It seems intuitively obvious when so many people are struggling to get back to even on their house, and the economy so tough, flat fee and limited service will continue to be popular model. Ines comment that if she wants to go the $300 restaurant it is her choice is 100% correct. As fewer consumers make that choice many of those restaurants are struggling in this economy, not unlike some of our high end Realtors.

Another model popular here in Charlotte on the high end, is to only charge 1.5-2% on the list side, but have the Seller pay certain print and video costs a la carte and pay the vendor directly. This too makes sense. .

Has anyone tried a sliding commission, for example 6% the first 2 months, 5% the next 2 month and 4% from there on out? Keeping the buy side at 3%. It seems this would pay Agents to make their price cases more forcefully, to get it priced right the first time, and recognize and pay for the skill and hard work of a quick sale in this market.
Any Takers?

NEW YORK – Don’t be shy about haggling over what you pay your real estate agent.

A study released Monday by Consumer Reports found 71 percent of sellers who negotiated for lower commissions with their brokers were successful. But only 46 percent of sellers surveyed tried.

Those who paid commissions of 3 percent were just as satisfied with their broker’s performance as those who paid 6 percent, the study found.
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The lesson? Haggling won’t hurt.

In fact, those who paid higher commissions were more likely to have regrets about the selling experience. Nearly one-third of them said they should have been more aggressive in negotiating a fee.

Sellers were most likely to get lower fees from independent and RE/MAX brokers, said Mark Kotkin, director of survey research at Consumer Reports.

“But they will all negotiate. Just ask for it,” he said. “It’s like buying a car. A lot of people think (the price) is set, but it’s not.”

Independent brokers may be more likely to negotiate fees since they keep their entire commission, while those who work for other brokers typically split commissions with the broker in exchange for marketing and office support.

About half the home sellers surveyed paid less than 6 percent in commission. The study is being published in Consumer Reports’ September issue. The issue also includes tips on which home improvements provide the biggest pay off.

Talk it out

Consumer Reports found few differences among the major real-estate companies in overall performance. There were slight differences in companies’ willingness to negotiate on commissions when asked, however.

Here’s a look at the percentage of sellers who got lower commissions from certain companies:

77 percent — RE/MAX Realty
76 percent — Independent agents
70 percent — Other companies
67 percent — Century 21 Real Estate
67 percent — Keller Williams Realty
67 percent — Prudential
64 percent — Coldwell Banker
Source: Consumer Reports
The study found no significant gap in services for those who paid lower commissions. For example, 81 percent who paid 3 percent or less said the agent gave a competitive market analysis of their home, compared with 87 percent of people who paid 6 percent or more.

Mike Wright, managing broker at Prudential Georgia Realty, said a seller has a much better chance of negotiating a lower commission when the house is in good condition and priced aggressively.

Such houses sell faster, meaning the agent has to spend less money on marketing the home.

“If I could sell a house in two weeks rather than six months, I’d be more willing to negotiate,” Wright said.

When looking for an agent, Consumer Reports suggests asking around for recommendations and interviewing multiple candidates.

Agents should clearly explain how they plan to market your home and handle open houses and newspaper and Internet advertising.

Among five major real-estate companies, RE/MAX agents agreed to lower commissions most often when asked, at 77 percent. That was compared to 64 percent for Coldwell Banker agents.

“Real estate commissions are determined between the sellers and their agents, but the best advice I can give home sellers is that it is far more important to focus on an agent’s performance, especially in today’s housing market,” said Alex Perriello, president & CEO, Realogy Franchise Group, the parent company of Coldwell Banker and Century 21 Real Estate.

Most respondents to the Consumer Reports study said they found service from the larger real estate chains and independent brokers to be “very satisfying.”

The survey was based on 9,141 responses to the Consumer Reports National Research Center’s Annual Questionnaire about selling or trying to sell homes from 2004 to 2007. Despite the shift in the housing market in that time span, Kotkin said there was no significant difference in the outcomes by year.

Of those surveyed, 86 percent of people who put their homes on the market made a sale.

I’m not against the model. I’m against the argument that we … that I … must change to survive. That’s simply not true. Again, promote your value proposition (as you’ve done) so you become the consumer’s choice, not simply the less expensive lesser of two evils.