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Greedy Lawyer Knows Nothing About Commerce

By
Industry Observer

It's been around ten years since I made a penny in real estate commission, so there is no financial interest in my opinion. The court decision on real estate commission and the fantasized characterization of the industry as a cartel is just plain stupid. 

The prosecuting attorney says that the seller is forced to pay both the seller's broker and the buyers broker, and even that is less than accurate. The seller isn't paying anyone; the buyer is the one writing the check. It's apparent that the prosecuting attorney has either little knowledge of the process, or more likely, he chooses to ignore it. As I'm mainly preaching to the choir, I'll not further elaborate this point beyond commenting that he shows no working concept of commerce in general.

One of the ambulance chaser's claims was that sellers are forced to pay 6% commission when selling their home. Apparently, he has never heard of FSBO transactions, or the value lost by sellers who go that route. But let's explore the 6% statement and his assertion that the value added is much less. Brokers/agents do something, as we all know. 

The biggest purchase most Americans make is their home. Second is their car, and I just bought one. The price was around $50,000 with the commission to the salesperson undisclosed, but the price wasn't really $50,000, plus commission to the state of MN -- $53,437 plus "closing costs" that include dealer prep, license and registration . I paid that amount, not the seller, even though he sent the money to the state as a "service" to me.  What did MN do to "earn" that commission? Nothing other than demand payment. It could be argued that the money collected went to support the state and help unfortunate people, build new roads and electric trains, etc. Well, 20-50% or more of the commission paid to real estate brokers/agents also goes to those noble endeavors too in the form of taxes (government charged "commissions").  

Back to my $53,437 car (almost $56,000 after "closing costs"). Was the dealer forced to pay 6.875% commission to the state, or was I forced to pay? I agreed to the terms, but I could have tried to negotiate a lower price. That's simply how commerce works, and there is at least one lawyer who claims he can't figure it out. Does anyone else wonder whether he negotiated a lower commission for his services?

 

Posted by

 Mike Carlier  Lakeville, MN

 

612-916-3033

 

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