Selling any residential property (house or apartment) is far from a fun process. Right down there with selling one’s car. (I think the process of buying a house is much more fun than buying a car BTW). Since my wife and I have put our house ‘up on the market’ we have experienced all the things that are associated. Overlay a ‘down’ real-estate market and what you are left with is a daily exercise in frustration.
Remember Foxton’s from a few years ago – the home of the 2% real estate broker commission? They did not make it and went out of business in 2007. There are a few sites out there that promote only a 2% commission but they do not appear to have much traction. So the traditional real estate broker is the option if you choose not to sell your house directly (good luck with that we are told).
There aren’t nearly as many real estate brokers around today as there were 5 years ago. A crushing recession and horrible real estate market are the reasons for that. Back in the late 1990’s and early 2000’s it seemed everyone around me knew someone who was obtaining their real estate license. After all – 6% (now down to 4-5%) commission on homes offered a pretty nice payday – especially if you were selling homes in the more expensive areas of the United States.
Today the overall real estate market remains stagnant at best. It’s a buyer’s market as they say. And real estate brokers have no way to create buyers. There’s too much inventory, too many choices and anyone selling a house or apartment has to be ready to drop their price, possibly below what they paid for it, if they’ve lived in the house for less than ten years.
In our case we’ve been asked to make some ‘minor’ improvements (translate that to spending money for someone else to enjoy). And yes we’ve already been asked to drop the price which is the normal course of doing business my wife and I understand. Yet it irks me that a $50,000 price reduction only reduces the broker’s 5% commission by $ 2,500 yet the seller is still down a full $50,000. It’s easy to understand why a real estate broker would suggest lowering the price since the broker will feel little of that sting.
Everyone is aware that real estate markets ebb and flow – right now we are in a buyer’s market and have been for some time. When my wife and I sold another house in the late 1990’s it was a seller’s market and we actually had multiple bids and the house was sold (in a week) for more than the asking price. I readily admit that the pendulum can swing both ways.
But I cannot help thinking there’s a big idea opportunity here. Real estate brokers serve buyers more than they do sellers. There are ‘buyer’s brokers’ and related fees to engage them. I think that is a concept that should be explored even further. A buyer’s broker serves the purchaser in many ways with information on the area, schools, market conditions, local resources as well as can help the buyer understand and get the purchase for the best possible price.
But overall the process of buying and selling residential properties has changed little over the past 50+ years. While the MLS (Multiple Listing Service) has made an impact and online viewing of properties is cool, the actual process has not really changed.
I’m going to think more about how that might be altered and if you have any interesting thoughts or ideas please share them.