Continuing the argument for Divorcing the Commissions. The current system exists due to the legacy of sub-agency, where there was no such thing as Buyers’ Agency. While this is currently allowed, the culture of “we’ve always done it this way” is a seemingly immovable force.
One question – how do we change the culture – the culture of the Realtors, lenders, buyers and sellers?
These are a few of the questions that come to mind –
– Would buyers be willing to finance their Realtors’ commissions into the purchase price of the home?
– One argument is that Buyers and sellers have always paid the commissions out of the equity – would Realtors fees go down if this were not the case? (this may be a moot point in today’s market). Greg defeated this argument last month – but how does one distill this argument into a marketable sound bite?
– Are Buyers ready, willing (and able) to pay for Buyers’ Agents’ services even if the transaction does not succeed?
Real estate is perhaps the only profession where the person hired gets paid only in the event of a successful transaction. Drive 500 miles over three weeks, dedicating time and expertise to the clients only to have the transaction fall apart or the buyers not relocate? Are buyers ready to pay for those 19 hours of the Realtors’ time? Right now, I doubt it.
Or while many buyers and some Realtors are unhappy with the status quo, is the alternative (whatever that may be) far less palatable?
What is the alternative?
In order to effect a solution, we must clearly understand the arguments in favor of the the status quo and we must define that solution. What is it?