Cutting the Commissions; Most Real-Estate Agents Still Want a 6 Percent Cut. but a Few Clever Brokers Have Figured out How to Sell Homes Cheaper, by Setting Up Web Offices

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Byline: Jane Bryant Quinn (Reporter Associate: Temma Ehrenfeld)

Will the Internet finally smash the real-estate cartel? Home prices have risen 40 percent in the past five years, yet most real-estate brokers still quote sales commissions at about 6 percent (some negotiate, if asked). The industry is using its political clout to hold down price-cutting. But consumers could win, now that prices are on the Web.

Brokers do business through the computerized Multiple Listing Service (MLS), where firms list the houses they have for sale. They work hard for their customers and know their neighborhoods. The trouble is, they trade with each other politely, at the cartel price. So a few clever (impolite!) brokers figured out how to sell homes cheaper by setting up Internet offices and letting you peep at MLS listings on your own. (These listings also go onto, but with less information.) A thousand flowers are starting to bloom:

Discount real-estate firms . If you're selling your house, a discounter can save you a ton of money. These brokers offer all the usual services and expertise. But instead of charging you 6 percent of the sales price, they take 4 percent or even 3 percent. That's a saving of $7,000 to $10,500 on a $350,000 house--a no-brainer, I'd say.

The granddaddy of the discounters is, in 10 states and the District of Columbia. Zip's participating local brokers charge about 1 percent less than the going rate. To attract home buyers to its site, Zip offers to rebate 20 percent of its commission. If you buy a $350,000 house, you'd get a $2,100 thank-you check.

The discounter Foxtons operates in New Jersey, southern Connecticut and New York, charging home sellers 3 percent. Brokers from other firms receive just 1 percent for finding a buyer. In pre-Internet days, they might have blackballed Foxtons right out of business. No more. If their clients find a Foxtons house they like on, the broker can't escape showing it. CEO Van Davis says that outside brokers are accounting for half his sales.

You can find discounters almost everywhere. Just enter the name of your city or county into a Web search engine, along with "real-estate broker," then "low commission," "3% commission" or "discount."

FSBO sites (pronounced "fiz-bo")--"for sale by owner." People selling their own homes account for roughly 15 to 20 percent of sales. You'll find pots of free how-to information on FSBO Web sites. For a fee, you can buy a FOR SALE sign, an 800-number service for taking calls and a listing on the FSBO's site, with pictures of your home. You can even buy a listing on the MLS, so shoppers everywhere can find you. …