It seems to have them thinking, "How could this be?"
Notice the comment about the quality of agents and who they represent? While they talk about inexperienced agents I wonder about experienced agents who focus on volume on the sell side.
The comments about buyers who pay too much overlooks the fact that the analysis of FSBO sales took into account Realtor commission. While the seller had a better NET the buyer probably got a discount too.
I didn't read the study but a FSBO seller may have built into the asking price a represented buyer commission. If the buyer didn't have to pay a buyer commission they had more $ to negotiate with.
Agreed. My plan all along when I go to sell is to pay a flat flee to list on the MLS and hire someone I know has to jump through some hoops -an attorney.
The only worry is that the Realtor's will boycott the listing, but I think my house is cute, cheap and distinctive enough that it will sell regardless.
Check out the last issue of the Journal of Real Estate Finance and Economics, 2007, 35(1).
Here's an abstract of a great article:
This study examines the traditional compensation model for real estate brokers under which both the listing and buyer brokers are paid by the seller based on a percentage of the property sales price. We argue that this model has not evolved to reflect contemporary legal agency relationships and technology-driven information availability. It therefore creates substantial transactional inefficiencies for buyers and sellers at both the matching and bargaining stages of a transaction. While there is evidence that market forces are pushing for a change in the status quo, there is also evidence that the brokerage industry is resisting this change by pursuing anti-competitive policies and laws. We explore the economics of the current and alternative compensation structures and suggest policy implications regarding anti-competitive behavior in the brokerage industry.
Comments
For me, I want them to keep talking. I am learning the tricks of the trade.
What Madison has going for it is a FSBO culture and a strong FSBO internet listing service. I wonder if a lot of FSBO sellers use Zillow too?
Notice the comment about the quality of agents and who they represent? While they talk about inexperienced agents I wonder about experienced agents who focus on volume on the sell side.
The comments about buyers who pay too much overlooks the fact that the analysis of FSBO sales took into account Realtor commission. While the seller had a better NET the buyer probably got a discount too.
I didn't read the study but a FSBO seller may have built into the asking price a represented buyer commission. If the buyer didn't have to pay a buyer commission they had more $ to negotiate with.
The only worry is that the Realtor's will boycott the listing, but I think my house is cute, cheap and distinctive enough that it will sell regardless.
Check out the last issue of the Journal of Real Estate Finance and Economics, 2007, 35(1).
Here's an abstract of a great article:
This study examines the traditional compensation model for real estate brokers under which both the listing and buyer brokers are paid by the seller based on a percentage of the property sales price. We argue that this model has not evolved to reflect contemporary legal agency relationships and technology-driven information availability. It therefore creates substantial transactional inefficiencies for buyers and sellers at both the matching and bargaining stages of a transaction. While there is evidence that market forces are pushing for a change in the status quo, there is also evidence that the brokerage industry is resisting this change by pursuing anti-competitive policies and laws. We explore the economics of the current and alternative compensation structures and suggest policy implications regarding anti-competitive behavior in the brokerage industry.
No shit, sherlock.