One year after the National Association of Realtors agreed, as part of a legal settlement, to change a key rule on real estate commissions — a rule that had long upheld a tradition of commissions between 5 and 6 percent, little has changed.
What was hailed as a watershed has so far produced a mere drizzle.
Some economists predicted the rule change would upend the business model and bring competition to a long-stilted marketplace, breaking the standard 6 percent rate — one of the highest rates in the world — and forcing down home prices as a result.
Though average commissions appear to be slipping, industry watchdogs say that Realtors and their brokerages have used workarounds and pressure on sellers like Mr. Chambers to subvert the settlement. So far, they’re finding success.
“The industry understood the threat to 5 or 6 percent rates right away, so looked for opportunities to discourage negotiation,” said Stephen Brobeck, a senior fellow at the Washington, D.C.-based Consumer Policy Center, who has been vocal about the need for greater consumer awareness in the real estate industry.
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I’ll state the obvious.
Redfin tried the discount brokerage for 20 years, and lost money straight through. They had to sell themselves off just to survive.
What does that tell you?
1. The realtor teams offer a much-superior service even though the cost is higher.
2. The realtor cartel is rock solid.
It is both.