May 13, 2007

Oh, man, this won't be fun at NAR HQ. 60 Minutes report tonight "6 Percent". Goodbye realtor profession. Goodbye 6%.

Someone please record this in the US and post to youtube or dailymotion and I'll post here.


You can watch Leslie Stahl's reporter's notebook now - I guess the report is going to be on the 6 percenters vs. the discount and online brokers (like Redfin)

"The commission is a fraction of what the traditional agent charges"

Lots of blah blah blah coming from the six percenters, and probably the NAR spinmeisters.

Now I wish 60 minutes would do a show on the housing crash, mortgage brokers, the corrupted Congress, mortgage fraud, bogus appraisals, CDO's and the rest of the mess. But hey, it's a start - the six percenters and the laughably incompetent NAR are the low hanging fruit.


Realtors’ sacrosanct commission rate of 6 percent may be in jeopardy due to emerging online competition from Internet real estate sellers and buyers. Lesley Stahl reports

22 comments:

FDR said...

Here's what the NAR is sending to it's members as far as what to expect:

http://tinyurl.com/2qlm2j

Anonymous said...

The NAR has probably dispatched their minions of lobbyists to DC in an effort to "regulate" online brokers. Afterall, if you can't stop 'em, then sick the cops on 'em.

Paul E. Math said...

Based on the NAR's statement, it doesn't look like Lesley Stahl is going to spend much time addressing the role Realtors(tm) had in inflating the housing bubble or how much BS their whole profession really is. Which is unfortunate.

I'd also like to see some detail around the anti-trust suit but I guess that's ended up on the cutting room floor as well.

The NAR claims to have spent an entire year 'educating' CBS producers about the value realtors provide - that would seem to limit the balance and objectivity of the piece. If I were doing a piece on the KKK, I don't think that it would be 'fair and balanced' to spend a year letting them 'educate' me about the good work they do.

The potential of this program is great but I'm skeptical as to whether it will fulfill its promise.

Mark in San Diego said...

Keith,

Yahoo.com has an agreement with 60 minutes, and usually post segments on its news page later today (Sunday). Looking forward to this one myself. . .note - I have been reading this blog for about a year and a half (I think about that), and EVERYTHING you/we have predicted has come true - just a little slower than expected. . .now housing is starting to fall, and when it hits the tipping point - kaboom!

Todd Tarson said...

I'll be in DC this week for the Mid-Year conference and I have the talking points.

Hmm... lets see... Where is the 6% protection thingy??

I see FHA reforms, comprehensive natural disaster policy, small business health plans, responsible lending (a bit late I might add), national policy against mixing banking and commerce... wow, looks like plenty on the agenda when we speak to our senators and congress-critters... but no 6% commission protection.

Maybe next year??

Nobody has to pay 6% in real estate fees to list a home.

Natural Eyebrows said...

HPer's make the classic mistake of arrogating their own level of sophistication to the population at large. Just because YOU think YOU know enough, and think YOU are sufficiently skilled in negotiating technique to do your home purchase or home sale unassisted, you think everyone else is. This belief is not consistent with the disparaging terms HPer's use for the poor schmoes that now find themselves upside down in homes bought during the bubble phase. The number of real estate agents will decline as sales volume declines. That's the market at work. The real estate brokerage industry will continue to evolve. I am not convinced it is going away.

The discount brokers have been around for more than ten years. They have a piece of the market, but they sure haven't taken over. As buyers become harder to find, and especially if mortgage money dries up, sellers, particularly absentee owners, will need competent agents with well developed deal-making skills. You guys think it's easy. It IS easy when anybody with a pulse can get a mortgage. If Bernanke turns out to be another Paul Volcker it won't be easy any more.

Anonymous said...

Im a big fan of realty companies that do not post address and prices in their ads, only come ons and prices and pictures, and i like getting diddled coming and going???????????????

Anonymous said...

Todd Tarson: "Nobody has to pay 6% in real estate fees to list a home."

That is a talking point. Probably their main one. In fact, it's more of a mantra: There's no set commission. There's no set commission. There's no set commission.

Of course, good luck getting any RE clerk to show your home if you're offering anything less than 3% per side.

Todd Tarson said...

Anonymous said...

That is a talking point. Probably their main one.


Heck... I'll look again. I do have 12 pages of talking points so maybe I missed it.

Nope, still not there.

Of course, good luck getting any RE clerk to show your home if you're offering anything less than 3% per side.

More uninformed paranoid BS, shocking. RE clerks work for you and you hire them on your terms. If they don't like your terms, then don't hire them. If you can't even negotiate terms with someone you are hiring, how are you going to fare in negotiations for buying or selling property??

Anonymous said...

Better yet, lets get rid of the REIC all together .

Lets have the government run a National MLS system in which property is put on this National MLS system for sale .

Realtors can be hired for hourly fees to conduct open houses and other realtors or lawyers can be hired to write up contract offers on listed property . For Sale by owner property can be listed on this National MLS service as well as REO property .

Realtors can be hired for fees to show property to buyers .

Appraisers will be regulated by a gov' agency and they are assigned a appraisal for a refinance or purchase in which the lender/realtor/borrower/seller has no choice . Interested parties can ask for a review appraisal if they think the appraisal was wrong .

What I just said above might come about in some form as it comes out in the wash just how much the REIC/ realtors /lenders/appraisers abused the system .

Anonymous said...

You mean people still pay 6%? Highest I ever paid to sell a house was 4.5%. 6% is negotiable just like anything else.

Anonymous said...

Lets see..median San Fran home price $700k. Is it worth $42,000 to have someone show your CA POS.
I think a rational seller would show it on his own. If priced CORRECTLY, it would sell in a week or two. Let's say even though priced correctly it took two full weekends to sell. $42,000/32hrs=$1312 an hour IN SAVINGS. Not bad work!

Paul E. Math said...

Todd, I was going to respond to you. But then I just watched 60 Minutes. Todd, dude? You're done. Game over.

The best thing you can do for yourself and for buyers, sellers and homeowners is to send your resume to Redfin. Get a real job, guy.

Anonymous said...

I'm no fan of realtors but if they charge 6% and people pay it, so what?. The same people who will negotiate for 3 hours when buying a car to save $200 will throw away $20,000 when selling their house because they think they can't do it themselves. Can't blame the realtor for taking their money when someone so willingly hands it over.

I remember when my parents tried to sell our first house. They used 2 agents and nothing was happening for months. Then they dropped the price 5%, listed FSBO and the very first week they had a buyer. Every other house they sold and bought later on was fsbo and not surprisingly I have done likewise with the 1 house I bought and sold. It's really not hard.

The NAR is not putting a gun to anyone's head to use a realtor. If someone is willing to throw away 6%, let them.

PS: The house in question sold for $82,000 in 1986. Today that house according to zillow is north of $600,0000.

Anonymous said...

Just watched 60 min.

Laughing my a** off. So a realtwhore should get 6% to dress up a house and send out flyers. What am I missing?

I sold my CA home last yr via an internet service. Renting on the east coast for now.

Gee should I hire a GED to guide me through my next purchase?



The NAR

Anonymous said...

Will NAR WIN this time out interesting they Bk a forrunner
of this company... I have done commercial leasing befor Never liked paying (Protection Money )
To the local Realestate assocaiation ( mandatory) I would be interested in selling RE this way flat fee 3K sell 10 homes a month and not get into my car at $3.00 for gas Plus ins ect....sounds fun we will see I think the NAR will loose big since they will be fending off lawsuits ect... you will see dirrect RE On the High end only 1 M plus most of those people do not have the time ...

Congress Realty said...

6%? Anyone ever heard of a flat fee MLS listing for $299?

anonymous wimp said...

BWAAAAAAAAAAAAHAHAHAHAHAHAHAHAHAHAHA!


Dude, Sixty Minutes OWNED the NAR. They made them look like a bunch of greedy morons. And the 'Suzanne' "Realtor" they trotted out to demonstrate how a realtor adds value to the transactions by "de-cluttering and staging" the homes she sells looked like a total greedy moron, too.
As long as the NAR doesn't win in court to keep their monopoly on the MLIS (and even the MLS's days are numbered--thank you Zillow), Realtors as we know them are headed the way of the travel agent.

Anonymous said...

More uninformed paranoid BS, shocking. RE clerks work for you and you hire them on your terms. If they don't like your terms, then don't hire them.

Uninformed? I work in the industry (**ducks**). I see what goes on every day.

You are correct about one thing: you do hire agents on your terms. But most agents will do anything they can to discourage sellers to lowball on the commission. First of all, sellers' agents know that it'll be a tougher sell and will sit on the market longer, meaning more work (gasp!) to get that commission check. Buyers' agents don't want to waste their time and money driving their clients around and showing a bunch of houses that won't maximize their commission. It's the same reason they blackball FSBO listings. Trust me, I hear agents gripe constantly about their "unreasonable" sellers who push for a lower percentage commission. They hate it.

Secondly, and probably most importantly to agents, that commission check they get when the property sells won't be as fat. Why work 10 hours for 1.5% when you could be working those same 10 hours for 3?

I know realtors hate this book because it speaks the cold hard truth, but chapter 2 in Freakonomics spells this out. While it doesn't deal specifically with commission splits, it's the same control-of-information and cost-benefit factors.

Todd Tarson said...

Todd, I was going to respond to you. But then I just watched 60 Minutes. Todd, dude? You're done. Game over.

Game over for me pauly?? Doubt it. What's funny is that you assume I'm a staunch defender of 6% and blah, blah, blah.

The best thing you can do for yourself and for buyers, sellers and homeowners is to send your resume to Redfin. Get a real job, guy.

Please, they don't have real jobs. They call listing brokers and beg them to show the listed home to Redfin's own clients. I charge less than redfin does and I actually do all the work.

Too bad I can't stick around for the inevitable circle jerk.

I'll be in business longer than redfin.

devestment said...
This comment has been removed by the author.
Anonymous said...

A couple of points from a Realtor & Real Estate investor.

People have a tendency to judge harshly people or companies that are well paid and scoff about how easily they make their money. Same is the case with lawyers. Although there is good and bad in every industry, I can say that I, as a realtor and my best friend as an lawyer practice our profesions with honesty and help a lot of people.

There are so many ways to get screwed in a real estate transaction. Finding a buyer is the easiest part of what we do; getting the file to close and protecting our clients is where we earn our money.

Some people are savy enough and are comfortable with the process of engaging in real estate transactions on their own. But MOST people are not and therefor realtors will always have business.

It's ignorant to say that the business of real estate brokerage is over. There is business for everyone. No matter how big Walmart gets, The Gap, Pep Boys, and other more expensive but industry specific companies will have their market. No matter how many jeans Walmart sells cheaper, many people like myself never buy their jeans there.

I can get my legal questions answered in a second online for free; but I still use lawyers for all of my real estate deals.

BTW: Since I started in real estate, people have been saying that the internet was going to ruin the industry, then they said the same when the discounters came along. I can't drive two blocks without seeing a 1% commission sign but I'm still signing clients.