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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: ild who wrote (14538)	10/26/2003 6:11:13 PM
From: bobby is sleepless in seattle	Respond to of 306849

Commissions are already on their way down. 6% standard, if there is such a thing, is a thing of the past. What I see is a fallout in the business. Many folks gravitated toward this industry (remember on line trading!) because it was/is hot and throw in a tough job market offering less opportunity outside of this industry. It's packed with folks that just don't get it and never will. Firm in Seattle? Nope. Sellers are willing to pay for what they perceive in return. Unlike on line trading, this is still a people business and the warm and fuzzy stuff is important. Commissions paid is not the single driving force for buyer/sellers. But don't get me wrong, it is part of the equation when choosing a broker, not necessarily the most important one.

To: ild who wrote (14538)	10/27/2003 10:52:13 AM
From: Tradelite	Respond to of 306849

<<eventually RE market will cool down (in terms of annual sales) and the commissions will go down (per cent wise) as well because of increased competition>> If the past is any guide to the future, the opposite scenario will be true. The little firms which crop up and can do OK in a great market due to high volume will soon find their business drying up. Concerned sellers won't be looking for second-rate companies to handle the sale of their homes. They will want big-time service and will be expecting it---it could take months to sell their home, and by golly, they want someone to do the open houses and all the ads. Agents will be working harder to sell each house. Buyers will take days to negotiate price, instead of minutes, because they will be able to in a slower sales environment--and they won't want any less-experienced, second-rate negotiators working for them, either. Small companies will go out of business. Many agents will drop out of the business. The companies and agents that remain will join forces with one of the many big brokerage firms which can provide better advertising and agent support services. And the big brokers will be able to charge how much?.......take a wild guess. That's what happens in every real estate downturn. The big and strong get bigger and stronger. The little guys jump ship. I worked for a big firm that continually acquires little firms in our market, especially in tougher times and even in good times. They seek out that firm, the firm doesn't look for them. Recently, almost one whole office in my town, which was owned by a big broker whose name everyone knows, left enmasse and became just one more of hundreds of offices owned by my former broker. Now there are two offices of the same company located within two blocks of each other. And gee whiz, times haven't even gotten tough, yet. No different than the consolidation we will see in the mortgage industry as refis dry up.