From: "homan4" 
Newsgroups: alt.org.natl-assn-mortgage-brokers alt.real-estate alt.real-estate-agents
Subject: Re: Radical change in any direction is good news???
Date: Sat, 23 Jul 2005 00:17:47 -0400


>> One result of a bursting RE bubble could be a radical change in
>> marketing:  More streamllined with lower commissions for RE sales
>> agents.  High commissions in the 5-7% range may be justifiable when
>> "irrational exuberance" drives prices up in a bullish RE market and the
>> seller has profits to draw from.  Actually, many in the mortgage and
>> real estate business have done very well over the past few years.  I'm
>> talking about the serious, established, professional realtors ... not
>> the novice part-timers.  The idea that a bearish RE market would be good
>> for realtors is ludicrous.  Art

Say what?

First what is this about 5-7% being "high commissions?"  I consider 5% low 
and 7% normal.  You have been reading too many Newsweek articles - most of 
which are written by reporters who don't know what they are talking about. 
The rapid rise in real estate prices and media hype has caused numerous 
sellers to try it on their own, or go to discount brokers - after all, every 
one knows that full service realtors are greedy.  I wonder why it is never 
reported that the limited service discounters are whores who cheapen the 
industry.  Probaably because it would be considered an insult to 
prostitutes.

Second, what bubble?  I haven't seen any "new" land lately.  In fact, the 
federal as well as many state and local governments are purchasing bulk 
parcels of vacant land at alarming rates, requiring mandatory greenbelt set 
asides n new subdivisions and even passing development morritoriums in order 
to preserve "quality of life" in their jurisictions.  Add to that the land 
which is condemned for contamination, environmental and inferstructure, as 
well as erosion of our coastlines and this takes tens of thousands of acres 
nation wide permently off the market every year creating an artificial 
shortage in addition to the already limited low supply.  The actual 
available land inventory in this country is decreasing each year with no end 
in sight.  People need homes and the shortage is only going to get worse. 
Prices are not going to stop rising.

It is also clear that you not only don't understand real estate, or the law 
of supply and demand.  Your so called "irrational exuberance" which is 
driving the prices up is in effect creating a perception that selling homes 
is easy, and increasing the ranks of folks who consider selling "FSBO" or 
using a limited service discount broker, thus putting a downward pressure on 
commissions.  If your so called bubble bursts and  property sales start to 
slow, people are going to look for help.  If an agent has to carry inventory 
for a longer period, costs are going to rise for the agents, and commissions 
will rise automatically to compensate.

The people in the mortgage business who have done best over the last ten 
yeare are those who do refi's.  Many folk have cashed out their equity so 
many times that if the market slows and they choose to sell, there will be 
nothing left to even pay a limited service discount broker to sell their 
homes, this is when most of he jurnalists who wrote about excessive 
commissions will eat their words and strapped sellers will find out how hard 
it really is to sell FSBO.

Additionally, if the last two dips in the real estate cycle are ay 
indication, the number of units selling will drop less than 10% this will be 
enough to discourage some real estate part timers and hobists, but will only 
increase the opportunity for experienced agents to increase their incomes. 
Even though I doubt it will happen, I would welcome a slow down, I like 
people looking to pay higher commissions, giving longer listings and seeking 
me out while weaker agents drop out of the business like flies.