Wednesday, September 28, 2005
Middlemen
Alan Murray wrote an article in the WSJ this week that attributes some of the ‘frothy’ market conditions to realtor commissions. A 5-6% commission requires at least the equivalent to be added on to each sale of the property. With people flipping and moving with such frequency, it’s hard to calculate the exact effect these commissions have had on the overall appreciation rates through out the nation.
We do know this: Americans are over leveraging their home equity to support their spending. I believe that the Fed realizes that many homeowners will not be able to afford to move if prices drop even marginally…. unless the price to move is reduced. That’s where the DOJ investigation comes in to play.
Alan also makes some great points about the value that realtors have lost over the years. I’m sure that they were worth their 6% before the advent of free-flowing data. He also echos our oft used comparisons of realtors to Wall St., travel agencies, and insurance companies.
It’s always nice to see what we’ve been screaming printed where the mainstream can see it.
Rob Steiner
LISTFREE
April 8th, 2006 at 12:03 pm
As housing prices continue to rise, there must be some thing that will help relieve the upward pressure and that is transaction costs. people are slowing starting to realize this.
I’ve sold two homes by owner myself and saved my family of four kids over $23,000. If you would like free advice on how to sell by owner, check out these sites: http://spaces.msn.com/forsalebyownerfsbo/ and www.lawrencefsbo.com.