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Does REA percentage fee make sense?

Posted by tilenut (My Page) on
Tue, Dec 2, 08 at 21:48

Back in the last millenium, when real estate fees as a percentage of home sales were developed, a seller of a $40,000 home could probably afford more than the $35,000 home seller. But the fee difference amounted to just hundreds of dollars. Nowadays, with home pricing running from under $100,000 to many millions, how can we justify the same system? Does it really cost more time and effort to sell a $800,000 home compared to a $200,000? The overhead remains the same. Okay, throw in a bit more for advertising. This still doesn't justify tens of thousands of dollars in fee differential. In fact,I would think that the less expensive homes have more maintenance and other problems, making a sale more difficult.
I think it's time for a change.


Follow-Up Postings:

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RE: Does REA percentage fee make sense?

Knock yourself out if you think of a way to make it happen :-). Those high end places are larger, and do need a bit more attention and explanation of finishes, space, etc., but a percentage is a percentage, whether or not we like it.


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RE: Does REA percentage fee make sense?

I'm looking at a glossy 3 page ad of a multi million $ property auction. The buyer premium is 7.5%, if an agent brings a buyer, add another 3% on top of that.
I'd say a listing of this property at 5% (3+2% listingside), sounds reasonable to me.


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RE: Does REA percentage fee make sense?

Tilenut, check the archives. You'll find lots to read.


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RE: Does REA percentage fee make sense?

Susan,
Yes, I've been reading the archives, and have found interesting conversations about different fees in different areas, relative merits of FSBO, etc, but haven't found a thread on this topic specifcally, that is the need for change based on the huge impact of the internet and widely varying home prices. Or maybe it's out there and I've missed it.


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RE: Does REA percentage fee make sense?

Okay, need to eat my words. Just read the "Goldilocks" thread, an the topic is discussed, sort of.


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