Their are two "option" changes that have and will continue to occur over the coming months. One option shift is indeed the fee for service option in addition to the more traditional percentage contingency. The consumer will be better able to define how much of a risk taker they are in the biggest financial transaction of their life. A higher risk taker may opt for fee for service, whereas a risk averter may continue with the traditional percentage contingency model. Compounding this decision will be the available time, savvy (intelligence), and internet resources available to the consumer. Remember, a seller may be unwilling to shell out up front fees and hourly pay when there is no guarantee of success, especially when the seller may have unrealistic expectations about the value of their home. The second point is the resistance to eliminating the double dip in the brokerage business model. Fee for services are no doubt happening, and will continue to grow, but many agents are wary about asking the sellers and buyers whether they want "fries with their transaction!" In other words, the dumbing down of agency by NAR and the reduction of liability by re-naming dual agency "transaction, facilitator, or designated agency" will further erode NAR membership. Interestingly though, I predicted in a article in 1996 that the emergence of Exclusive Seller Representation would further erode the market share of the "trads." I've already helped buyer-clients buy on a hourly fee basis with an upfront minimum retainer. These clients are more educated and have done most if not all of the searching and background investigation on the local county auditor's web site for comps, etc. The traditional percentage fee (less the fees owed to me) was then returned to the buyer. I made $1,500 for 6 hours work, and they received over $5,000. Remember, when you have a stated compensation plan agreed to in writing, then any payment from a broker, builder, or fsbo is allowed to be returned to the buyer-client. Finally, it is the listing side who will take the biggest "hit" and not the buyer side. People will still pay for quality services, and True Exclusive Buyer AND Seller Agencies will be all that's standing, alongside the internet "McDonalds" vendors!

Back to Previous Post Printer Friendly Version | E-mail This Article to a Friend