Government to Realtors: You charge too much for commissions
At the risk of piling on a real estate industry already taking its licks, here's the latest from the U.S. Department of Justice in its campaign against real estate commissions it deems anti-competitive.
The feds have set up a Web site for consumers to track real estate law in their respective states. The gist of the government's argument is consumers were ill served paying about $93-billion in brokerage commissions in 2006.
The average commission this year stands between 5 percent and 5.5 percent, the government says. In real money, a typical commission this year was $11,203, up about 23 percent since 1998.
Let the DOJ speak for itself: “The actual median commission paid by consumers rose sharply along with the run-up in home prices. Unless broker costs were also rising sharply during this period of time, competition among brokers should have held commissions in check even as home prices were rising.”
DOJ filed an anti-trust lawsuit against the National Association of Realtors in late 2005. The case is still inching its way through the courts.
For what it's worth, when I sold my house north of Tampa this year I volunteered to pay 6.5 percent, the extra 0.5 percent thrown in to entice the buyer's agent.
The tactic worked. I was one of the only sellers in my neighborhood offering so much and got more traffic as a result. I paid $1,000 more at closing but it was worth it for the quick sale.
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Housing market news is the focus of the (Un)Real Estate blog. It offers an inside look at the Florida housing market and real estate news, with a focus on Tampa Bay. Its goal? Simple: To help you keep a roof over your head without losing your shirt.
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