Among Money's Great Mysteries - Real Estate Commissions
Byline: Burt Constable
Among the many things I don't understand - the appeal of Paris Hilton, the existence of gay Republicans or Cubs manager Dusty Baker's fondness for Neifi Perez - finances still rank at the top.
Money mystifies me. I know it makes the world go around, that the love of it is the root of all evil, and that it doesn't grow on trees - and that's about it.
I can't, for instance, explain why a waitress who calls you "Hon," balances a $5.35 collection of piping hot plates containing eggs, toast, bacon and hash browns, and refills your coffee cup as fast as you can drink it would be thrilled with a $3 tip. But a disinterested waiter who brings you one $9 martini and barely makes the effort to plop a $42 steak-and-potato in front of you is ticked if you leave him anything less than a $10 bill.
Likewise, a real estate agent who might sell an $850,000 house after one day of little effort earns a commission thousands of dollars more than a hard-working agent who might labor for weeks to sell a $140,000 house.
In a nation where more than 2 million people hold real estate licenses and God-only-knows how many are doing cheesy TV commercials for the sell-it-yourself movement, I don't understand how it all works.
Maybe that is because it doesn't.
"I think this industry is really broken," says Realtor Evan Kane, 37, a member of the National Association of Realtors (NAR) and founder of suburban-based Endeavor Realty, one of a newfangled breed that has broken away from the brick-and-mortar real estate offices and traditional 6 percent commissions. "I think it's anti- consumer."
The Justice Department agrees.
For the last nine months, the Justice Department has continued to push toward a courtroom its antitrust action against the National Association of Realtors, which is headquartered in Chicago.
Since the start of this year, the NAR (www.realtor.org) has tweaked its policies, but not enough to stop the case from moving toward court. The organization also has been waging a nationwide public awareness campaign that emphasizes trust, ethics and its study showing homes sold by Realtors sell for up to 16 percent more than those sold without them. …