and would expect the same from a dentist. If there isn't a whole lot of work involved, I don't want to pay the guy $5K. I don't just pay someone a high rate simply "because" that person is a dentist.

Again, the subject of this investigation is illegal activities of boycotting and price fixing. If the discount brokers can do basically the same thing for less money (assuming no illegal activities by other agents/brokers), so can you all.

Just know that if he/she rolls on their customary fee they'll probably roll on negotiations with your buyer. If you think that's a good sign, well . . .

If you happen to be in a "hot" market, good for you. I can tell you that not all markets are like yours. If you happen to be the one in 8 that can complete the transaction without being sued or screwed, good for you.

The issue of conspiracy to defraud is a whole different ball of wax. That has always been in effect and should be prosecuted to the fullest extent of the law. I don't want people in my industry to be-smudge me with illegal behavior.

However, I take high umbrage at someone who has not a fucking clue about my industry saying that I am not worth every God Damn penny I get paid. If you don't like my fees, take a hike. I don't need to beg for business from those who think me somehow beneath them. I've fired clients for less.

work with a FSBO. I'm licensed by the state and have expertise that a lay person presumably does not. If I give any advice whatsoever to the FSBO my buyer can sue me, if I with hold all advice from the seller, which I am required by law to do, the seller can sue me for taking unfair advantage.

I have to contribute to a fund that will pay a claimant up to $50,000 if I misrepresent myself or a property. Then I've got to re-pay the fund AND I've probably lost my license in the process. So now I've got a $50,000 judgment against me and no way to make a living.

Yeah, this profession is sooooooo sweet and easy.

If you are selling, your agent is incentivized to get the sale, not the most for the sale. If buying, your agent is incentivized to get you to pay more.

In IL, any attorney can become a broker by taking the test to be a broker. Normally, it takes a bunch of classes and 2 years or so as an agent to be a broker. Many attorneys become brokers just to save 3% when buying a house. On a $800,000 house that is a savings of $24,000 for a few hours of study. (BTW, any reasonably intelligent high school freshman could pass the test with about 12 hours of study.)

As an agent in an agency relationship I am required by law to provide specific fiduciary duties. I am required by law to explain those duties to my clients. Should I fail in any of those duties I am liable to any number of punitive actions.

Actual case history: Buyer's agent makes the offhand remark in front of the seller that there may be foundation issues. Sale falls through. Seller has home inspected and finds no foundation issues. Seller sues agent and agent's broker. Goes all the way to the Texas Supreme Court. Seller is awarded the sales price of the house plus treble damages. That's $250,000 plus $750,000.

Actual case history: Listing agent rounds off square footage of home from 1,575 to 1,600. Buyer has house measured and finds the 25 foot shortage. Settlement on that one was the sales price of the house.

Actual case history: Buyer's agent bought a car from the seller 3 years in the past. Buyer finds out and claims an undisclosed relationship with seller. Settlement on that one was more than the price of the property.

they had E&O Insurance.

I'm a Certified Residential Appraiser -- have been for 18 years -- and the most important thing I remember from my first day of training was that there's an incredible amount of potential liability. I am scrupulous, but there's always the possibility of some suit-happy person deciding to take me to court for something that was inadvertently omitted, or even for a typo that wasn't caught.

The present environment is so litigious!

As for Real Estate Brokers -- I never wanted to sell Real Estate. The income might be higher, but it takes nerves of steel and the ability to handle enormous amounts of stress. You can work your tail off for six months on a deal and lose it at the last minute.

Had to get involved in the financing end of things, had to work with a FSBO which scared shit out of me, and on the day of closing--the seller had already closed and was packing the furniture--the buyer looked at the loan application and had a panic attack. Got up and walked out.

Then I had to call the seller and explain . . .

study.

I will. I am buying a new place in August/September. I will study no more than 12 hours. And I will pass.

I live in Illinois and I will pass their test.

18 semester hours or 180 classroom hours to qualify to take the test plus 30 classroom hours for the first two years to maintain the license and 15 classroom hours a year after that.

I hope you do take the test. It will be a humbling experience. Only one in ten pass the test the first time even after the classwork.

And yes, there are trick questions.

No need for classroom work in IL for jds.

So instead of taking the required courses you took, what, 6 years of coursework plus being a Jr associate (main reason nobody in my family is a JD)? Jr associate status and residency for MDs is nothing less than hazing. Punishment clear and simple. "I did it and if you want in the club you have to do it too . . ." Hats off to anyone with the stamina to finish that.

If that's an indication of what it takes to "study for 12 hours" and pass the exam I think maybe the "average" high school grad is a bit behind the curve, don't you?

I still think, even with your JD, that 12 hours study is optimistic. It's a specialized area like whatever your specialty is and there are trick questions here, really devious stuff designed to weed out the weak.

Of course maybe Il is wimpy state and that's why Realtors there are held at such a low esteem. I doubt it.

added:

BTW my wife has been in the legal profession for 35 years (which is why I'm so adamant about taking legal action against those who screws up) and is currently employed for the largest real estate firm in the US. She is routinely assigned baby lawyers to train--bit of an insult when they make more than she does and she has to keep them from getting into trouble. This firm is not a brokerage but is in management, financing, manufacturing, residential, commercial and raw materials. If it has to do with residential or commercial real estate, this firm does it.

And guess what. JDs get sued and screwed too just like Realtors. By the owners of manufactured housing. Happens every day. It's a specialized area and 12 hours is just enough information to get someone in real trouble. Good luck and just know that ego can be hard to swallow. Give it more than a few hours and you'll be well served. Buy the texts for the specialized courses--contract law won't be a problem but standard practices may be a bit more involved depending on your established specialty.

Real estate is the most emotional monetary transaction out there, on level with divorce or child custody. Forewarned is forearmed.

That's all. I hate 'em.

Why can't the realtor be paid an hourly fee, plus any expenses, just like the attorney? It doesn't make any sense to me that the realtor's commission is a percentage of the sale price. Say you have two similar houses: house A is priced at $300,000 and house B at $400,000 because house B is in a better school district and has a nicer view. Why should the realtor fee be 33% higher for house B than for house A (which is the case with a percentage commission)? If anything it would be easier to sell house B than house A.

edited for grammer

your agent suggests. Very few sellers will do that. We as agents cannot set the sales price, we can only present CMA and suggest. We as agents cannot demand that the seller re-paint the living room to get rid of the fire engine red we can only suggest and damn subtly at that.

If you wanted to let me tell you exactly how to sell the property and spent the money I told you to prepare it, priced it the way I told you to, spent your own money advertising it, and paid my MLS, CSS and a portion of my professional dues I would negotiate an hourly rate. You up for that?

That would be sweet. I get paid wether your house sells or not. I don't take phone calls at 10:00PM with questions about why it hasn't sold. My professional rate would only be about $75 an hour portal to portal.

Oh, but then I'd be a limited service realtor and you'd be a FSBO.

6% commission is $60,000.
Say the advertising costs $2,000 and the MLS/CSS etc. is another $2,000. Let's add $6,000 for miscellaneous expenses. That leaves $50,000. That is 500 hours of work assuming your hourly rate is $100 per hour, which seems like a lot of hours.

While it may be true that realtors are fairly compensated in general, it seems that the 6% commission system means that sellers of more expensive houses are subsidizing sellers of cheaper properties. Here is another example. A couple of years ago I rented out a condo with a realtor's help-- she listed it, met me there, suggested improvements, took prospective renters there, the whole deal-- and her commission was the grand total of 1 months rent, or $2100! I actually felt very guilty that she was doing pretty much the same amount of work as if she was selling it, and getting a fraction of the commission. So when I sold the condo a few months ago, I made sure to give her the listing, so she got her seller's commission on the $350,000 sale.

In general my experience with realtors has been excellent, and I do not really think they are overpaid-- I have some experience of the vastly inferior service in the UK (where the standard commission is 2%). It's just that the percentage of sale price system does not really seem logical to me.

and i fully intend to try selling myself, before taking it to a realtor-
it's a 2-flat(income property) in a desirable neighborhood. we bought it for $130,000 9 years ago, and it has more than tripled in value since then. using a realtor at 6% could cost me $25,000 or more.

negotiable. Look around and you'll find someone to park it on the MLS and walk away for a fixed one time fee. And it will sit there. And sit there. Unless you price it far enough below the market to attract attention.

Do that and you're probably better off paying a Realtor and not worrying about credit qualification and having strangers wandering through your home.

I seldom show homes until the buyer is qualified to buy. Wastes my time, the seller's time and I'm not a taxi service.

Oh, and realize that if your Realtor compromises on his customary fee, he will probably cave on the negotiations with the seller as well. Ask for a wimp, get a wimp . . .

and more. Have had most of those experiences.

of circumstance?

I would expect a smart realtor to take a lesser fee in some circumstances, and would consider him foolish or in a noncompetitive market not to.

of myself and the costs involved in providing that service. If I can't swing a potential client to my side, we part company. I do not discount my fees because I do not reduce my services.

If a prospect doesn't want my level of service that's their choice and they can interview another Realtor.

circumstance...ie, your costs, type of property, etc.?

circumstance...ie, your costs, type of property, etc.?

then being a "wimp" would not be a problem.

There are studies that prove that an agent is working against their principles in real estate transactions.

especially not income property. I'm 44 and retired due to a physical condition- but I'm confident that i can handle the job.
we will however, have at least two different realtors come in for a market appraisal once we're almost ready to go.

This is one of the few places where you actually can negotiate a lower rate due to high housing demand. There is intense competition in Chicago between realtors, thus there are MANY discount brokers.

business is negotiable. If you are the one in 8 who can make a deal work without being sued or screwed, good for you. It does happen and I know it.

Right now both coasts are on fire (except FLA which the last hurricane season cooled a little). Put $5k into a kitchen remake and Chicago will reap a $10k increase in sales price. Do that in Dallas and you're more likely to get an offer at the original listing price.

I've got clients in California interested in moving here and living on the proceeds of their home sale for a year or more. Kids moved into the house across from me. Paid cash for it and lived without jobs for 4 months before selling it at a loss and paying cash for a much bigger place (4/2.5/2 3000 sq ft) all on the proceeds of an 800 sq ft condo in LA.

Like I said, if you can pull it off, good for you. I don't begrudge you that. Just don't begrudge me what I work so hard for.

Actual email, used with permission but with identity protection because of world wide distribution.

-Apparently-To: XXXXXXX@swbell.net via 206.190.37.106; Sat, 19 Mar 2005 07:02:51 -0800
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Reply-To: "Eddie PXXXXXXes" <epallanes@XXXXXXX.com>
From: "Eddie PXXXXXes" <epallanes@XXXXXXX.com>
To: "Andy SXXXXXX" <sXXXXXX@swbell.net>
Subject: Sale of Home
Date: Sat, 19 Mar 2005 08:02:35 -0700
X-Mailer: Microsoft Outlook Express 6.00.2900.2180

Andy,

I just wanted to send you a note to thank you for all your hard work in getting our property at 9062 XXXXXX Trail sold.

We listed our house on a for sale by owner web site that also posted the house on MLS. The house was listed for over four months without ONE single phone call. We were very frustrated.

After we talked to you and got everything set up, we had a contract on the house in less than a month. I realize now how much of a difference it makes to work with a real estate professional.

I would highly recommend your services to anyone who needs to sell a property. You do all the little things. You always stayed in contact with me to let me know the status of the entire sale process, all the way up to closing.

I wish you the best of luck in the future. I know you will have continued success.

Signed,

Edward PXXXXXes
Fort Worth, TX

Median price in my county--more than $550K LAST year, and still rising in the double digit %s, for a house of less than 2000 square feet, needing work, and with few amenities.

No salesperson & brokerage deserve $20000 or more (which is only their half) for a few hours of work and little expense for advertising etc., especially if collusion and anti-competitive tactics are the way they are getting them.

I think higher fees are justified where properties sell more slowly and for lower prices.

However with all the discussion of discount brokerages here how the hell can anyone claim conspiracy to commit fraud?

My fees vary with any number of issues. If the seller expects me to market a distressed property the fees go up. If the seller is willing to take my advice and I expect the property to move quickly the fees go down. I don't give unless I get.

But figure this, if I accept a listing at my customary fee I will pay to put it on the MLS, I will pay the Centralized Showing service to market it, I will mail 200 postcards to the immediate area announcing the listing, I will post the listing on any number of for fee websites and I will advertise it in various print media. If it doesn't sell, I'm SOL after my expenses.

Who the hell are you to tell me what a willing seller and a willing agent are to agree to? Don't like my fees, take a hike. Go FSBO.

to mine. I did not accuse you of any wrongdoing.

Try reading Robert Bruss's weekly column if you want to know more about refusals of some agents to show properties listed by "discount" brokers.

criminal by dent of my profession. All in this thread.

That said, if the negotiated fee is 20,000 or 90,0000 it is negotiated and your view has no validity. To make a blanket statement that "no broker is worth . . ." is a bit insulting. You have no way of knowing what I'm worth to any transaction.

The originating post was about investigation of fraud and conspiracy. Every post I've made has been in response to "yeah, lets get them greedy fucker who don't do any thing to earn their money . . ."

If I misinterpreted your intent, again I apologize.

.... the MARKETPLACE should decide what you are worth, not a cabal of price fixers.

If some companies want to charge less and probably hence provide a lower level of service, that should be available to those willing to take the risk.

There are simple laws against restraint of trade and price fixing and if they are being broken then consequences should follow.

In fact I applaud the full prosecution of any wrong doing in my profession.

My issues are with the posters here who take the attitude that anybody can do this job and it's sinful for me to set my fees where I do.

If someone has the skills, time and intestinal fortitude to market their own home, deal with unqualified buyers, have strangers call them at night and all that goes with the emotional roller coaster of home selling more power to ya'.

My issues are with those who make blanket statements that Realtors don't earn their commissions and that we are somehow less worthy by dent of our profession when they don't have an effin' clue of what our expenses and responsibilities are.

.... then we're in violent agreement.

I've looked into the RE business before and as far as I can tell, for the most part Realtors earn their living. But all wages/remuneration/prices are under pressure.

The RE industry will have to conform like everyone else has, to the free market. At least you don't have to compete with people on the other side of the world, so having a competitive system of pricing in the RE sales business shouldn't be all that catastrophic.

and my post, and try not to look for insults where none have been offered. It's not much of an apology to say in a sentence later "your view has no validity."

Let me try to clarify. I understand that you are feeling attacked. But my post did not attack you. Unfortunately, you selectively omitted some key words that I wrote.

It would also be nice if you could tell someone you disagree with what they've said (once you have clarified in your own mind what they've actually said and not what you've read into it or what you have combined with your perceptions other people's views) rather than that their view has no validity. As someone who has sold several properties and has done tons of reading on real estate over many years, I happen to think I have basis for my opinion, just as you have a basis for yours.

If you are a flamin lib, I would bet that you have some views on executive pay, for example, that you can feel free to express here. But I didn't go nearly as far as you or others might go on executive pay--even though they might have had no experience with what CEOs do in big companies. I said nothing about Realtors in general being overpaid. I simply said that in the specific conditions I described, a commission of $40000 plus (to be divided) to sell a very modest house in a very hot market within a week is too much. And as some other posters have pointed out, this isn't the result of the "market" and the "anything is negotiable" argument breaks down, when the market forces are being interfered with by agents who refuse to show properties if the seller isn't offering the full 6%. That is what the article focuses on, that is consistent with many sellers' experience here, and that is consistent with many columns Robert Bruss and others have written (check out his website). If buyers' agents won't show my house if they don't get their full 3%, then I have no choice but to offer the full 6% through my agent. That is not "market forces" and I have no freedom to negotiate. Maybe those conditions aren't present where you are, but they are here, and apparently elsewhere, so that's why the Feds are on the trail.

Here's a column where Robert Bruss describes the problem with agents not showing properties with < standard commissions.

http://www.chicagotribune.com/classified/realestate/chi-0504150017apr15,0,2289179.story

but it's past 6:30 PM here and I've got to begin my phone followup with the eight clients I have actively working as well as beginning the conversion of prospects into clients for future transactions.

I begin my day at 9:00 AM and try to have all my followup on loans, listings that need to be shown, showing feedback on my listings and hand holding before 9:00 PM. With a little luck I won't get a phone call after 10:00 PM with a question.

No, I'm not doing a pity party here, I knew the business would be this way when I got into it. I've become a father, a priest, a marriage councilor, baby sitter and even a landscaper if need be. Most of the time it's just business. But every now and then, when I deliver the keys to a young family of four and watch them unlock the door to their first home or when I close on the low income grant that allows a single parent to move out of a slum or call someone and tell them that the transaction is going through and hear the shouting and joy on the phone it's more than just a job.

at 6:00 A.M. He works seven days a week to earn his money. Just like you he gets a thrill when he helps someone get their first home or the home of their dreams.

Just like you he will negotiate his fees based on the buyer's circumstances, etc.

His honesty and hard work have won him many repeat customers. This morning the phone rang a 7:00 A.M. It was a former customer. He helped them buy a home 7 yrs ago. They called him this morning to list the home to sell and buy another.

I think that is incredible. It is a reflection as I said earlier of an incredibly honest, ethical man who works hard at his job and always tries to do his best for his client.

When I sold my last house I asked around and managed to snag one of the best guys in the area. He arrives on Sunday in a suit (I'm at my house in T-Shirt, shorts, bare feet). He looks through the place and says:

"We'll rip out the front lawn and put in sod and sprinklers, take out your gardens and do a quickie landscape. Ditto in the back yard. You just painted the outside ... looks good. I want to repaint the interior, refinish all the hardwood floors, replace the carpet in the living room, and bring in a professional cleaning service. My guess is that it will cost $X"

"Damn", says I, "How long will that take, and when will you show it?"

"We'll get it done by Friday and show it on the weekend."

He did.

He showed it.

We got full price.

The guy kicked ass.

I just went through Realtor hell with non-qualified buyers, gazillions of lookie-loos, and no respect for privacy. They are scum, without people skills or the good sense to use breath mints and not wear cheap perfume.

They should all be working at Wal-Mart.:mad:

is pick up the phone and call the broker or the office manager and say you aren't satisfied. In less than 24 hours you'll have the best agent in the office working for you.

Don't blame the realtor for your lack of action.

worthless post.

I've rented it to a retired couple. Your assumption, is of course, wrong. The Weichert Way sucks, and until the contract expires, you're screwed. FYI, I called 3 times and wrote 2 certified letters to the Regional VP to no avail. Their only concern is to pound a sale with no regard for the seller. And if you think for one second my impression is from them alone, I have a pile of mulit-listing bottom feeder's cards I can mail you.:grr::grr::grr::grr:

with written notice.

You may still have recourse. Just call the local Board of Realtors and ask who to speak to about filing a complaint. It costs you nothing and in Texas can net you up to $50,000 and the agent's and broker's license.

Don't blame the Real Estate Profession for your inaction.

rather than folks who are *really* engaging in anti-trust behavior.

I posted way earlier in this thread that I think realtors, by and large, earn their money. Can we point to instances where it may seen like robbery? Probably. There are always exceptions. But I want to talk about real life and what an average realtor has to deal with, from the perspective of the client of a realtor. (The issue of collusion/corruption among brokers - not to be confused with realtors - aside.)

Sparkly and I are in the process of buying houses for our two sons. This is not a totally altruistic undertaking. Both know that at the end of five years we want our investment back ... and a healthy profit, thankyouverymuch. They get to share in the appreciation of the property, since they're both being asked to pay the mortgage and do renovation work. At the end, they can buy us out in accordance with an agreed-to formula, or we sell and split the proceeds, again at an agreed-to formula.

So that's the background. We're in the Baltimore area. It is one of the "hot" areas with (sometimes alarmingly high) double digit annual home price increases the rule. (See another thread to discuss the real estate bubble.)

So we're looking for "distressed" houses as an investment. So is everyone else. Its real competitive out there and you have to do a shitload of running and offering, and looking, and begging to score a good property. And you're competing with developers, institutionalized buyers, investors, card sharks, miscreants, thieves, and emotional adult kids selling the family castle (an 11' wide row house that hasn't seen repair since Dad went to his reward in 1973) now that Mom's moved to her reward. This means lots of shoe leather, lots of car tires, lots of gas, lots of time. Our realtor is under contract to us as a buyer's agent. Dual agency is allowed to happen if it comes up.

The first house took us well over four months of looking to finally get. In that four months we easily looked at a hundred or more properties. We made a total of nine offers. On eight we were outbid (even with a $20K escalator in the fucking contract!). In the end we bought a place for the princely sum of $79,900. Yeah ... 80 thousand measly frikkin' bux.

Do the math ...... $80K times 6% is what? $4800. Divide by two. $2400 to each of the seller's agent and our agent. Now cut that up ...... $1200 to the broker (you can tell the broker ... they're the one with that fin on their back and the five rows of replaceable teeth). That leaves $1200 for our agent ..... except ... our "agent" is really a two person team. Two delightful, professional, caring, hard working women who drove all over the fucking planet for four months - at their OWN expense - in their OWN cars - into overpriced "palaces" and functioning crack houses - day and night - hot weather - shitty, scary neighborhoods that we had thought might be safe but weren't .....on their OWN time ...... for the privilege of getting a check for $600.

Yup .... overpaid is what they are.

And now we're doing it for the second time. And they're right there with us again. God bless these two. They're really wonderful. So far, we've been hunting more than 6 months. Prices are up, but our budget isn't. Two offers rejected ... so far. One is on the table as I write this. That involved, as have all the others offers we made, our agent being on the phone with us till the wee hours, guiding us through the contract .... hand holding, advising, but only to the limit of their ability, legally, to do so ...... We'll see .......

When my mother died a few years ago, I was named executor. She was in another state. Her house was in great shape, but on a busy street. It was pristine clean, but dated. It had 3 bedrooms where the community was mostly four bedrooms. She had asked me, "if anything happens to me, please use Kenny to sell the house." Kenny and I grew up together and have known each other since we were 4 years old. Kenny's now a successful real estate agent (does not want to be a broker). We got an offer above our asking in less than 24 hours. The sale closed in 21 days and we had our money. Did Kenny get off easy? Seems so. I mean, he never even showed the place himself. What did he do? Push some paper?

Nope ..... Kenny, it seems, had to work his ass off. The buyer, it turns out, didn't qualify for the loan (this was an honest error on the buyer agent's part ... complicated, but we all knew the buyer was borderline ... honest and able to pay the mortgage ... but borderline). Kenny and the other agent worked to find a lender to carry her. They were successful in that. (I guess that kind of cooperation is legal ... right? I dunno.) Anyway ... so they get her qualified .......

Then, it seems, the house won't appraise for the offer. It appraised for the asking, but not for the offer. Get a new appraiser. Schmooze the new appraiser. "Re-sell" the house to him. For what its worth, the buyer's agent and Kenny split the cost of the second appraisal. From that handsome commission they were gunna get.

Sure, Kenny was a friend. But Kenny also worked for me. He was professional. He was honest. He helped us price the house fairly. He got results. That's what he gets paid for. It isn't about the actual time. It is about the results.

He was also a pall bearer.

So no, I don't fault a realtor at all. Not one fucking bit.

out for the public. Try Maryland - 7% in some areas to 4 1/2 - 5% in others. VA & MD are the worse in the nation and if one wonders why, most lobbyist and rethuglicans call it their home-base of the have-mores.

Guess they need somewhere to hang their greedy hats while getting' rich in DC.

All the same, good for Oklahoma and hats off to Univ of Cincinnati.

the price. Negotiate with your Realtor. If they deem their time is spent better you'll not get one to represent you. Then you can do what other's do, go FSBO.

If you can bring evidence that there is discussion between brokers and Realtors to establish a set "standard" fee sue the bastards.