More Fuel to the Fire

Jeff Corbett, The Xbroker gives us a particularly topical challenge today in his post; Traditional Real Estate Commission Structure, The 30,000,000,000 Problem.

He gives us a link to an abridged version of a paper (PDF) written for the Cornell Program in Real Estate by Mark Nadel, a Washington, D.C. attorney and policy advisor. The paper is titled  “A Critical Assessment of the Traditional Residential Real Estate Broker Commission Rate Structure” and offers a particularly scathing review of the current state of the industry.

Nadel's conclusion?

"The traditional, straight percentage-of-sale-price residential real estate brokerage commission does not serve the interests of either home buyers or sellers. Fees are unrelated to the quantity or quality of service provided by brokers and their agents. The rate structure creates little incentive for agents to provide the value-added services of which many are capable, and also produces some serious harms to buyers and sellers. The traditional commission rate structure has become structurally unsound and should be rebuilt."

The Xbroker asks us to

...take off your ‘business’ hat for a bit and put on your consumer shoes. Read the article objectively and find the opportunity to capitalize on what is probably the most comprehensive work of its kind.

Anyone want to take Jeff up on his challenge? Based on the article, is Nadel right or wrong? Sound off in the comments below.

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