Reply to WSJ: Beware real estate cartel

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[quote=Anonymous]We had a very reputable agent with a presence in our market when buying our house. I liked her and she was informative, but I will admit I didn't see why exactly she deserved all that commission. We found the listings, not her. A few times she emailed us new listings, we'd already seen it on Redfin or CBmove. She helped with the offer paperwork itself and gave us a few names for inspectors and so forth, but that didn't translate into thousands in commission.

I can see how agents are more useful as a seller's agent rather than a buyer's agent so perhaps the commission should be restructured to give more to the seller's agent and less to the buyer's agent.

Even though the overall commission is ridiculously high and does not justify anything approaching 5% of the house value, I have a sneaking feeling that if commissions were cut back to 1-2% as found in other countries, it only results in house prices going up as people will take the savings and add it to the offers on their next house.

During our househunting search, we twice experienced the phenomena of a house being listed one afternoon, we immediately contact the agent who sets up a viewing the next morning, which was the "earliest available time" only to be told the next morning it was already under contract because another agent had managed to get their clients to view the house the night it was listed and sellers accepted their offer. That did leave a bitter feeling as we'd been told the earliest viewing wasn't until the next day. The agent admitted in those cases the buyer's agents and the seller's agents had connections or owed each other favors that they were able to sneak in their clients ahead of the pack and get an offer through. But I was also puzzled as to why the sellers would immediately take their offers without waiting a few days knowing there were surely other interested buyers who wanted to view the house the next day and could possibly make even higher offers.

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