Due to bailouts will O'bama's pay czar decide realtors comissions are to high?

Just curious how the industry might view O'bama's pay czar deciding, that due to the government bailing out the real estate market, that fees to list a home should not be 6% maybe 3% tops, not more.  It is tax (in a sense) that is adding to the cost of buying a home or selling a home.  Banks are giving, government is giving, a lot of homeowners have given yet the real estate buying/selling industry has not given.  Except for the fact they are selling less.  I guess some realtors  have moved on and agencies have closed, but with current technology such as cell phones the internet etc. many can have a second career and stay in touch with a slow market.  I would have to say some of these new technologies have reduced the cost of marketing a home.  It has to be cheaper than it was 2 years ago!  Consumers are curious people and there is a strong argument that this be done, afterall a $200,000 home generates $12,000 to real estate costs each time it sells, higher percentage in some markets.  I asked a realtor recently how many homes are shown to the average buyer - his answer was 8-10.  I see that as a weekends work, if that realtor takes approximately 1/2 that's $6,000, good pay for a weekends work.  Your thoughts?  Explain to me why I'm giving that when I buy or paying that when I sell, in light of todays technology.

I don't think that the pay Czar is going to touch that issue.  Real estate fees are negotiable.  There are many arrangements available where the owner can do some or most of the work to reduce the commission.  A full service real estate company is going to charge more than a flat fee or reduced commission company.  Each real estate company decides how much they need to stay in business.  Using your $12,000 example typically 1/2 goes to the listing agency and 1/2 to the selling agency.  Then each of them splits with the agent according to their contract.  If the average buyer views 8-10 homes how many buyers does it take for the agent to actual make a sale and get paid?  It's up to you to determine which arrangement best suits you and whether you need all of the services of a full service real estate agent.  By the way showing homes is only part of what the agent does to earn the commission.  Just like any job there is lots that goes on behind the scenes.

Then tell me what they are, all of the duties.  Responsibilities it they're the listing agent and obligations to the buyer if they represent them.  My experience is that I'm doing the work.  I am questioning the pay czar thing and you should too.  I'm sure the CEO's of some of the companies who are receiving $1 actually are working, you get what you pay for many times.  I don't mind at all if you refer me to a website(s) just be specific about where I find the information.  Please include information on how to negotiate what you mentioned above.  Thanks.

I also think the Realtor commissions are a little too high.  I've seen many times where a person goes to look at a house and uses someone from the listing agent's company to represent them, which is EASY money for that agent.  But on the other hand I've also heard of agents who show upwards of 40 - 50 houses to somebody and the person ends up walking away without buying anything.  So while some of them will be splitting that 3% with their broker for not doing much work, you don't hear about all the driving around, personal time, and showings involved that goes along with being a Realtor.  I don't know exactly what other duties are involved behind the scenes as Bryan had mentioned, but I do agree that technology has helped them reduce their workload. 

As far as negotiating goes, I don't know of any websites off hand but it's just like the definition that you'd find in the dictionary.  When asking an agent to represent you for a listing or to help you buy a home, tell them that you will only agree to a commission of 5%, or 3%, etc.  You'll have plenty of Realtors tell you to go fly a kite but there's plenty of them still out there who are hungry for any business they can get.  The 6% isn't set in stone, it's just a standard structure that most people don't question. 

Eli Stein:

I don't mind at all if you refer me to a website(s) just be specific about where I find the information.  Please include information on how to negotiate what you mentioned above.

Here are some sites that tell you a little about what a real estate agent does.

http://realestate.about.com/od/isrealestateforyou/p/agent_daily.htm

http://homebuying.about.com/od/realestateagents/qt/AgentDuties.htm

http://www.exclusivebuyersagents.com/duties.htm

http://www.realestateabc.com/homeselling/listing4.htm

Sites discussing commission negotiation

http://homebuying.about.com/od/realestateagents/qt/NegCommissions.htm

http://realestate.msn.com/article.aspx?cp-documentid=13108435

By the way in the late 70's and early 80's there were a number of lawsuits against real estate agents for price fixing.  These law suits were filed by various state attorney generals and the FTC.  Agents that even discussed what they charged with other real estate agents or companies received huge fines. While 6% may be the norm in your area companies and agents are subject to price fixing if the get together and decide that is what all or some are going to charge in a given area.

Used to be that compensation period was negotiable....and of course that is under examination for possible changes....so yes it is possible Realtor commission compensation can be changed.  The old adage never say never.

Eli,

I always advise my clients to use the services of a realtor if they are buying a new home since the cost of the realtor does not come directly out of there pockets. Realtors do not only show houses, they are professionals at the legal aspects of the of buying and selling, so for most consumers they serve a great purpose by limiting their liability of the purchase or sale. Today's contracts are very technical, for they are built to protect both the buyer and seller.

On the other hand, I have many clients who prefer to sell their home themselves, they generally try to sell the home themselves for for the first month or so, but many eventually turn to the services of a realtor. The realtor has the data to accurately price the home and the capability to effective market the home.

The most important thing is to be comfortable talking with your realtor. Many of my clients do not care for there realtors, or they think they must use a particular realtor because they are on the sign and that's a huge mistake. When I say comfortable, I mean COMFORTABLE!!! This is someone who you must like, who you personality gels with etc... After all, you will be chatting with them about important issues throughout the whole process...

Just like any commission based career, those that demonstrate the value of their service and build business through the effective marketing of that service will thrive. Those that do not...will fail.

Specific to realtor commission...6% is a small price to pay for the services of a good realtor and it is way too much for a bad one. Find a trusted partner and you will understand the value.

Certainly not a big fan of any government entity dictating the amount of pay a commissioned employee earns as long as proper regulations to protect against abuses in the industry are in place.