I wonder...or, let me tell you what I really think...
October 10, 2006
I've taken a break from Blogging the last several days (yes, it is hard work and difficult to constantly find something worthwhile to say). I continue to read my favorites like Jim and Dustin and The Tomato (newest favorite) and Ardell (female WonderBlogger) and sellsius and Marlo and ... I wonder where they all get the inspiration to spew forth mostly meaningful rants, opinions and advice. I read the Real Estate Carnival articles and learn sometimes. Sometimes not. I really wonder about the Blog challenges. 101 articles posted in 24 hours? Fun? Maybe. Sorry, not interested. It will take me 101 days to read them all. I have trouble writing one a day.
I wonder why there is so much debate about Zillow (home valuations), Trulia (cool home searches), Redfin (a different brokerage business model) and the like. They don't seem like that big of deal to me. Novel, interesting and tiring. This is a competitive industry. The last time I looked it was still a relationship business. I have a great relationship with both of my computers and I like to experiment and try out new and cool tools. And, I can get more information than I can humanly digest. I prefer the human kind of relationships that rely on experience and wisdom to interpret information and provide sound advice. Personal trust is in there too. Big time.In the local news, I wonder why our politicians can't get it right about our transportation needs. We're choking in traffic and they worry about their political hides. I wonder why County officials (also of the political persuasion) can't come to agreement on growth controls. We're choking some more. At the national level I wonder why there seems to be a void of common sense on very basic issues concerning our industry, consumer choice and protecting property rights from stupid, ridiculous, selfish and outrageous eminent domain condemnations not for public use but, (drum roll) for developers!
Speaking of developers, I wonder why they clear cut woods to put 800 homes on 200 acres. Don't they realize wooded lots bring a premium? I like looking at new homes that have some old trees left behind. Besides, a few trees are good for the environment and some are really cool for kids to climb. I climbed trees when I was a kid. I even had a tree house. I also wonder why a small custom builder would build an 11,000 square foot spec home in a neighborhood where the average size is probably 4,000 square feet (I know, some consider that obscenely big too). What are they thinking? Who is going to buy it? Have they not heard about the principle of regression and progression? Or, how about conformity? Another common sense void not to mention the lack of social responsibility at some level to a community. And, the county (the one mentioned above) approved it. Go figure.
I wonder why our standard real estate purchase contract has ballooned to 10 pages of legalistic bull $&^#@$ with many more potential add-on addendum. Is it protecting consumers or are we just covering our own back side? I suspect it is more back side. I see another class in my future.
I wonder about the real estate commission debate. Inman news is offering a big book about commissions for nearly $700 ($549 for subscribers). I don't need to spend that kind of money to figure out that the whole commission structure has out lasted its understanding (actually misunderstood). Full service, limited service, half service, no service. What's wrong with just getting paid for your efforts (time) and expenses? Now that's a novel idea. What's wrong with sharing the financial risk with a client instead of taking all the risk and and charging the risk fee in commissions? Do buyers pay commissions? Yes, over 30 years in their mortgage. Real estate is a personal service business just like CPAs, Lawyers and consultants. I think I'll publish a series of articles on commissions as I have given it much thought, experimented with different models and learned a lot about what works and what doesn't and what consumers like and don't. I won't charge a thing for them.
These are a few of the things I wonder about. There are many more things I worry about that we trust our national leaders to deal with effectively. Or do they? I wonder about that too.
Comment on I wonder...or, let me tell you what I really think.... Follow this article is off. More articles like this one filed in: Opinions
Subscribe to eMail Notifications
Enter your email address in the appropriate box below (email never disclosed)Comments
The buyer is the only person that brings money to the settlement table. It's all his/her money and is distributed amongst the different parties involved in the transaction. The buyer/consumer pays for everything. Flat fee commisions will benefit the buyer. Market forces will dictate the yield to the seller. IMHO
![[TypeKey Profile Page]](http://askmerv.choice3realty.com/nav-commenters.gif)
made the following comment on October 11, 2006 11:55 AM
Alby, you make some good points but a flat fee may not be the answer either (they already exist). I'll explain more in future articles.
Merv, I missed you! Hope you had a good break.
I have wondered the same thing about clearcutting lots to build homes. Trees add monetary value to a home (guessing here), as well as intangible aesthetic beauty. They also provide privacy- it amuses me to see McMansions where one could literally reach out the window and touch his neighbor's house. If it were me I'd trade less house for more land- I grew up on 5 acres, most of which was wooded.
Of course, who has time to play in the yard, especially those who leave and return home when it's dark outside?
Stop wondering, start writing about commission structure. It could be the next move of RE in the changing season of business.
Now that was a great post. It made me stop and think about what's really important & it ain't always this blogging thing. Thank you Merv.
Real Estate Commissions should be retired and replaced with a flat fee. Why should an agent (that most pick out of a newspaper ad) get $30,000 if the seller has a $500,000 home and $60,000 if the seller has a $1,000,000 home? Did they do $30,000 more dollars worth of work for the million dollar listing? I don't think so... Sellers having to pay both the commissions for the Buyer and Seller agents is highway robbery. If agents could justify the different sales requirements between a $500k and $1/million dollar property, then I'd be more understanding of the 50% commission increase. But as far as I can tell, million listings end up in the same newspaper, with the same size ad as the $500k listings. Commissions are just a win-fall for agents who happen to win the lottery when the phone rings.
This is why real estate commissions need to be reigned in and replaced with flat fees. $500k or $1/million, the seller will always pay $the_same. Personally, its just a matter of time before some catch-phrase website becomes the equal to the MLS/MRIS system. Then the days of Agents are over. Buyers and Sellers can be paired up online and referred to a nearby closing firm to handle the paperwork. No more agents with their secret monopolistic black books required in the 21st century. The end is near. Allowing sellers to keep a huge chunk of their profits.
Subscribe to: 
Valid CSS and
