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Information Drives Home Sales Progress

Richard Montgomery on

Dear Monty: As a former real estate agent, you don't have any idea what you're talking about. Yep, there are good and bad agents, but all listings are on the internet. I don't know where you get your info or what experience you have, but you're spreading totally off-base information. As far as commissions, the listing agent pays for all of the non-Broker advertising. Here in my state, it runs big dollars. I'm just saying you may be working in a time past.

Monty's Answer: Not all practicing real estate agents agree with your sentiments. It is unclear how long you have been retired, but there are real estate agents today who realize the real estate brokerage models are broken. In 2015, The National Association of Realtors (NAR) commissioned an outside agency to survey many real estate transaction participants. The goal of the survey was to identify the future threats that the industry faced. Over 7,000 agents responded, and their response was clear: "The biggest challenge is the masses of marginal agents are destroying our reputation. The real estate industry is saddled with many part-time, untrained, unethical, and incompetent agents. This knowledge gap threatens the credibility of the industry." (You can find the report by searching "NAR Danger report" and clicking the link for the Greater Chattanooga Realtors website. The agent section begins on page 20.)

THE INDUSTRY IS SLOWLY EVOLVING

When I first read the Danger Report, I had to chuckle. I began as a real estate agent in 1966, and at that time, some agents had the same complaint as they did in 2015, which was 49 years earlier. There are various reasons why the real estate industry has been slow to change; the Danger Report mentions some of those reasons in other sections. There may be another reason. This reader's question required some research. The Association of Real Estate License Law Officials (ORELLO) website has a fascinating story about real estate history. The state legislatures have been deferring the rulemaking of real estate law to their real estate commissions. It is a secret hidden in plain sight.

PROGRESS VERSUS TRADITION

As you mentioned in your comments, there are good and bad agents. While you simply accepted that the situation exists, the difference is that some of us want to correct the problem. The way organized real estate works today, from the customer's point of view, is that they only know whether they have a good or bad agent after they hire one. Technology has changed the world. Some of those changes are not good, but most are positive. Many real estate consumers are already aware that they can find the same information an agent delivers on their own. According to NAR, about 10% of all home sales in 2023 were sold directly by the owner to the buyer. Still, the legacy brokers and agents are hanging on to the high commission rates, even as the availability of real estate data without them has reduced their value. As time passes, all the fears in the 2015 report linked above are coming true.

 

THE IMPACT OF TECHNOLOGY

Many home sellers use technology to gather the data that agents have held dear for decades to keep commissions high. There is a time commitment for sellers, but the savings are a windfall.

Richard Montgomery is a syndicated columnist, published author, retired real estate executive, serial entrepreneur and the founder of DearMonty.com and PropBox, Inc. He provides consumers with solution options to real estate questions. Follow him on Twitter(X) @dearmonty or DearMonty.com.

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Copyright 2024 Creators Syndicate, Inc.

 

 

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