The Economist view on traditional agents: “the realtor rip-off”

June 13th, 2012 by Claire

Why IS it so expensive to buy or sell a house in America?  We agree, people of The Economist.

If you’re in a particularly feisty mood, take a scroll through some of the comments…

Buying or Selling a Home with a Real Estate Agent: How They “Earn” Their Commission

February 22nd, 2011 by Marc

I came across an interesting tidbit in the Realty Times, a web site devoted to providing “consumers and industry professionals with helpful, informative news and advice.” The article educates agents on how they can “push back” against downward pressure on their commission, whether buying or selling. Apparently, “prospects” (the industry term for somebody thinking of hiring an agent) try to negotiate a lower commission because of “fear.” If the agent can address that fear — which may have one or more causes — then the agent will more likely get the “full” commission. (more…)

It’s Official: WaLaw Realty is a “Game Changer”

January 26th, 2010 by Marc

There was an interesting piece in Seattle Magazine regarding FindWell, Redfin, and changes in the RE industry generally. As you may know, both FindWell and Redfin rely on a robust web presence (primarily a search engine) PLUS a deeply discounted commission (about one half back to a buyer) as their business model. As noted by the author, this “alternative” model has yet to revolutionize the industry as some thought would happen, in large part because, when push comes to shove, EVERYONE still relies on the commission, the only issue being how big.

Of course, WaLaw is certainly not “everyone.” We are the true game-changing model, in that we charge a flat fee for the transaction. Hey, we work hard for everybody, not just those buying a seven figure house. Why should we be paid so much more for an expensive transaction? We don’t think we should. Plus, as the article notes, a commisison creates an inherent conflict of interest, particularly from the buyer’s perspective. The buyer wants to pay as little as possible, but the agent gets paid based on the price so the agent has a disincentive to negotiate aggresively.

On top of that — and unmentioned in the article — what happens if the buyer decides to not close at the last minute? I think its safe to say that the vast majority of agents would encourage the buyer to close, because no close = no pay. On a flat fee model, the attorney is not invested in the outcome at all and is happy to go in whatever direction you want.

So if you want “new and improved” go with WaLaw, not one of those other “alternatives” that really aren’t all that different.