According to this WashingtonPost.com article a national consumer advocacy group yesterday condemned real estate trade groups for setting prices and blocking competition to maintain its traditional commission structure and to keep discount firms from gaining any market share.
The commission system is "cockamamie," said Stephen Brobeck, executive director of the Consumer Federation of America. Even some inexperienced real estate agents are charging a 7 percent sales commission, he said -- an amount he likened to the cost of a new car. And he questioned why the brokerage fee on an $800,000 houses is four times higher than that for a $200,000 house, saying the work involved is basically equal.
The District-based federation applauded efforts by government antitrust regulators to put pressure on the trade groups to change the way they do business, but Brobeck said no one had yet found the "magic bullet" to reduce costs. He said consumers have been left on their own and urged home buyers and sellers to negotiate over the sales commissions they are charged and make sure it is clear who is representing whom, what each agent will be paid and for what services.
Read the whole article here.
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