Yesterday, I stumbled across an article in the Yahoo Finance portal. The article listed comments/topics regarding the economy. You can see the entire article by clicking here.
One topic discussed in this article was the recent NAR legal settlement. Here is a quote from this article:
Realtors, Kiss Your 6% Goodbye!
This week, the Justice Department and the National Association of Realtors reached a settlement in the antitrust case against the NAR’s monopolistic hold on home listing information. It’s a victory for Internet-based and discount listing services and another stake in the back of traditional brokers attempting to recover from this downturn.
• Media expert Jeff Jarvis says this means good riddance to real estate agents‘ familiar 6% commissions: "The only reason… that Realtors could hold onto their high commission for such little value and work is that they kept information away from the marketplace, making it inefficient. This new economy can now come to real estate sales as information become freer. Oh, it’s not fully freed yet. But I do believe that the combination of this settlement and what it does to empower discount players and the depressed real estate market will combine to finally shove dynamite up Realtors’ rears."
• Calculated Risk looks at brokers’ commissions as a percentage of GDP, showing that commissions "soared" in recent years as a function of the housing bubble. But as of the first quarter of 2008, commissions declined. "Now, with prices falling, transactions falling, and more competition, it is likely that total commissions will fall further over the next few years. Tough times for many real estate agents."
I’m not sure I want dynamite shoved up my rear. It doesn’t sound very appealing. However, I do agree with the main point being made, which is:
We cannot continue to base our businesses upon "secret" MLS data. The MLS data will soon be public information. It’s inevitable. Your prospective customers will have access to this information.
How will this impact your business? Have you thought about it? What are you doing to prepare for it?
Your business must provide value over and above mls data. Why should a buyer use you to buy their home? What do you bring to the table that other agents don’t? Why should a seller use you to sell their home? What do you bring to the table that other agents don’t? These are very important questions.
Your answer can’t be – "Well – I have a team." Everyone has a team. It can’t be – "I’m a millionaire dollar producer." Nobody cares. You must provide real benefits to your clients or you’ll be out of business completely.
Please take this seriously. Take some time to think about what your business will look like when the public has full access to the MLS data. What will they need you for? They won’t need you to provide a market analysis because they can do this research on their own. Your free home evaluation marketing campaign is on shaky ground. They won’t need a full service agent because they can list their home for a low flat fee with a discount broker. Buyer’s will also have access to the same listings you do.
Is this scary to you? It should be. Be proactive. Start creating benefits for your business that go far beyond MLS data. If you don’t, you might just feel like someone stuck dynamite up your rear…
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