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It was never a question of "if" but "when"

The new 300 pound gorilla, Zillow.com, has taken the logical next step. Now you can go and post your home for free and get exposure to Zillow.com's massive customer base. Interesting tag line: It's FREE and anyone can do it. Translation: you don't have to be a licensed real estate agent.

Clearly, Zillow still has its problems, and the accuracy of its valuation algorithm has attracted lots of critics. But one thing can't be denied: these guys have a lot of momentum and they know how to keep the public's ear.

I saw a New Yorker cartoon the other day. It showed a couple of dinosaurs chatting. One was emphatically stating the time to develop the technology to destroy an earth-bound asteroid is now! but the other dinosaur clearly wasn't interested. And in that vein I'm looking forward to seeing the reaction from the National Association of Realtors. To date their stock response has been to point out Zillow's flaws and insist that technology isn't a threat. If they continue with this approach then this will herald the beginning of the end of the standard 6% commission. <= 6%???? See my Note, below

Stay tuned...

Read the original post at EquityScout.com

Posted by Christopher Smith on 12/07/2006 09:59 AM

Comments (39)

realtor, real estate investor, mls, zillow, zillowcom, commission, real estate agent

39 Comments on It was never a question of "if" but "when"

DEC

2006

This will be a very hot topic on AR...thanks for the news.

The minute you say "Standard 6% Commission" you are setting yourself up for a possible anti-trust violation. I object to your wording there Christopher, because it implies that some have agreed to fix a commission rate, and that is not true for me, for my office, or for my company. Be careful there.

Christopher, this is definitely going to be a hot topic, just like when the internet first came alive, theories abounded on the demise of the real estate agent. I might liken Zillow to WebMD. It's a great tool to help understand posssible ailments, but when I need a Dr., I need a Doctor! I think there will be a rush to the new model, until the shortcomings become apparent, e.g. the discount brokerage model.

Speaking of those 2 dinosaurs...While I understand the legal necessity to admittedly deny that commissions are agreed upon or "fixed" as a general industry standard, Why then somebody needs to explain If commissions are not really a standard amount...why are so many Real Estate Agents Soooooo concerned about discount brokers?

Sorry Rhetorical question...its because discount brokers offer such sub-standard service right?

Christopher: Good catch! I am also curious to see if and how the NAR and Realtor.com respond.

How will this realtor respond?
Information is FREE. Knowledge & Experience Are Priceless!

This is probably going to sting. I think Zillow (along with discounters and other business models) is showing that the only thing that keeps probably 80% of the Realtors employed is that the MLS data is controlled by the industry. Once that data is open to the public, the value of the majority of Realtors goes out the window. FSBO's don't sell because they aren't in the MLS, not because they are FSBO's. Hence the only way to really sell a home effectively was to hire a Realtor, which really means paying to have it put in the MLS. Once there is a public conduit that carries all homes for sale, the value of most Realtors is severly diminished.

The reality is that homes sell themselves or they sell by simply being part of the MLS. The MLS served as a conduit to advertise homes for sale in one easy place. The internet will quickly replace it whether Realtors like it or not. Most consumers would love to be able to just post their home for sale in one place and view all the other homes for sale. You don't need a Realtor to do that. Buyers find homes they like and sellers sell the home to that buyer. No friction.

Of course, there are many Realtors who are great at what they do - negotiating prices, the neighborhood knowledge, research, etc and all of the other stuff that goes along with buying a home. These value add services cannot be replaced by technology. These Realtors will be around and are worth every bit of commission they earn regardless of what happens with technology and businesses like Zillow. Will it still be 6%? Probably not, but it should be more than enough to compensate these professionals. Buying a home has too many potential pitfalls for it to be simplified to that of buying a television or even a car.

It will be interesting to see how the services of Realtors shift to compensate for the improvements in technology. Only the strong will survive.

"Knowledge & Experience Are Priceless!" : I agree 100%, but considering how many bad realtors there are out there this will sting them. The good ones will always be worth their weight in gold, the bad ones just got replaced by a flick of a switch.

Good comments all around - and I figured this was a topic that would generate some interest.

First of all: I have great respect for real estate agents. I'm an investor and I use an agent - helps me keep my ear to the ground, and the assistance I get from her in buying and selling is worth what I pay. But...I can't guarantee that I an other market participants will feel the same way in the future if the industry doesn't evolve and adapt to new competitive forces.

Michael compared Zillow.com with WebMD, a once promising startup with a now discredited business model. In my opinion this isn't a good comparison - a doctor spends somewhere between 10 and 15 years in college, medical school, and residency before she can operate on you. And the internet, no matter how good it gets, will never be able to remove your appendix.

A much better comparison is with a stockbroker - a skilled profession that offers a more similar service. This profession hasn't been eliminated, but it has changed radically, and margins have plummeted. I use a realtor, but I don't use a stockbroker. I go online, log onto vanguard.com or etrade.com, check my stocks, read the research, buy, sell, and manage my own portfolio. Ten years ago they told us this would be financial suicide - but now it's commonplace.

Has real estate gone that far? No. Not yet. But it will if the response from the National Association of Realtors is simply to insist that the public will always pay 6% commission to sell their house, and that technology isn't a threat.

is this even legal Christopher? wow 6 % i know customers who wont sign for that much to sell their home

There is no such thing as a standard commission, you might want to edit this blog post since there are as many ways to price real estate services as there are agents. And you know, there is no such thing as a discount broker when you're talking real estate...but there IS such an animal as a limited representation company. =) we need to be aware and knowledgeable if we want to survive. be able to bend so we don't break.

Interesting points you mention Christopher, but where are you getting this standardize 6% commission from? Commission is not set in stone. You say you are currently working with a realtor. If you choose not to pay 6% that's your call, not your realtor.

Thanks for the note - saw the news yesterday on Inman. I echo what a couple others have said - there is no standard commission, it is negotiable. I'd corrrect this.

Thanks for the heads up Christopher..I'm interested to see what happens with Zillow and the whole shabang...

Scott

I had a client this year who used Zillow exclusively as a resource to make bids on homes we were viewing. It was quite frustrating. Eventually I did overcome the hurdle, but it took time and patience.

My "standard 6% commission" statement has gotten quite a few comments, and it's been suggested that I clarify.

6% (split between the buying agent and the selling agent) isn't a rule...and yes it's negotiable. Due to anti-trust restrictions it would be illegal for any entity to try to "enforce" this, including the National Association of Realtors or any other agency.

However, 6% has been a rule of thumb that the National Association of Realtors has done everything in its power to protect (just as any industry - auto, energy, consumer products, whatever - will always try to protect its margins). That's just good business.

The New York Times ran a great article on this. A quote from the article: Traditional agents still firmly control the M.L.S., which allows all participating brokers, including Redfin, to view almost every home for sale in a particular area, even those being offered through competitors' agencies. But the typical 6 percent commission, paid out of the seller's proceeds and split between the seller's and buyer's agents, is under attack because, as economists note, it does not serve consumers well.

The NY Times uses the word "typical". I said "standard". Maybe their word is better than mine...but the spirit of my comment is that technology starts to change the expectations of consumers regarding what they expect to pay for a service - whether its buying an airline ticket, trading a stock.....or even buying a house.

We have faced this in the mortgage business as well. When Lowest Rate dot com messes up a clean transaction the professionals are there to clean it up.

These sites are designed for the clients we probably don't want anyway. You know the ones who want the deep discount and the top end service. I refer people lioke this to the dot.coms. Some have a great experience. The ones that don't and come back are ready to undestand my value proposition and will better understand the value I bring to the table.

The others aren't keeping me up at night and wasting my time.

Chris...

don't back down from the pressure...When you get such a response, it has struck a nerve someplace...

While Sherman and Clayton Anti-trust laws won't allow them to admit that 6% is the recognized standard...That doesn't mean that it isn't the accepted standard. More Real Estate Agents should think about the fact that is someone like yourself (who is not a real estate agent) shares a belief with most of the consumers in the country that this is the recognized standard, that this number must come from someplace...We know you did not just pick it out of thin air.

And if Realtors were as innocent as they claim in regards to anti-trust violations...then The FTC wouldn't be bringing charges against MLS companies all over the country claiming unfair trade practices by the Group as a whole for not allowing clients access to listings that are offered at GASP....(LESS THAN 6% COMMISSION) 6% might be negotiable...but good luck finding someone to do it for less. (Not saying every one of you aren't worth the price...but lets start by being honest with ourselves.)

And as for trouble with Zillow and it being "off" the mark...

It is and always has been an estimate....I would argue that anybody who knows anything about statistical analysis would have a hard time arguing that it is any further off the mark than any other acceptable valuation model, like appraisals, CMA's and or AVM systems. The accuracy comes from its deviation from the median value, not the high or low or exact price of homes.

Christopher, don't worry about the 6% thing. We are all friends here and know "what" you mean. If the FTC reads this blog, it will be no "new" info for them. Great Post!

Joshua: ... not really a matter of backing down - and actually most folks on both sides have made some good points.

My main point is that the National Association of Realtors is acting just like any other industry group acts - they flex their muscles to the best of their ability to maximize their business proposition. Nothing unethical there. I figure if you don't have the FTC breathing down your neck you're not trying hard enough.

But...the problem in this case is that this just won't work in the long run. John Klassen refers to the ZillowHeads as the kind of clients that "we probably don't want anyway" which is the same approach that the NAR generally has employed. This, in my honest opinion, is a big mistake.

Zillow is a tool. And just like any other tool people can abuse it (believe me I know this from experience - I run a website that does investment property evaluations and I've seen some people do some crazy stuff). But... people learn, and eventually they get better, and their expectations change.

Back to stockbrokers. Remember E.F Hutton - the stock brokerage firm? "My broker is E.F. Hutton...and E.F. Hutton says"...then everyone turns around and listens w/ rapt attention. Hutton and their ilk sneered at the internet startups. Financial suicide for foolish investors, they said. Cheapskate clients...we don't want 'em.

Well, E.F. Hutton is gone. Bankrupt. People stopped listening, and they stopped paying those fat commissions. Meanwhile, E*Trade, Ameritrade, Fidelity, Schwab, and the rest of the online guys survived the dot.com collapse and are churning and burning. The point being that all competitive landscapes change...and market participants who don't go with the flow - those that stick to their guns with a religious fervor - are doomed to the dustbins of history.

Okay... maybe that was a little dramatic, but you get my point.

Great conversation, by the way...

6% hasn't been the norm in Southern Ca for years.. I prefer the term fee anyway.. It's my fee for the service I provide... I recently sold a townhome for XXX.. the next door neighbor had their property listed at same time.. these were identical units except mine was an end unit... we closed escrow three months ago.. they just went into escrow at 50K less then we sold for.... what's the difference.. according to my clients... I made the difference.. My clients knowl that paying a bit more for my services made them a lot more money at the end of the day..

We all knew Zillow was going to do this, so what's the big deal - just another place on the web for people to see our listings (since we can post for free there, too). It still doesn't show the home, provide good help in pricing it to move (Zillow still shows our Michigan Avenue penthouse to be worth somewhere around $400,000 to $3.6MM, hmmm, do I get to just choose?) and all the other things people get when they pay for service. This is a complementary model for most of us, not an adversarial one. I've written several posts on this basic topic, about REALTORS deluding themselves, conversely their fear of the internet models, etc. and I always get to the same conclusion...REALTORS get paid what they do for a reason and there is a lot of customer dissatisfaction with FSBO and discount service models, again for a reason.

It was not too long ago that people thought the Internet would replace real estate agents or that discount brokerages spelled doom for many in the industry.......well none of this has been realized. certainly not in my market. Quite the contrary, the challenge has been and will always be to maintain your guard to give your selves a competitive edge! I have customers using the wed to refine their search. which has translated into my spending less time showing properties that miss the mark for one reason or another. Additionally, this market in my area is seeing a reduction in discount brokerages activity. Sellers realize they need all of the arsenal they can muster to achieve their goal. They simply cannot afford not to work with an agent to do ALL that needs to be done to realize a successful sale.

My comment is more focused on the whole information and Zillow.com, Realtor.com, info sharing and FSBO etc...

What's all this about "control". The info is out there for any property. Owners have always had the right and ability to sell there own property without an agent. Sometimes it can go well, sometimes not.

The MLS is a paid service by a bunch of folks in a particular industry to communicate efficiently. It self polices itself to provide the best info possible to each other. We pay the bills for it! As a Realtor, you don't have to be a member of it, just have to be nuts not to! Most trades have their paid information sources... so what's the big deal about an MLS?

As for Zillow, there are a million sites to post your property for free or for a fee... and they eat each other alive because now they are competing. Craigslist anyone? There are still agents who don't post on Craigslist! Hell, I pick up clients all the time by posting my associates open houses I sit on Craigslist, such as, "I will be at so and so this weekend".

The Zillow thing is all fine and good. Craigslist is great. But the reason the MLS and good agents survive is economy of scale, efficiency, good information and experience.

I still don't see what agents are controlling. We're a good service... and being full time, of course I'll have better info. That's the risk and reward for the time I put in.

Each tool is embraced. Be on guard? No need. Just evolve the business model and learn. 80% of agents don't want to learn, young or old and there is your attrition rate.

I'm a hybrid agent, see ya in the rear-view mirror!

One more thing... Zillow may or may not become a great site in general. But it sure has had a lot of advertising and freaked out agents helping it crammed down our throats.

There are plenty of better sites and tools in my local market. The reason people walk right up to me at an open house and become my client is... they want the expert! Even the know-it-alls crack and want an agent sometimes. There is no web site to get them through it all in their minds... or they just don't want to go through it, don't trust themselves. It's like doing your own insurance, your own taxes, fixing your own car, remodeling your bathroom, and buying and selling your own home... it's hard being an expert at everything!

Why do I keep using exclamation points?! What the hell am I talking about?!

Chris

Your comment about stockbrokers was right on the money. However, what most brokerages did is go after higher net worth clients who don't have the time to make individual trades and need someone to manage a more complex portfolio. Brokers didn't go away, they just found a new market. These client's know the value of a good financial planner/stock broker and are willing to pay for the service. They aren't going to nit pick over $30 vs $32 per trade. Alternatively, many companies also understand that some customers aren't worth having either. They cost too much to maintain, so they do little to go after them as customers. I think there is some truth to ignoring client's who don't see the value to some degree. You can't be all things to all people.

I suspect Realtors will wind up doing the same by finding niches. High value properties, foreclosures, one of kind properties, and anything out of the norm, will probably always use Realtors at fairly high margins. I think margins are going to get real thin on cookie cutter, subdivision McMansions in the $100-$500k range though. It may not be next year, but it is coming.

Again, the only thing keeping a lot of Realtors employed is the MLS. Once there is an effective, public conduit, that mimics the MLS it will be game over. It will probably take several years, but it is coming. In fact, it may not even be monetized. Think about if the county government go into the game? They already have all the information. Charge homeowners $5.00 to list, it becomes another revenue source and because it is the government, many consumers may do it on their own.

I am a LO and I often find my wealthier (wealthy as in millionaire) clients tend to rate shop me less than the middle and upper middle class clients. It seems higher income folks tend to understand the value of a relationship with a professional and sometimes it ain't all about price whereas folks who want to play wealthy such as young attorneys, MBAs tend to beat you up over .125% and $50 in closing fees. My wealthy clients tend to take the position of "I know you probably aren't the cheapest, but I want someone who won't screw up the deal and not waste my time. Just let me know when the closing is so I don't have to spend anymore time thinking about this. Get it done with no mistakes or problems." I guess I am fortunate to have this client base because I can tell the rate shoppers to keep on stepping and have fun with LendingTree, Quicken, or whatever other low rent boiler room mortgage company they want to use.

Ultimately, I think Realtors need to combat zillow and other technologies by helping people understand that REaltors do more than just find homes. Unfortunately, most consumers don't really understand that crucial point. They have no idea how complex buying a home can be. Ironically, the NAR doesn't do much to help this by allowing anyone to become a Realtor which ultimately degrades the value of the profession, hence the fact consumers don't respect what Realtors do because quite frankly, any idiot can play Realtor. As long as housewives can sell homes on the side to make a little extra pocket change or Real Estate becomes the profession of choice after you get laid off from your corporate job, everyone is going to question the commissions and looking for ways to cut them.

Russell,

Great points.

A comment on stockbrokers: Stockbrokers didn't just shift to upmarket clients - there weren't enough upmarket clients to go around. A lot of brokerage firms just died when the market dried up. Brokerages like E.F.Hutton were mass market - their advertisements were pointed towards the mainstream. For all intents and purposes that market no longer exists.

Your comments on the NAR is right on the money. There are over 1,275,000 registered Realtors® nationwide with around 10,000 new ones join every year. Wow. That's a lot of competition. I wrote a post about this at http://www.equityscout.com/public/Blog1181.aspx.

You're right when you say that Realtors need to combat Zillow et al by helping people understand that Realtors® do more than just find homes. But the tough think about that is that's all that some (not all!!!) Realtors® do. But in support of the NAR - at this point how would they keep the hobbyists out? (Note: the NAR recently made a fairly riddiculous comment recently trying to pump up the prestige of Realtors® - http://www.equityscout.com/public/Blog1361.aspx)

But you hit the nail on the head when you talk about niches. A Realtor® who serves a niche isn't offering up services and data (cheap/low value) - he/she is offering information (higher value) and knowledge (highest of all). This I strongly believe (and by the way - this is the rationale behind the business model of my company - EquityScout.com).

You seem to have your eyes wide open...you'll thrive. Many won't. Remember how I commented that there were't enough upmarket clients to keep all the stock brokerages busy once the dot.coms hit....well there won't be enough niche homebuyers either.

DEC

2006

Z, IMO, is no more nor no less than a hot air balloon that will burst when the founders float their ISP and take their money out.

Agents and brokers have nothing to worry about with these fringe web sites. So what if owners and agents list homes for sale on the site. That's been going on for about 10 years now.

For the record, I haven't seen a 6% commission in the Maryland area for some years. 5.1 is the average. So, if, as the FTC claims, it was unfair to consumers, they achieved their goal.

we don't have Zillow here in Boise (or more correctly, Zillow doesn't have us, here in Boise), but I've spent time playing with it for neighborhoods in Washington state that I am familiar with, and homes that I know personally. I'm not entirely convinced that the values given by Zillow are all that accurate, nor is the property data. I know of a property that Zillow shows as a 6bdrm 3 bath, built in the '30s, updated in the 80's... actually two homes on that property. Know of another that shows as a 70's rambler with 1150 sq ft, remodeled in the 80's... actually closer to 1700 sq ft, remodeled in 2004. Know of homes with 'zestimates' at $276 to $290 sq ft, while the comps are $233... what's up with that?

Like I said, we don't have Zillowability in Idaho yet, but what I've seen hasn't scared me, as an agent, so far. Anyone with more Z experience, how realistic is it where YOU live? So far, I'm inclined to agree with Lenn. I'm not buying the idea of Zillow taking the role of "National mls".

Yes, there have been many places to advertise homes for free on the internet. But none of them have created sufficient buzz in order to attain the critical mass needed to get past the tipping point. From what I have seen and read of Zillow, I think that they will be the one who does it. They seem to have the right stuff to make it all happen.

If Zillow can eventually give one the exposure of the current MLS, then the next big thing is determining the correct price. You could hire a few good appraisers for that part. I know banks also hire out agents to give them BPO's (Broker Price Opinions) and I don't think they pay very much. Many times you'll have a stay at home wife who is around most of the day to show the home or they can rent out a lock box to put out when needed for added convenience. There is a company that takes care of the "contract to close" activities for agents and it only costs $300. Maybe you can hire an attorney to provide you negotiation services along with the closing services.

So for not that much money you can put together a pretty good inexpensive transaction. The big thing that would be missing though is being able to pick up the phone and vent on your agent or whine about your home not being shown. That might be the costliest thing to replace. A good theripist charges a lot for an hour of counceling and a standard listing involves hours and hours of emotional therapy to get through it all. When it comes down to it, the good full service agents basically really get paid for helping their clients deal with the stress of the transactions. But eventually they might even be able to outsource that to a call center in India. Who said real estate had to be a local business?

DEC

2006

Zillow has come - and if it has support - it will stay. Otherwise it will go the way of the majority of the upstarts - I mean - startups!

Chris, Did you notice in that article that they don't mention the market they serve NYC. They are talking about Seattle. I wonder why that is? I wonder why they didn't put this article in the real estate section but hid it in the money section?

Because the NY Times considers themselves the MLS in Manhattan and the brokerage community has gone along with them and supports them. Now the Real Estate Board of NY is going on line with a public web portal.

Perhaps that might hurt the New York Times, perhaps the NY times is losing ad revenue from the "so Called" 6 per centers. Everyone has an agenda including the allmighty NY Times.

I also disagree with your comparison of stock brokers to real estate brokers. I have actually been a stock investor longer than a real estate investor. I left Merrill Lynch after many years in the late 90's and went with an online broker, DLJdirect that later became CSFB direct, later Harris bank and finally etrade. The key difference is these companies are still brokers but online brokers. They were already brokers. They have licensed series 7 brokers working for them. I went with them because they offered something that my full srvice broker could not. If I maintained a certain balance I was offered IPO's. At Merrill only multimillion dollar clients were offered that. The full service companies maintained high net worth clients. You are confusing an online discount broker with a media company. A website is a media company, a technology company, a software application, a resource a tool, whatever but they are not icensed real estate brokers they can not execute a real estate trade.

When I find the online realestate website that all I have to do is click and I can move into my new home that I just bought online then I might be concerned. Equities are intangible it takes a second to buy. In fact my broker guarantees a 2 second execution or I don't have to pay the commission. Since I had already been investing in the stock market since the 80's Thankfully I didn't lose my lifes savings and retirement when the bubble burst like most novices that went on line buying stocks. Today the full service brokerage's on Wall Street are doing better than ever.

DEC

2006

The more we talk about Zillow the more FREE exposure it will get. As a licensed Broker, the competition is and will always be there. We, as Realtors, will have to show our competence, our self worth and knowledge of the market and expertise to provide value to our clients. We will have to work smarter and may be harder. The baby boomers, the largest generation, are starting to retire, some do not owe or care to owe a computer and they don't even know what a zillow is! Zillow cannot take care of people like they want to be taken care of. Zillow won't care that a potential scammer is coming to preview a home or isn't pre-qualified for a loan, Zillow won't care people are going through foreclosure, divorce or a loss of a spouse - we as Realtors do and can show compassion above and beyond our job description. We can provide a personal service that no computer technology can or ever do. Goodnight Zillow!

AUG

2007

Im not paying 6% commish for compassion. Agents need to start providing real information about the property I am looking at, and provide it the moment I walk in the door. Im so sick of hearing I will find out and get back to you later. Like there is no owner or history on the house. This info should be printed up and copies left where buyers can pick it up the first time they view the house.

Chris,

Zillow sure has carved a niche for itself in the real estate marketplace on the Internet. The website is versatile and well-functioning and they know how to market it. I agree with you that they do have a modest issue on their hands over the zestimates. They are pretty wild, can actually go both ways. And not necessarily up to date.

Zillow is a tool (a really cool one)

Realtors are a service.

Our fee structure is broken but Zillow isn't going to fix it.

Barriers to entry in our industry are too low. Quality of service is very difficult to measure.

Stocks aren't unique, aren't highly leveraged (generally) and aren't emotional purchases - Real Estate is.

Charging a fee tied to the value of the asset is erroneous and will not last. It's not 6% or 5% or 2% it's substantially more - like 25% or 50% or 75% because the client leverages the asset (and may only have 10% equity or 20% equity in the property) but pays us in cash. Our fee structure isn't in question because it's a small single digit fractional share of the asset - it's because it's a substantial percentage of the client's equity in many cases. (and right now many of them have lost that equity and they are hard pressed to give it to us!)

Why do we charge $12,000 to sell a $200K home but just $6,000 to sell a $100K home? There's no real reason. The service offerings between a $300K home and a $600K home don't vary that widely but the fee is $18K vs. $36K WHY???? Because that's the way it's always been. Guess what? It's going to change and it's not going to go up.

We provide a service. A service charge should be tied to time and materials based on the value of the provider's time and requirements of the job. How much of your time is wasted by offering free or uncompensated services? Wouldn't you like that part of what you do to stop? The legal profession is a better model than the medical or financial adviser professions are for what we do.

Our model is broken. We can change it or we can wait for our clients to fix it or we can wait for our competitors to fix it.

We offer value, we should charge for our value and find a way to make the shared compensations for our co-brokerage relationships accomodate their participation in the transaction. Parts of the model work, but big parts of the model are broken.

I don't believe it's about "discounting" or unbundling of services. It's about value add and cost/profit marginal ratios. I believe flat fee services by the hour modeling should begin to evolve. If they use your time, they pay for it incrementally per a retainer.

I enjoy this forum and I've enjoyed reading everyone's comments.

AUG

2007

I think your points are dead-on Christopher. The "listing side" of the deal is under great threat. When we see the next tech-stock boom, it will be brutal.

AUG

2007

Good post Chris. Too bad that many comments focused on 6% commissions issue. 6% is over for the most of us. The commissions will stay, but average commissions will be lower. We will have fixed fees, per hour fees and you name it. Some of us will have more than 6% commissions. We will get a better correlation between the service depth and its quality and payment for the service. I address some of this issues in my post "Can Zillow Annihilate Realtors? The answer is NO. It will happen only to Realtors who don't adapt to changes that are happening right now (one of the changes is adaptation of Zillow; why to fight them if they provide a lot of help). There is a plenty of great agents, brokers. Our trade association has much bigger problem. It might have lost the ability to adapt a long time ago.

I like what you are doing and shoot you an email in a day or two.

Christopher,

Thank you for the thought provoking post. I tend to agree with you, as far as the whole "not if but when" scenario. If real estate agents (and their trade association) fail to keep pace with consumer demands, they will end up in the ash heap of irrelevance.

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