No more default commissions? No sweat, says one luxury real estate agent
Many real estate agents already were struggling to get by in a housing market plagued by high prices and low inventory. Now a proposed settlement in litigation accusing the National Association of Realtors of artificially inflating commissions threatens to forever change the way they make money.
The settlement would do away with a 6 percent sales commission as a default, a longtime fixture of home sales. Experts say that could mean lower costs for home buyers, but also changed business strategies for real estate agents, who suddenly would have to charge whatever the market will bear.
The free-for-all is widely expected to drive commissions down and force many agents out of business. But others say they think the increased transparency will help.
Among them is Michael Reisor, a luxury real estate agent in Austin, who typically handles homes worth more than $3 million. Reisor leads the Texas division of the Eklund Gomes Team, a national group that sold $3.7 billion worth in homes nationwide last year.
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Q: How will the ruling affect your business?
A: I ultimately think that it doesn’t overall. But it does put the emphasis on what we always felt was most important: you have to be showing value to your clients, and you have to be providing exceptional service and communication constantly. And nobody should be paying for a service if they don’t feel that there’s value there. [You need] constant dialogue, constant communication about marketing strategies, constant communication about feedback on their home - showing how and why your marketing is different than others. We’re not a “put it on the MLS [Multiple Listing Service] and hope for the best.” We want to put your home in front of the relevant buyers in all of these different markets.
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Q: I assume you use the...