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

Newsweek, July 18, 2005 | Go to article overview

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


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 Realtor.com, 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 ZipRealty.com, 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 Realtor.com, 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. …

The rest of this article is only available to active members of Questia

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

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
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    Buy instant access to save your work.

    Already a member? Log in now.

    Oops!

    An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.