Keep Your Paws Off My 6%, You Damn Dirty Realtor!

(Title of the post is a Planet of the Apes reference). I liked this post I found on a housing bubble blog. Real estate is one industry that is in serious need of reform, and I don't doubt that it is coming. Due to technological change, Wall Street didn't manage to hold onto its over-inflated commission structure, and neither will real estate brokering.

excerpt:

"Over the last couple of years, there have been signs that the customers aren't willing to hand over thousands of dollars anymore. Why? One reason is the hot housing market. As prices get higher and higher, agents earn more and more without having to do more."

"In some cases, the consumers are taking matters into their own hands. Last week, Jeff Bailey of the New York Times reported that some good folk in Madison, Wis., have taken it upon themselves to create a thriving for-sale-by-owner website and an alternative listing service. Real estate agents are naturally furious. 'It's a commission-avoidance scheme,' sputtered one who works for Wisconsin's largest real estate broker."

"The phrase itself, 'commission-avoidance scheme,' is revealing. You've heard of mobsters hitting up store owners, but rarely do they have the gall to complain that merchants who go to the police are running a 'protection-money-avoidance scheme.' In the real estate agents' minds, they're not the ones running a scheme. The schemers are the people buying and selling houses to one another. A free market, in other words."