The comment simply added an international flavor to what has become an ongoing wrestling match about real estate commissions.

Simon Baker, a successful Australia-based publisher of real estate information who is now managing director and chief executive of Ltd., a Web site posting property listings in several countries, was part of panel discussing how and where high-net-worth individuals were purchasing real estate around the globe.

Many high-end agents based in the United States had explained how they had contacts and clients in foreign countries — Russians, Germans, Italians, Japanese — who had come to the United States and bought expensive homes and apartments.

“But if you have a U.S. client looking to buy a second or third home abroad, don’t expect to receive a commission or a referral fee,” Baker said. “Commissions are a lot lower in other parts of the world. They are 1.75 percent in the U.K., 2.2 percent in Austria, about 2.5 percent in New Zealand. Nobody gets as much as you get here, so enjoy it while you’ve got it.”

Ah, commissions. If you want to tweak some tender nerves, bring up the subject with friends in the business. The debate on commission fees has been going on for decades.

By law, all commissions are negotiable in the United States, yet it’s been common practice for real estate representatives to receive a 6 percent commission on the sale of residential property for homes priced $300,000 and less in many of the country’s markets. Of that total, the selling side receives a 3 percent commission on the sales price and the buying side receives 3 percent. (Years ago, the selling side received two-thirds and the buying side one-third). Some traditional companies have reduced their commissions, and others introduced a “discounted fee” structure, while a few have gone to a “menu” or “a la carte” system.

Seven years ago, when Gomez, a research firm specializing in the measurement of customer experiences, released a study showing that online consumers wanted better service and lower fees and were willing to take a more active role in the home buying and selling process, Realtors first began to consider a menu or a la carte approach to the sales process.

Richard Mendenhall, then president of NAR and perhaps the strongest leader ever to guide the country’s largest trade association, was asked to comment on the Gomez report.

“What will drive the change?” Mendenhall responded. “I think you will see the market dictate change. If Realtors can execute more deals in the new model, then they will move to that model.”

Companies such as Redfin have a new model. The Redfin model is aimed at computer-oriented professionals who know how to search their desired neighborhoods online and have an idea of the type of home they would like to own. Once a home is targeted, customers visit open houses, and then contact Redfin when they are ready to write an offer through the company’s “online wizard.” A Redfin agent then contacts the listing agent to ascertain the seller’s needs and expectations, then critiques the offer and negotiates with the seller’s agent.

If the deal is accepted, Redfin says its agents stay in the loop via telephone, coordinating the appraisal and inspection plus escrow and title insurance services. It’s this portion of the transaction — after the purchase and sale agreement is signed — that has drawn the attention of traditional agents. Many of them feel that discount brokers disappear once the contract is “signed all around,” leaving the listing agent to perform all the chores needed until closing.

Where’s the answer? Somewhere in between. Consumers want to sit down at a table and write up a deal with an agent, face to face, and know that the agent will go to bat for them. Yet, many also want lower fees. A majority of consumers are opposed to the perception of being involved with a “discount broker,” while a niche could care less. Acceptable fee changes will come only from a well-defined real estate menu that includes face time. And, that menu will not be jump-started in a flat market — especially for domestic second homes.

To get even more valuable advice from Tom, visit his Second Home Center.

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