Don't devalue real estate services

Re: '6 percent is dead' (Feb. 16)

Dear Editor:

I agree that charging a flat fee for some services would be a big step forward. However, let's keep in mind that some professionals are always worth more.

Why do some certified public accountants, doctors and attorneys charge more than others for the same service? Because they are worth it.

In a $1 million real estate transaction, the buyer and seller are exposed to significantly more risk than the buyer and seller (and agents) in a $300,000 transaction.

It is the agents' job to see that the contract is completed accurately and keep an eye on the contingencies and timelines to minimize the risk of the contract ending up in court. The agents also need to know when to refer their client to a tax or law professional (some do, some don't). You get what you pay for.

Bob Couture
Associate broker
George W. Johnson Realtors
Seattle, Wash.

Dear Editor:

One of the reasons I went out and started my own company is because of this "6 percent or nothing" mentality. I saw the irony in the situation at my old brokerage, where we were never allowed to negotiate commissions.

I work with many business professionals and repeat clients, and focus on high-end properties. Earlier in my career I was asked over and over again to do more or less for a client, yet the fee set by my broker was a flat rate. When I did try to negotiate, I was reprimanded.

At my company, we have a set fee we ask for from sellers: a percentage. But if a seller asks us to do MORE than we normally do, the fee is higher. If a seller asks us to do LESS (an attorney is preparing the documents, etc.), then they are charged less. I work with builder clients and have built up a niche where I list their homes for a flat fee (and do limited work). There is no cookie-cutter seller (or at least there are very few). Why should you NOT get paid more for more work, and less for less work?

This argument seems like heresy in traditional brokerages. Yet it's logical to me.

Erica Ramus
Broker, Realty Executives
Pottsville, Pa.

Dear Editor:

If 6 percent is dead, no one will list homes under $300,000.

It won't make financial sense. A certain amount of work goes into each listing between marketing, time spent showing, meeting repair people, etc. It's as simple as that. Unfortunately, they are the people that need help most.

Kathy Kershner
Broker
Coldwell Banker Barbara Sue Seal Properties
Portland, Ore.

Dear Editor:

I've never replied to an online article (or any other for that matter) before, but Mr. Longo's statement about the National Association of Realtors is so outrageously ludicrous I feel compelled to respond.

Mr. Longo's very important misstatement seems to be the basis of his whole article. Here is a quote: "Most likely the value would be different for every agent in the marketplace -- certainly every brokerage operation. Then the market would determine the cost of the service, rather than a huge association like the National Association of Realtors or the history and longevity of a particular structure."

If Mr. Longo truly believes that the National Association of Realtors sets our commission structure, he is extremely ignorant of our industry. Even non-Realtor licensees should know that it is a violation of federal antitrust laws for even two real estate brokers or agents to discuss the fixing of commission rates, much less for an entire association governing a million brokers and agents to do so. I can't believe the Mr. Longo even holds a real estate license when he makes this statement.

I've been in the real estate business for 26 years in two different states, both as a broker and an agent. I've charged everywhere from 1 percent to help a buyer and seller (after they've found each other on their own) with all of their paperwork and follow-up to as much as 10 percent on vacant land sales.

For single-family homes, I've charged anywhere from 4 percent to 7 percent, depending on the price of the home and negotiations with the seller.

The market has ALWAYS determined what commission rate we charge. If the marketplace didn't dictate our commission, we wouldn't have to spend so much time and effort justifying our commission to the seller during a listing presentation that takes hours to prepare properly.

Ron Pearce
Century 21 Aztec & Associates
Port Charlotte, Fla.

Dear Editor:

I read your article on the way commissions have been structured in our business, implying the need for change from the standard 6 percent.

I think some good ideas were expressed in the article. I sell in the Southern California area where the median price is still around $400,000. My idea to ease the pain for sellers paying high-dollar-amount commissions would be to set up a graduated scale.

Say, for example, something like 6 percent for a $500,000-or-less property, 5 percent for a property valued at up to $1 million, 4 percent for anything above $1 million. This could be a good marketing technique for listing agents trying to break into the higher-priced properties.

Don Valantine
Coldwell Banker
Valencia, Calif.

Dear Editor:

Of course an Internet cut-rate broker would say that 6 percent is dead. It is dead -- if you aren't charging 7 percent you are losing business.

I charge 7 percent on all of my listings to be able to offer a larger commission across the multiple listing service. The discount companies are losing showings and sales by charging less and placing a smaller commission across the MLS.

When agents are commission-based, they look for houses that offer the best commission. In really tough times I charge 8 percent to ensure the home is sold, not just listed for sale.

Ken Boyle
C21 At The Rockies
St. George, Utah

Dear Editor:

While I have no doubt that real estate will continue to evolve, this is almost sounding like (some earlier predictions that) the Internet will make the Realtor obsolete. I am still waiting for that to happen.

The percentage commission will continue to thrive no matter what new technology or media source continues to say differently. For those who make ridiculous statements -- such as the same work goes into selling a million-dollar home as a $10,000 home -- either never worked in the industry or weren't very successful at it.

Frank Pixley
Principal broker
Charlotte, N.C.

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