Hi Peter,
Just a few points for clarification:
By the way my name is Lyle, not Lynn.
Don't get me wrong; I love the label ?discount broker.? While it is not an accurate label, it does attract business. Discount is no longer a dirty word.
I do agree that your original article was not a thundering defense of the status quo. While it may have been intended as a look at the real world, it misses the mark on why it works the way it does. It works the way it does for the most part due to real estate agents having control over the dissemination of information through their powerful proprietary MLS. Through REALTOR.com and now their partner, HOMESTORE.com, the control of this information remains in the hands of the agents, thus assuring high commissions are safe (for the time being).
I'm not attacking the control of this information. I just want to point out that it is that control which allows the agents to charge the high commissions, not trust and competence trumping price.
You state "Surely 130 franchisee, many with significant marketplace impact, mean that consumers have a choice, that discount services are widely available, and that your ability to compete is not constrained." You are correct; my ability to compete is not constrained. I never claimed it was. We are however several hundred if not a few thousand offices away from consumers having discounted services (commission) widely available. By the way, I do not see any of the current web players having a model that is likely to have much impact against the status quo.
You state "you surely recognize that commission rates are influenced by a range of factors, including marketplace competition, interest rates, local economic changes, company size, etc." The influence of the factors you have outlined, in a free marketplace surely would impact fees. That is just not the case with the real estate industry. I will bet that in the majority of markets you will find that these factors little, if any, impact on fees.
The "real world" of real estate, the world I have lived in for 26 years, is a place where real estate agents get high commissions not because of their superior marketing, expertise, knowledge, skills, competence and trust, but because essentially all agents charge the same commission. They may attract the business with the previous, but it has no relationship with the fee the seller pays. If an agent steps out of line and offers lower fees they move from their former status of "competent fellow agent" to someone "people should beware of."
You get what you pay for, right? Or do you? I would challenge that home sellers rarely get what they pay for. They are subsidizing a highly inefficient industry, where half the homes fail to sell on the first go around due to agents ?buying? over-priced listings. I could go on about the many inefficiencies but I?ll spare you.
The current methods for marketing homes are archaic. I'm not arrogant enough to pretend that the current Assist-2-Sell method is the answer. We are just working the best we can with the tools we have. The way we do our business in the next few years will differ greatly from the way we do it today. The tools available are changing. While the Internet will play a big part, it will not eliminate the need for the real estate professional. I see a future where we won't need a million plus agents selling an average of less than 3 houses per year each. While NAR membership may not yet have dropped in the last ten years, it certainly has not grown significantly in the last 20.
It's been fun, the best to you as well.
LYLE
Lyle Martin
www.assist2sell.com
Lyle@assist2sell.com
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