{"id":2208,"date":"2007-11-11T02:03:59","date_gmt":"2007-11-11T09:03:59","guid":{"rendered":"http:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/?p=2208"},"modified":"2007-11-10T23:00:47","modified_gmt":"2007-11-11T06:00:47","slug":"a-consumers-guide-to-the-divorced-real-estate-commission-undermining-the-arguments-in-support-of-the-status-quo","status":"publish","type":"post","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/2208\/a-consumers-guide-to-the-divorced-real-estate-commission-undermining-the-arguments-in-support-of-the-status-quo\/","title":{"rendered":"A consumer&#8217;s guide to the divorced real estate commission: Undermining the arguments in support of the status quo"},"content":{"rendered":"<p><b>Part V: Why arguments for the current method of compensating real estate agents and against divorcing the real estate commissions must fail<\/b><\/p>\n<p>As I write this, the National Association of Realtors is preparing for its annual convention, to be held this year in America&#8217;s playground, Las Vegas, Nevada. This year marks the 100th anniversary of the founding of the NAR, so that milestone will be part of this year&#8217;s festivities. Can you guess what <i>won&#8217;t<\/i> be on the program?<\/p>\n<p>You guessed it. Not one session or event will be devoted to an earnest discussion of divorcing the real estate commissions, reconfiguring the way we account for funds at Close of Escrow so that sellers pay only their own agents and buyers pay for their own representation. I think it would be accurate to say that the NAR likes things the way they are, but it would probably be still more accurate to say that divorcing the commissions is not even on the NAR&#8217;s radar.<\/p>\n<p>Why not? That&#8217;s for you to decide, but the most common &#8220;yeah, but&#8221; objection you will hear to divorcing the commissions, among real estate professionals, is, &#8220;Yeah, but buyers don&#8217;t even care who pays the commission.&#8221;<\/p>\n<p>I wrote this series of essays so you would know why it is important for the real estate commissions to be divorced. But assuming I have failed in this objective, let me endeavor now to help you understand why this matters:<\/p>\n<p>In our current buyer&#8217;s market, some sellers are offering 4%, 5%, even 6% buyer&#8217;s agent&#8217;s commissions. Some new home builders are offering 8%, 12%, 16%. The highest buyer&#8217;s agent&#8217;s commission I have heard so far is 20%.<\/p>\n<p>You as the buyer bring or borrow every dollar that gets paid to anyone in a normal real estate transaction, so it is possible that you could end up writing a mortgage check every month with twenty cents of every dollar going to cover what you unwittingly paid for &#8220;your&#8221; agent. That&#8217;s twenty cents of every dollar of principal payment, but also twenty cents of every dollar of <i>interest<\/i> &#8212; and taxes, and insurance and private mortgage insurance.<\/p>\n<p>If buyer <a href=\"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/2208\/a-consumers-guide-to-the-divorced-real-estate-commission-undermining-the-arguments-in-support-of-the-status-quo\/#more-2208\" class=\"more-link\">Read more<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Part V: Why arguments for the current method of compensating real estate agents and against divorcing the real estate commissions must fail As I write this, the National Association of Realtors is preparing for its annual convention, to be held this year in America&#8217;s playground, Las Vegas, Nevada. This year marks the 100th anniversary of [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_crdt_document":"","jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[6,5,30],"tags":[],"class_list":{"0":"post-2208","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"hentry","6":"category-marketing","7":"category-real-estate","8":"category-supplanting-the-nar","10":"no-featured-image"},"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"jetpack-related-posts":[{"id":2202,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/2202\/a-consumers-guide-to-the-divorced-real-estate-commission-cataloging-benefits-starting-with-a-complete-catalog-of-available-homes\/","url_meta":{"origin":2208,"position":0},"title":"A consumer&#8217;s guide to the divorced real estate commission: Cataloging benefits &#8212; starting with a complete catalog of available homes","author":"Greg Swann","date":"November 10, 2007","format":false,"excerpt":"Part IV: Divorcing the real estate commissions will result in benefits not just for buyers but also for their agents and for the real estate market as a whole The National Association of Realtors is embroiled right now in a protracted anti-trust suit brought by the United States Department of\u2026","rel":"","context":"In &quot;Marketing&quot;","block_context":{"text":"Marketing","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/marketing\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":3383,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/3383\/unchained-melodies-divorcing-the-commissions-slays-the-nar-vampire\/","url_meta":{"origin":2208,"position":1},"title":"Unchained melodies: Divorcing the commissions slays the NAR vampire","author":"Greg Swann","date":"July 18, 2008","format":false,"excerpt":"Start here. Technorati Tags: disintermediation, real estate, real estate marketing","rel":"","context":"In &quot;Disintermediation&quot;","block_context":{"text":"Disintermediation","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/disintermediation\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":1666,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/1666\/the-divorced-real-estate-commission-file-an-organic-compendium-of-arguments-pro-and-con-on-divorcing-commissions\/","url_meta":{"origin":2208,"position":2},"title":"The divorced real estate commission file: An organic compendium of arguments, pro and con, on divorcing commissions","author":"Greg Swann","date":"July 16, 2007","format":false,"excerpt":"I had the idea of building this last night, cataloging the BloodhoundBlog posts on the subject. Lani had a better idea, so I appropriated it. Attached below is a fairly comprehensive list of posts, both for and against, on the idea of divorced commissions. I think this is the most\u2026","rel":"","context":"In &quot;Blogging&quot;","block_context":{"text":"Blogging","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/blogging\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":1659,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/1659\/divorcing-the-real-estate-commissions-is-simply-a-matter-of-hud-1-bookkeeping-effected-by-the-mortgage-lender\/","url_meta":{"origin":2208,"position":3},"title":"Divorcing the real estate commissions is simply a matter of HUD-1 bookkeeping effected by the mortgage lender","author":"Greg Swann","date":"July 15, 2007","format":false,"excerpt":"In a charmingly romantic post this morning, Jonathan Dalton gets bogged down in the all-too-common idea that divorcing the Realtors' commissions would impose some new financial burden upon buyers, resulting in their loss of representation. This is false. Although we operate by the fiction that the seller pays the real\u2026","rel":"","context":"In &quot;Lending&quot;","block_context":{"text":"Lending","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/lending\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":1251,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/1251\/redfincoms-real-estate-consumers-bill-of-rights-a-wolf-in-sheepskin-clothing\/","url_meta":{"origin":2208,"position":4},"title":"Redfin.com&#8217;s Real Estate Consumer&#8217;s Bill of Rights: A wolf in sheepskin clothing . . .","author":"Greg Swann","date":"April 2, 2007","format":false,"excerpt":"I am a hardliner on the subject of reform in the real estate industry. Over the last nine months, I have written at great length about, among other things, the skill-set required to survive in the future of full-service real estate, empowering buyers, dual agency, how the NAR makes war\u2026","rel":"","context":"In &quot;Disintermediation&quot;","block_context":{"text":"Disintermediation","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/disintermediation\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":1283,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/1283\/who-pays-the-buyers-agent-once-weve-divorced-the-commissions-we-can-stop-worrying-about-it\/","url_meta":{"origin":2208,"position":5},"title":"Who pays the buyer&#8217;s agent? Once we&#8217;ve divorced the commissions, we can stop worrying about it","author":"Greg Swann","date":"April 9, 2007","format":false,"excerpt":"Joke Number one: Q: If you came upon the Buddha in the guise of a hot dog vendor, what should you say? A: Make me one with everything. Joke number two: Q: Top Drawer Listing Agent, why do you charge a 7% commission to list a home for sale? A:\u2026","rel":"","context":"In &quot;Blogging&quot;","block_context":{"text":"Blogging","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/blogging\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]}],"_links":{"self":[{"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/posts\/2208","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/comments?post=2208"}],"version-history":[{"count":0,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/posts\/2208\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/media?parent=2208"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/categories?post=2208"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/tags?post=2208"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}