An October 2006 report by the AEI-Brookings Joint Center For Regulatory Studies finds: “real estate broker commissions are strangely unrelated to either the quantity or quality of the service rendered or even to the value provided.” It further concludes that “consumers would benefit most from a fee for service approach – combining flat fees, hourly fees, and bonuses, including percentages of extra value created.”
The United States Department of Justice Anti-Trust Division announced the launch of a new web site in October 2007 to “educate consumers and policymakers about the potential benefits that competition can bring to consumers of real estate brokerage services and the barriers that inhibit that competition.”
Most consumers want to make as much money as possible on the sale of their home and spend no more than necessary when purchasing a home. In many cases, the standard broker’s commission can offset a portion of the equity value that has been building up in a seller’s home or push the price of a home beyond a buyer’s purchasing power.
Most industries today are consumer oriented, and designed to provide what the consumer demands: a reasonable value for service or goods provided. For instance, your tax preparer isn’t compensated based on your net income. Discount stock brokerages have proliferated and thrive on flat fee trades, not a percentage of the trade dollar amount. We think real estate should serve the homeowner in the same way.
Want to learn about using flat fee realtor services when selling your home?
Buying a home and want to only pay a flat fee?