Real estate brokers and salespeople are divided over whether the Internet is driving down real estate commissions, according to an informal survey of Inman News readers. The Internet is a scapegoat for other market factors that are driving down commissions, said one respondent, while another said consumers’ Internet research is educating them to negotiate lower commissions with realty agents.

In response to the question: “Is the Internet driving down real estate commissions?” about 38 percent of participants answered “Yes,” an equal percentage answered “No” and 11 percent answered “Not sure.” The remainder weighed in with specific comments on the issue.

“Competition is driving down commissions. The Internet is just a good scapegoat,” said one respondent.

Another offered, “More owners are able to sell their property without the help of a broker because of the Internet. So, ultimately it drives down total commissions that would be paid.”

Survey respondents said discount brokers, rising home prices, the economy, housing market conditions and for-sale-by-owner trends, among other factors, contribute more to lower commissions than the Internet does.

“(The Internet) is not lowering the total commission, it is just dividing the commission between more players,” said one participant.

“Commission pressure is primarily from discount brokers. I do not hear from clients or prospects that they expect lower commissions because of the Internet,” another said.

But another respondent argued: “If for no other reason, the Internet is contributing to the decline of real estate commissions because buyers and sellers can log on to numerous sites and see reference after reference urging consumers to negotiate commissions with their real estate agents (almost making them feel stupid if they don’t negotiate to pay a lower commission). In my experience, a few years ago sellers rarely asked if commissions could be reduced. Today, almost everyone wants to negotiate the real estate commission.”

Other agents said the Internet is a valuable tool for brokers that can add value to their services.

“I use the Internet to get business that earns me big commissions. Brokers who want to drive me off the Internet deserve to go out of business for being lazy and poor marketers,” one real estate practitioner commented. “Real estate desperately needs more innovation, not less of it. I add value to my service using the Internet and get all of my business from it.”

And another respondent said, “The Internet is really a benefit and tool that I use quite extensively. We are creating the problems we have for ourselves, it’s not the Internet.”

Ultimately, said one survey respondent, an agent’s worth is in his or her ability to guide people through the finer points of the home-sale transaction.

“Consumers don’t need us for the marketing, which is what most agents and discounters push. They need us to navigate the closing and negotiate the details of the transaction. A monkey can put up a ‘for sale’ sign. But the monkey can’t handle the details. And make no mistake…the devil is in the details,” the respondent wrote.

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Send tips or a Letter to the Editor to glenn@inman.com or call (510) 658-9252, ext. 137.

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