Chipping Away At Realtors' Six Percent

Lesley Stahl Reports How Realtors' Commission Fees Are Under Assault

(CBS)  Editor’s Note: After our broadcast we heard from Stephen Cook, a Vice President of the National Association of Realtors. In his letter he said, "All real estate commissions are negotiable and the average is 5.1 percent, according to the most recent available data." That number came from an industry trade publication, REAL Trends, and was an estimate of average commissions charged by the nation's top 500 brokerages.

A critique of that survey, written by John C. Weicher, Director of the Hudson Institute's Center for Housing and Financial Markets, found REAL Trends' commission data limited by its focus on the largest brokerages and most expensive homes; the most likely situation in which agents charge a lower than 6 percent commission fee.

And, the Government Accountability Office – Congress' investigative arm – reported in a 2005 study that commission rates continued to be about 5 percent to 7 percent of a property's selling price "regardless of local market conditions, housing prices, or the cost or effort required to sell different properties."

Finally, in Cook's letter to us, he wrote, "The National Association of Realtors is a trade association and does not "govern" the real estate industry, and, there is no such thing as a national multiple listing service." In fact, there is no national Multiple Listing Service, instead according to the Justice Department, there are about 1000 multiple listing services, 80 percent controlled by members of the National Association of Realtors and governed by its policies.

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We reported in our story entitled, "6 Percent", that an Internet-based real estate company, ERealty, went "belly up." To be precise, ERealty was purchased by Prudential Real Estate Affiliates, at a loss of about $33 million to ERealty’s investors, according to one of those investors, Steve DelBianco.

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Even with today's housing slump, real estate agents will pull in about $60 billion this year. And the reason is, as any homeowner knows, they charge a six percent commission on the price of every house they sell. So, for instance, a home that goes for a half a million dollars will net agents $30,000 right off the top.

For realtors, the six percent commission is sacrosanct. It's remained in place, even as the price of homes has quadrupled over the past 25 years.

But as correspondent Lesley Stahl reports, things are beginning to change. What happened to travel agents, stock brokers and book sellers – the encroachment of the Internet – is beginning to affect real estate agents. And the sacred six percent is under assault from online discounters.

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Lehrer Willis and his fiancée Bridgette Takeuchi of Seattle, young and Internet savvy, took a big chance when they decided not to hire a traditional real estate agent. Instead, they both sold their old house and bought a new one online.

"What did you have to do yourselves that the traditional real estate agent would have done for you?" Stahl asks.

"Print out the flyers, you know, that would go on our signposts, and describe our house to potential buyers. And then we held an open house ourselves," Willis recalls.

What did they didn't get, says Takeuchi, was having a real estate agent to show the house and actively sell the property.

"Who’s out there, really pushing for us?" Stahl remarks.

"And that’s what I kept saying," Takeuchi acknowledges. "Those insecurities started to really seep in for me and I started to really question. It wasn’t until the ink was dry on the paper that I was a hundred percent sold, to be honest."

Willis says they saved $26,000 by not going through a traditional realtor and paying a commission. "Now we can walk down the aisle. Actually, pay for people to eat at the wedding," Takeuchi adds.

They used a real estate company called Redfin, an online discounter based in Seattle. It has a cadre of e-agents who, for the most part, do their work on computers and on phones. Rob McGarty says early on a number of people called who were skeptical about the whole idea.

"Are there real people there? Is this just some shop in Bangalore! A call center taking real estate transactions? And, you know, after they talked to us [they] realize we were real agents in the same city they were in … they were like: 'Whoa, this is for real!'" McGarty explains.

Willis and Takeuchi's agent, Kelly Engel, used to be a traditional agent. "I had done quite a few deals where I spent maybe five hours total working on the deal. I never saw the house. My client found it online and, you know, I would make $12,000 for four hours of work. And I thought this cannot keep going on like this. Someone, I felt like I was going to get caught! You know, someone’s going to see that this is happening and I think a lot of them hold that truth inside of them right now. They’ve got the clients that are finding houses on their own. They make $20,000 and did 10 hours of work," she says.

Glenn Kelman may look like a bike messenger, but he’s an Internet entrepreneur, the president and CEO of Redfin. "Real estate, by far, is the most screwed up industry in America," he says. "And we feel like things that Amazon or eBay or Yahoo have done of other industries, we can do for the real estate industry."

Because of the Internet, he says, his agents can handle many more transactions and charge the clients much less. "Because they didn’t have to sit in the back of a Lexus with a real estate agent, and use up all of this time, we’re able to pass on a lot of savings to them," he says.

And he does mean "a lot" of savings. Usually, a seller's agent and a buyer's agent split the commission, so they each get three percent. But when Redfin represents the seller, it charges a flat fee of just $3,000, and that’s it. That alone drives the traditional agents crazy. But then, when Redfin represents the buyers, they give them money back.

[pcalzadilla-2009]

Leslie has to check her facts, there is no "6%" commission rate, I have seen as low as 1% and as high as 10%, there is no standard rate - wake up and actually head out to see the commission rate - it is all about competition, the more competition there is the lower the commission is. Agents offering "full-service" are different than a partial service agent... if you pay a higher % than you should get more. The consumer knows what they are paying for. What you fail to mention in your report is that over 80%% of home sales involve a Realtor. For whatever % a broker offers, they offer the services they have - Redfin offers it piece by piece, other brokers give it all or nothing... it is a different way of doing business.

[jbbroadway]

I've always enjoyed 60 Minutes and it's reporting. That's why I'm so disappointed at the slanted, unresearched story you've done on the "6% commission". The average commission rate is far below your 6 percent example. You did say some commission rates are negotiated in a .5 second blur but did not relate the real cost of doing business as a Realtor. No attention was paid to the fact that most Realtors do not get to keep the entire commission. In fact, most agents keep approximately 60 percent of one half of the commission unless they list and sell the home themselves. One more unfortunate part of your piece was that you only interviewed one agent who didn't seem to have many of the answers to your questions that could have easily rolled off the tounges of many agents.

[donnyp99]

It is to bad that you don't hear both sides of the story.

[pattyandmoo]

The danger in this story is that the consumer will think they can save money only to be unprotected. The "Realtor" in your story who said she spent 10 hours on a transaction without ever seeing the house is a disgrace to the definition of the word Realtor. No professional Realtor would close on a deal without seeing the house with the buyer or seeing the house before listing it. Furthermore, the people willing to gamble with the largest purchase in their lives by buying a house sight unseen are being grossly duped. A Realtor makes sure you get a home inspection, makes sure you are represented in negotiations, makes sure your home is marketed and not just on the web. My last listing was with a woman whose ex-husband died and she had to fly in from Texas to settle the estate. She left without even clearing out the entire contents of the house. With her permission, I hired a cleanout service, a window repairman and a company to clean the house and ready it for sale. Is Redfin or any other online realty company going to take on those responsibilities? Let me know when they do!
Patty Hartman, Realtor
Prudential Fox & Roach
Delaware

[ls6man]

I find it sickening that realtors are trying to justify their 6% comissions when just about every business you can name, including theirs (the selling of homes) has gotten easier as technolgy as increased. Maybe 30 years ago when they had to carry people around to view a home, go to the local courthouse to gather sales data, etc. somehow justified a 6% comisison..not to mention when housing hadn't quadroupled in some cases over the last 10 years...Yet today there is the 'net for shopping, emails for discussing info, online searches of courthouse records, etc. So why are we still paying 6%...simply because realtors are greedy and somehow "we" as a society have brushed it aside and just "caved in."

The bottom line in my opinion is EVERY other business is either regulated with respect to fees or has changed it's methods of doing business. I for one am 150% in favor of federal regulation limiting the sales comission to 3%-4%.

[aionnoia]

Just finished watching, and I'm shocked at the biased reporting of Stahl. Her body language alone is frightening... I know all Real Estate brokers are evil (but not as much as Lawyers or Reporters..), but it's amazing to see people lying with a straight face.Brokers who do NO WORK for the commission (where can I get THAT job?? The AVAERAGE real estate professional makes $35,000 per YEAR according to gov't figures..) $3000 to post my own photos and description on a website, with absolutely no other help?? And I STILL have to pay a 3% comission to the buyer's broker? I also noticed that buyers going through this comapny have to use their mortgages... so, it THAT where they get the profit?? I hope Leslie doesn't need to sell her home anytime soon..

[aionnoia]

Just finished watching, and I'm shocked at the biased reporting of Stahl. Her body language alone is frightening... I know all Real Estate brokers are evil (but not as much as Lawyers or Reporters..), but it's amazing to see people lying with a straight face.Brokers who do NO WORK for the commission (where can I get THAT job?? The AVAERAGE real estate professional makes $35,000 per YEAR according to gov't figures..) $3000 to post my own photos and description on a website, with absolutely no other help?? And I STILL have to pay a 3% comission to the buyer's broker? I also noticed that buyers going through this comapny have to use their mortgages... so, it THAT where they get the profit?? I hope Leslie doesn't need to sell her home anytime soon..

[mrhs84]

Didn't Prudential acquire eRealty in 2004. I would hardly call that going belly up. I'm surprised the Prudential realtor who posted comments didn't point that out.

[chingchiaw]

Finally! Great piece, Lesley. I hope Mr. Dobbs add this to his already abundant subjects of "The war on the middle class".

We see it too often from shows like 'flip the house' where often times with some minor cosmetic upgrades a house can double and triple in price in a snap of a finger with a help a 'appraiser' - REALTOR who will ROB 6 percent PROFIT from the sale!!!

It is just really sad to see all these foreclosure. Really, it should never happen in the first place. Home prices are just too inflated - and you know by WHO.

[sfarrell99]

As usual 60 Minutes only gets half of the story and does not accurately show both sides. The one Remax agent you had to discount (no punn intended) the actions of limited service firms did not do a very good job. It is easy to use the perfect closing that has no issues as an example. Many closings have issues with inspections, accurate surveys and questions at the closing table dealing with covenants and other issues. I should put you on the telephone with the limited service clients who call my agents or brokers to ask questions that their agent won't because it is not part of their agreement.

Next time try getting all the facts.


Scott Farrell
COO
Helen Adams Realty
Charlotte, NC

[nymommy-2009]

This story is riddled with misinformation. In the LI markert commissions have been 4%. The reason.. because the market was so hot Realtors didn't have to invest as much to sell and so we could afford to give up some of the commission. However, now the market is taking a downturn.. and guess what.. commissions are going up because as agents we have to spend more money to sell and more time. As for the discount e-listers.. I'm not worried because in the end online alone can't do what realtors do. We are the glue that keeps deals together.. deals that can very easily fall apart. For the discount amount they pay they won't get the follow up that's so desparately needed in a deal.Realtos utilize the net just as . In a market where in one town there can be over 200 homes on the market, all very similar in developed neighborhoods like Levittown, if your home is offering out more commission to the agents the agents are more apt to take them to that listing first thereby getting that home sold fast and for top market value.

[chingchiaw]

As always, nice work Lesley! This confirms what I have always believed. (Mr. Dobbs please add this to your topics of 'The war on the middle class').

I am always amazed by shows such as 'Flip the house' where often times with just some minor cosmetic upgrades a house would sell for double or triple its real value, of couse with the help of an 'appraiser' who often will be the REALTOR that will RIP 6 or more percent from the final sale!!! It's ridiculous to put it mildly. Some body of government should realy step up and regulate this industry.

It is just sad to see so many foreclosure due really to unrealistic and inflated prices.

[ycredotnet]

I can tell that many 'traditional' Realtors watched this segment and are now out here complaining that the word of better options for the consumer is spreading. The cheese has moved, the Internet is going to change this world in so many ways, right now it's our time to change. I would suggest that the folks that are "offended" by this new method for sellers to market their home check their motives. Are they really concerned for the customers? I look forward to the challenges and opportunities ahead as I continue to operate my discount brokerage in Florida. FYI: The MLS's day's are numbered too, keep an eye on Zillow - they are probably going to put all 850 MLS's in the US under in less than 5 years. It was a good report, fair and balanced:)

[eesposito1]

Dear Ms. Stahl:

Alas, again CBS news did not report accurately the facts about Realtors receiving a 6% commission. First of all, the commission rate charged by Realtors has always been negotiable.

The couple who supposedly saved $26,000 by not using a traditional Realtor should know that statistics from NAR show that for sale by owners received approximately 20-25% less for their homes by not using a full time professional Realtor.

How about the commissions charge by Insurance agents, Financial planners, and doctors and lawyers? Are these fees negotiable?

Tell the couple that SAVED $26,000 that maybe they acutally undersold their property.

And if you want furhter information, please check complaints against "I SOLD MY HOUSE.COM" by FDIC, State of Massachusetts and New Hampshire and HUD.

Gee, I wonder if it's because they too are tied into a mortgage company doing business as East-West mortgage.

Ernie Esposito
RE/MAX

[aionnoia]

chingchiaw, While I'm sure either your heart is in the right place, or you think you were screwed by a Realtor.. You need to get your facts as staight as Leslie does. Realtors are not responsible for the current forclosures, mortgage brokers who loaned money to unqualified people are. Brokers and Appraisers are 2 different things, both requiring different education and licensing from the individual state, and no broker in their right mind would EVER appraise their own sales, thats why the bank comes in and appraises the property prior to approving the loan....
If someone wants to pay upfront to (hopefully) sell their property, God bless them.. the other 97% of the population will make sure a professional does the job..

[eesposito1]

Dear Ms. Stahl:

Alas, again disappointed that CBS news did not report accurately the facts about Realtors receiving a 6% commission. First of all, the commission rate charged by Realtors has always been negotiable.

The couple who supposedly saved $26,000 by not using a traditional Realtor should know that statistics from NAR show that for sale by owners received approximately 20-25% less for their homes by not using a full time professional Realtor.

How about the commissions charge by Insurance agents, Financial planners, and doctors and lawyers? Are these fees negotiable?

Tell the couple that SAVED $26,000 that maybe they actually may have undersold their property.

And if you want further information, please check complaints against "I SOLD MY HOUSE.COM" by FDIC, State of Massachusetts and New Hampshire and HUD.

Gee, I wonder if it's because they too are tied into a mortgage company doing business as East-West mortgage.

Ernie Esposito
RE/MAX

[ycredotnet]

I disagree with ls6man's comments that the government should regulation commissions. The consumer is driving this change and the marketplace will determine the various percentages and fee structures based on their own needs and the local market offerings. I have no problem letting a seller know where our services stop and if they require more, then I can change to meet the demand or I will gladly refer them out to a trusted professional at a competitive rate. Please keep the government and the dept of justice out of this consumer driven change.

Phillip Jones, Broker
Your Choice Real Estate, Inc.
The Best Value in Real Estate!
151-18 College Drive
Orange Park, FL 32065
904-298-2679
www.ycre.net

[bensonnc1]

I am very disappointed at the one-sided story on Realtor commissions. This is still a capitalistic economy and prices are set at what the market will bear. In the Winston-Salem, NC market agencies charge as low as $360 (up front) to get you on the MLS to agencies that charge more than 6% and provide added services the client needs. Choose the service that fits your needs.

Discount firms have a place in our industry, but buyer beware. You get what you pay for. Also, who in their right mind would buy a house sight unseen?

Finally, your segment makes it sound like a REALTOR makes 6% on each sale. Statistically it is more like about 1% after splitting other REALTORS and the Brokerages.

[accurateop]

First of all the commission seller's pay is totally negotiable between them and their agent. Typically you get what you pay for. There are limited service brokers that charge some lesser percentages, and full service brokers that charge higher percentages. In the buyers market we are in now across the country it actually makes more sense to pay a bit on the higher side, unless sellers care to hire themselves, in which case they are not saving anything but paying themselves to do all the work. Some things to keep in mind are, if you list a property at $300,000 at 5% and take a $10000 reduction, versus listing with someone who is a professional negotiator at 6% what have you really gained? Agents who spend 20 hours working for their client and getting paid $20000 should get caught! It takes much longer than that to sell a home now days, and the marketing plan needs to be run more than just once. Typically people who try to represent themselves end up "saving" 1% to end up losing 5%, not a very good deal!

[ycredotnet]

I disagree with ls6man's comments that the government should regulation commissions. The consumer is driving this change and the marketplace will determine the various percentages and fee structures based on their own needs and the local market offerings. I have no problem letting a seller know where our services stop and if they require more, then I can change to meet the demand or I will gladly refer them out to a trusted professional at a competitive rate. Please keep the government and the dept of justice out of this consumer driven change.

Phillip Jones, Broker
Your Choice Real Estate, Inc.
The Best Value in Real Estate!
151-18 College Drive
Orange Park, FL 32065
904-298-2679
www.ycre.net

[nymommy-2009]

Um.. not a fair and balanced report.. Tell you what. I'm a gen x'r . I'm ALWAYS on the net. I research EVERYTHING I buy on the net...and I also market all my listings extensivley on the net because I know that people want to see homes othe net before they go out and look at homes. It saves everyone wasted time. Improperly marketed homes are homes that are NOT on the net. .. but.. you discount online brokers out there... you can't possibly keep deals together that could fall apart so very easily. Also.. I wouldn't buy a house without first going to see it.. touch it.. "kick the tires" and get it inspected. A hands on agent does hte "net" and in person. You need a combination of the two to be successful! And the story had SO MUCH MISINFORMATION! All those consumers out there will be hurt by such eroneous one sided reporting.

[ycredotnet]

I disagree with ls6man's comments that the government should regulation commissions. The consumer is driving this change and the marketplace will determine the various percentages and fee structures based on their own needs and the local market offerings. I have no problem letting a seller know where our services stop and if they require more, then I can change to meet the demand or I will gladly refer them out to a trusted professional at a competitive rate. Please keep the government and the dept of justice out of this consumer driven change.

Phillip Jones, Broker
Your Choice Real Estate, Inc.
The Best Value in Real Estate!
151-18 College Drive
Orange Park, FL 32065
904-298-2679
www.ycre.net

[andymar30092]

Ms. Stahl;
While many would like to believe that your report is factual; it is not:
1. Most realtors discount listing fees as competition amoung other agents has required them to in order to get listings. The 6% is the exception not the norm and the seller's choice. There is usually a good reason when a client is charged 6%. In Atlanta, my charge is $600 to list and $1,000 to close and that is a high rate. The buyer's agent gets the 3%, just like with the company you featured. Most agents will "rebate" the buyer's agent fee if the work justifies it.
2. The complaint that the NAR is against them is pure nonsense; they can join the NAR. What the NAR requires is that the client be given the full protection of a "Realtor" no matter what the fee is. That is their complaint as they are having a problem complying. Who do you think is right?
3. Where did you get your facts and why did you not research you obviously "anti-realtor" story. Your comparison to the brokerage industry forgot to mention the billions that private investors lost relying on internet shopping for advice.
Andrew Margolies
404 259 5181

[accurateop]

First of all the commission seller's pay is totally negotiable between them and their agent. Typically you get what you pay for. There are limited service brokers that charge some lesser percentages, and full service brokers that charge higher percentages. In the buyers market we are in now across the country it actually makes more sense to pay a bit on the higher side, unless sellers care to hire themselves, in which case they are not saving anything but paying themselves to do all the work. Some things to keep in mind are, if you list a property at $300,000 at 5% and take a $10000 reduction, versus listing with someone who is a professional negotiator at 6% what have you really gained? Agents who spend 20 hours working for their client and getting paid $20000 should get caught! It takes much longer than that to sell a home now days, and the marketing plan needs to be run more than just once. Typically people who try to represent themselves end up "saving" 1% to end up losing 5%, not a very good deal!

[aionnoia]

YCREdotCOM, it's not a NEW method of selling real estate, Foxton's and FSBO.com have been doing it for years (I know, because I always get the unsold homes after about 3 minths...) I checked out YOUR site.... for $450 you'll list me on the MLS, give me a sign AND a lockbox so strangers can come into my home with no supervision when I'm not there?? And I still have to pay you 1% up to $2500, and the other broker 3%??? Tell me again what I'm saving??
I do 55 transactions a year in Manhattan, New York (the ONLY area where the market is getting stronger, not weaker..), and I WORK for my income. My clients get TOP dollar for their homes. How much extra do you charge to get up from your desk and SHOW your listings???
How long do you require your clients to sign and exclusive??

[ls6man]

If I sell a home in my area of Virgina (Richmond)for the median housing price of $222,000 the 6% comission earned is $13320. Now let's say you are the listing agent and selling agent..so you get both splits..or the full 6%..Some of the local Remax offices pay their relators 95% comission and charge a desk fee of $1200 a month..So a realtor who receives the full 6% would make $12654 gross to sell this home..hardly a bad living ANYWHERE in the US..much less in Richmond with the average earnings at or around 40k a year..


So for MAYBE a solid 40 hours of dedicated total work over a 3 month period (avg lsiting contract) you make more in 1 traditional work week than others make in 480 hours??? And you are trying to STILL justify your comission?? The reality is the cats out the bag and there will be much more discussion on this topis and I would bet many changes coming..Yuo as a realtor can't expect to do business today with technolgy and housing prices where they are as you did in 1965...

[scottyhal]

If I understood this report correctly, by using the REDFIN company, could I potentially be 'represented' by an agent who has never seen the house, nor will see the house. How is this possible?

[jdecoux1]

I think it is a great idea. I myself pursued a career in real estate, but after seeing and hearing the reputation of real estate agents I didn't think it was ethical. However if I could help buyers and sellers instead of ripping them off, I would gladly be happy to sell real estate!Way to go Redfin! Can't wait to see you come to my area.

[smitola1]

You need to get your story straight-Realtors are not allowed to charge 6% commission-it is price fixing, and it is illegal! Did your legal department research this? You certainly made it clear that this is the way it is done all the time. Also, even in the best of markets, the hours I spend with my clients goes well beyond 10!! Would you like to see just how much time it takes to complete a transaction from start to finish?? I would be happy to have you shadow me through a typical transaction. This is the biggest investment a person (or family) can make. It takes great diligence to assure it comes to fruition. Can I also talk to you about the countless hours I (and many agents) spend only to realize a deal is not going to happen? Again, what a slanted view you presented. Lastly, my listings are on many on-line search sites-the more, the better for my clients. One thing that needs to be remembered is that the human element needs to be there to assure all goes according to plan.

Susan Mitola, Realtor
Keller Williams Realty

[politico3]

The level of collusion involved in the National Association of Realtors and their outright hostility to consumers' interests is quite shocking. Given all the facts, your report had a very light touch. The rationalizations presented by the realtors' trade association are pretty thin, yet were not directly challenged. Sure, many realtors probably feel slighted by the facts presented, but, they got off pretty light.

One question: Is caldwell banker a sponsor of 60 minutes? Your site says so. This is curious. Can you please post an explanation of when they became a sponsor and the amount of money CB has paid to CBS in advertising fees in the past 12 months?

[smitola1]

You need to get your story straight-Realtors are not allowed to charge 6% commission-it is price fixing, and it is illegal! Did your legal department research this? You certainly made it clear that this is the way it is done all the time. Also, even in the best of markets, the hours I spend with my clients goes well beyond 10!! Would you like to see just how much time it takes to complete a transaction from start to finish?? I would be happy to have you shadow me through a typical transaction. This is the biggest investment a person (or family) can make. It takes great diligence to assure it comes to fruition. Can I also talk to you about the countless hours I (and many agents) spend only to realize a deal is not going to happen? Again, what a slanted view you presented. Lastly, my listings are on many on-line search sites-the more, the better for my clients. One thing that needs to be remembered is that the human element needs to be there to assure all goes according to plan.

Susan Mitola, Realtor
Keller Williams Realty

[ycredotnet]

Aionnoia,

Thank you for your comments and for visiting our website. I trust you found it informative. To address your concerns; 1. We do not charge anything to show our listings. We will gladly show them to prospective buyers and make every effort to sell the home for them. If we are successful, we will earn the buyers agent co-op the seller offered when they signed up for MLS Assist. 2. The lock-box we offer in our $449 MLS Assist service is an Electronic Supra E-Key lock-box, only local Realtors have the ability to open it so the sellers home will remain secure at all times. Have a great day and best of luck with your business.

Regards,
Phillip Jones, Broker/Owner
Your Choice Real Estate, Inc.
The Best Value in Real Estate!
151-18 College Drive
Orange Park, FL 32065
904-298-2679
www.ycre.net

[politico3]

The level of collusion involved in the National Association of Realtors and their outright hostility to consumers' interests is quite shocking. Given all the facts, your report had a very light touch. The rationalizations presented by the realtors' trade association are pretty thin, yet were not directly challenged. Sure, many realtors probably feel slighted by the facts presented, but, they got off pretty light.

One question: Is caldwell banker a sponsor of 60 minutes? Your site says so. This is curious. Can you please post an explanation of when they became a sponsor and the amount of money CB has paid to CBS in advertising fees in the past 12 months?

[ohhreilly14]

While I am sure that there are hardworking agents, I have yet to meet one.

The only useful service that I have received from a realtor is her knowing the code to the lockbox. The flat, guaranteed commission rate gives the realtor no incentive to do her job.

One example: When I put my home up for sale, one realtor encouraged me to quote a lower price. I did research on comparables, took her to the homes that were on the market, and then justified my selling price to her. Using the Dummies guidebooks and articles from HGTV, I set up my home for display during the open house.

The result: I received 5 bids in the first weekend and sold it for $25,000 over the asking price.

There is so much information out there; the buyer's and seller's represent themselves best--it is, in fact, one of the largest investments we have. Why should we trust other people with it?

[bensonnc1]

Redfin has placed themselves in some of the most expensive real estate markets in the country and then boasts they can save you money. Shop Real Estate agencies and find the deal that is best for you.

[waldroa]

Bottom line the internet has broken the mold. The whole process is alot more efficent these days whether it is doing the research to properly market a home or searching for homes for buyer clients, most buyers these days come with homes in mind that THEY have researched on line. Efficencies bring cost savings and in a competitive world those savings can and should be passed on to the consumer, after all it is their equity and they should keep as much of their largest asset. I think Redfin is risky if you are not a very educated consumer but there is a middle ground where the agent can make a decent living and the consumer is not ripped off, my brokerage company in NC was founded and is doing very well based on this principle. The market has changed, change is good, the internet will see to it.

[shawnbpage]

I feel the choice you made in choosing Deborah Arends, a %u201Ctop%u201D Remax agent to represent the traditional model was poor and not representative of the traditional model. Certainly logic would dictate if you were going to have the CEO of the non-traditional model be heard, you would have countered that argument with someone who was also at the same level, perhaps the CEO of Remax Realty or a spokesperson for the National Association of Realtors, or at the very least the Managing Broker of the brokerage she worked for.
By my account you had 3 representatives and a pair of %u201Csatisfied clients%u201D for the Redfin side of the argument, but your representation of the traditional model only featured Ms. Arends point of view. Responsible journalism would have been equal coverage for each side, and your segment would have left your viewers with more answers than questions.

As a reputable news show you owe it the millions of Realtors to fairly represent their side of the argument. To portray us as greedy and money-hungry is not accurate as there are many of us out there who believe in integrity and serve our customers with their best interest in mind

[jdecoux1]

I think it is a great idea. I myself pursued a career in real estate, but after seeing and hearing the reputation of real estate agents I didn't think it was ethical. However if I could help buyers and sellers instead of ripping them off, I would gladly be happy to sell real estate!Way to go Redfin! Can't wait to see you come to my area.

[politico3]

The level of collusion involved in the National Association of Realtors and their outright hostility to consumers' interests is quite shocking. Given all the facts, your report had a very light touch. The rationalizations presented by the realtors' trade association are pretty thin, yet were not directly challenged. Sure, many realtors probably feel slighted by the facts presented, but, they got off pretty light.

One question: Is caldwell banker a sponsor of 60 minutes? Your site says so. This is curious. Can you please post an explanation of when they became a sponsor and the amount of money CB has paid to CBS in advertising fees in the past 12 months?

[bensonnc1]

I challenge anyone thinking REALTORS don't earn their commissions to get your license and start into the business. After my 80 hour week I spent Mother's Day showing a client homes. Most discount brokerage don't even answer their phones on Sunday.

John Robertson
Coldwell Banker Triad Realtors
Winston-Salem, NC

[robynkirk]

This piece was riddled with inaccuracies, those of us that have chosen to be Real Estate Brokers and Agents as our career field (as I am in two states), that are %u201Cprofessionals%u201D, would be offended of the portrayal of the traditional agent.
Firstly, the %u201CE%u201D agent that %u201Csaw the light%u201D and crossed over to the other side should have done so if she was conducting transactions and offering her clients a mere 4 hours of her time for 12K. If all we had to do was send a few emails and sit in front of a computer, I suppose we could charge less and offer our clients %u201CMcRealty Service%u201D.
Any professional agent knows the significance of being technologically savvy in today%u2019s market. In this age of internet anonymity; we can%u2019t rely on our computers to establish a rapport with the clients whose trust in us is paramount in creating a successful business relationship.
I work an average of 60 hours per week in order to offer my clients the level of service they deserve. We also can%u2019t forget the basic costs of running a brick and mortar business. On the issue of the %u201C6%u201D %. In most transactions there will be a minimum of 4 parties sharing the commission. Red Finn also handles the financing on every transaction; did we dissect the profit margin there?
R. Kirk-Stacey, Associate Broker,
Re/Max Alpha Realty, NC

[nymommy-2009]

A word about zillow. While it's nice, it is not accurate. There "market value" assesments are taken from county assesor numbers. And guess what.. on LI, that could mean that while hte county assesses your house at $350,000, your home could sell for $450,000. The same can be said in the opposite direction as well (in which case you should challenge your assesment if you're over assesed). If anyone relies on their numbers to determine what to ask or sell their house for, they could be losing a lot of money. Keep in mind that county tax assessments are done by a guy behind a desk in the midwest who doesn't have any real understanding of School districts and Long Island real estate, which can vary in price depneding on what side of the street you are on!

[mcsdallas]

With all due respect.

Shame on you. Do your homework girl... when did you start to lose it? This real estate piece was so biased and unresearched I am embarrased for you. Ratings, ratings, ratings, ratings...

Well, at least your hair looks good.

Shape up or retire soon.

eddy murrow

[nymommy-2009]

A word about zillow. While it's nice, it is not accurate. There "market value" assesments are taken from county assesor numbers. And guess what.. on LI, that could mean that while hte county assesses your house at $350,000, your home could sell for $450,000. The same can be said in the opposite direction as well (in which case you should challenge your assesment if you're over assesed). If anyone relies on their numbers to determine what to ask or sell their house for, they could be losing a lot of money. Keep in mind that county tax assessments are done by a guy behind a desk in the midwest who doesn't have any real understanding of School districts and Long Island real estate, which can vary in price depneding on what side of the street you are on!

[taylormm1]

Unfortunately, by this broadcast, the average consumer only received half the facts. First of all, how many of the agents working for these discount brokers are "Realtors". Realtors abide and are held to a strict code of ethics. Not all real estate agents are "Realtors". In todays buyer's market, it takes a lot more to sell a home than just listing it for sale on a website and placing a sign on the front lawn. That is why many discount brokers have gone belly up in this market. Professional fees are negotiable and influenced by many factors. If you needed an operation, would you choose your surgeon based on how much they charged? Absolutely Not. Your decision would be based on education, experience, how many times they've done this type of operation before, excellent references, dedication, high quality of service, high level of service, etc. A Consumer should look for these same qualities in a Realtor.

[dcsr59]

Lesley Stahl here is a question for you. Do you feel that you are over paid for what you do? All you do is place your self in a position to have an exchange of ideas. Most news people are over paid as are sports figure and company CEO S. But wait are not all of those salaries negotiable for the pay they receive and is it not driven by the market. Oh, yeah. All real estate commissions are negotiable as are the terms of the contract and the service offered. In no way is 6% a hard fast rule. Most of the agents I know advertise on the Internet. The company I'm an agent for works with 24 different web site's. We know the value of the Internet. Magazine and Newspaper adds. Flyer and front yard sign and people to put them up and take them down. Secretaries and office people, the cost of the office , the phone bill, Oh, yeah and Uncle Sam wants his cut right off the top and the state income tax, the cost of the real estate licence I hold, the schools I go to so I can be aware of changing real estate laws, If it was 6% That would likely be split four ways. Ask any seller about the agent that may have saved the contract that was about to fall thru If he or she was worth what ever the commission was. I'll bet they would say yes. Oh yeah, I have even my self heard "Thank you, Dave for being are agent we couldn't have done it without you."

David C. Wall, Sr. Realtor, ERA Showcase, Port St. John, Fl. 32927

[gailsmith3]

My goodness! I've never seen such biased reporting from 60 minutes. I've watched your program faithfully for more than 10 years and I also write for various publications. I know you know, everything broadcast on your program was written word-for-word and your choices really, really stink. You made Realtors out to be monsters. The bottom line is that Realtors are people with children who play soccer and baseball just like judges, plumbers and administrative assistants. I work as an affiliate in the industry and if you truly understood what Realtors go through to get a transaction to the closing table you would never have reported this story as you did. I've watched Realtors save Buyers from houses with structural damage. I've seen them cure title problems for Sellers before they were under contractural obligation to close on a property. I've watched Realtors skillfully negotiate when others would have just walked away becuase they were too emotional over some statue in the backyard. This process is difficult and confusing and the public takes on an enormous amount of responsibility when they put a sign in the yard and negotiate legally binding contracts.

Your story was weak.

[gailsmith3]

My goodness! I've never seen such biased reporting from 60 minutes. I've watched your program faithfully for more than 10 years and I also write for various publications. I know you know, everything broadcast on your program was written word-for-word and your choices really, really stink. You made Realtors out to be monsters. The bottom line is that Realtors are people with children who play soccer and baseball just like judges, plumbers and administrative assistants. I work as an affiliate in the industry and if you truly understood what Realtors go through to get a transaction to the closing table you would never have reported this story as you did. I've watched Realtors save Buyers from houses with structural damage. I've seen them cure title problems for Sellers before they were under contractural obligation to close on a property. I've watched Realtors skillfully negotiate when others would have just walked away becuase they were too emotional over some statue in the backyard. This process is difficult and confusing and the public takes on an enormous amount of responsibility when they put a sign in the yard and negotiate legally binding contracts.

Your story was weak.

[ilrealtor]

I have been a Realtor in Central IL for 2 years. We are taught that "price fixing" as you suggest with a pat 6% on "ALL" home sales is illegal. It is ALWAYS negotiable.
In Central IL, commissions are all over the place. New construction and high end housing commissions tend to be lower percentages. Middle brackets see a trend of other percentages, and vacant lots yet another. You simply cannot make a blanket statement that ALL commissions are 6% across the nation when you only represented one city.
Million dollar homes are the exception in a lot of cities, not the rule. Everyone does not make $30,000 gross. Those sales, as well as the 20 hour sell, are more the exception, these days, not the rule.
My homes are listed online, my clients can get pre-approved online, view homes online, get a price for their home online, and many other services, guess what - FOR FREE!
I have sold FSBO's for as little as $3000; have rebated 30% of my commission back to clients who otherwise could not have closed without my help. I have also referred clients to discount brokers because they had to have a certain amount from their homes that left little/nothing to pay for commissions and repairs.
Not all of us are about the buck, Ms Stahl. Please don't put us all in the barrel together. There are Realtors who truly care about their clients, not just getting paid.

[cbbroker]

Innovation is hardly killing Real Estate profession. Realtors who embrace the Internet as a tool to benefit their clients will have business in my local market for years to come. With 77% home home buyers using the 'net in 2006, claiming that our fees are for publicly available information is simply misleading.

A true Real Estate pro knows the market - not in a single price range, but all inventory in a wide range of prices. How many buyers and sellers have the time to visit 3 to 3 houses per day year after year? No virtual tour can make up for this knowledge.

How many transactions does a typical buyer or seller negotiate in a lifetime? Can it possibly compare to the experience of someone who handles this daily?

I could go on like this for hours, but why bother? There should always be room for a "Listing-only" or "Discount" business model. As an educated and experienced Broker, I don't compete for that sector of the business. The median price of a property marketed through my office is just over $1.5 million. Our clients feel that we provide a service that is worth more than the fee they pay for it.

As with any other professional service, Real Estate brokerage comes in many forms, and has both excellent as well as disgraceful practitioners. Those of us who really delight our clients are well compensated, and receive referral business in turn.