Sunday, September 03, 2006

Pay $10,000 to ride in a Realtor's Lexus?

The New York Times has a lengthy article about pressure on that 6% commision that real estate brokers make, regardless of how much work they do and regardless of the price of the home. The Seattle comany Redfin, featured prominently in the article, is a fully-licensed broker that gives buyers a rebate on the sales commision and is making traditional agents mad.

Quotes from Chang-Tai Hsieh, an economist at UC-Berkeley is quoted for pointing out that the 6% system benefits nobody, not even the brokers, who spend most of their time searching for new clients--a fixed system like a retainer or salary would benefit them more.

Redfin looks like a cross between an online store (like Amazon) and a traditional hands-on broker. You have to log into their site to get all the info they promise (e.g. neighborhood reports that are more detailed than MLS), so I couldn't check for myself, but the site looks like they understand the online experience. 

One thing I thought was neat is how when agents refuse to sell to online buyers, Redfin contacts the seller directly.

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