BrokerageIndustry News

Full-service discounter puts squeeze on commissions

Future-Proof: Navigate Threats, Seize Opportunities at ICNY 2018 | Jan 22-26 at the Marriott Marquis, Times Square, New York

(Part five of a five-part series. See parts 1, 2, 3 and 4.) Can a 2 percent commission model effectively compete against the traditional 6 percent model? Traditional brokerage in the Northeast is facing a new competitor that may very well reshape how real estate is conducted nationwide. If 4 percent commissions don't pencil using the traditional model, how can a 2 percent commission be profitable? Over the last three years, the folks at Foxtons have created a 2 percent model that is creating havoc for traditional 6 percent companies. Unlike other companies who cut services when they reduce commission, Foxtons is a "full service" company that provides excellent service, consistent lead follow-up, and extremely aggressive marketing for only a two percent commission. As agents, many of us do a poor job in handling our business. We have no business plan, we're not up to date on technology, and we don't like to prospect. Agents are notorious for not returning e-mails, not following up ...