The way things are: Realtor Association/Union

The way things are: Realtor Association/Union June 30, 2009

Posted by BDO in Living Frugal.
Tags: association, beating, buyers, consumers, Debt, estate, fees, mortgage, real, realtor, realtors, sellers, union
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Have you noticed that the fees for the Realtor Association/Union to sell your house is increasing?

I don’t know what it is like in your area, but in our area they are increasing.

Back during the “greatest economic downturn since the Great Depression“, fees for the “Union” to sell your house went down to 2.4%. I am sure they lowered their rates to “convince” people to sell their house. Now that consumer confidence is going up, home sales are slowing growing, and the economy is slowly turning around, the fees have jumped to 4% for the “Union” to sell a house.

Why is that?

Are Realtors adding services that they were not offering during the economic downturn? Or are they just taking advantage of the upswing of the economy, because sellers are willing to pay a higher premium for a Realtor’s services?

Is there really a difference in money by going from 2.4% to 4%?

Remember, if you are in a state that requires a buyer’s agent and a seller’s agent that 1.6% difference in fees doubles. So, on a house of $200,000 your fees during the economic downturn were $9,200 to sell your house. Now during this upswing, at a rate of 4%, your fees are $16,000. To sell your house using the Realtor Association/Union has just increased $6,800.

How does this relate to beating debt?

Our goal is to maximize our income so we can put more money down on our debts. However, if we get nickled and dimed by fees, we find we can’t pay off our debts as quickly. So, paying less to sell your house would be advantageous for a person trying to beat debt, because they could take that $6,800 in savings and apply to their debts.

However, in reality, there are not many options to sell your house outside of the Realtor Association/Union. As in any monopoly, the profits are large because of the restrictive nature of the marketplace. Since most people are not comfortable in buying a house outside of the “Union” the market restricts the seller’s options to using a “qualified” Realtor and their increasing fees.

I guess it is just the way it is, right?

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