“The Economist” says that the internet has put down incompetent middlemen but not American realtors. Although sale-owner websites have boomed, traditional realtors have kept their 80% market share and still at an unbelievable Real Estate Commission to up to 6%. According to them fees are so constant because selling a house in a weakened market requires the expertise of an agent along with energetic marketing. On the other hand in some areas a few big brokers handle a large amount of business and they set a high Real Estate Commission attracting more people to the industry which increases the competition to the point that while a British real estate agent closes from 40 to 50 transactions a year, an American closes 7, says Norm Miller from the University of San Diego.
According to The Economist, because of the interdependence nature of the business, both the buyer’s agent and the seller’s agent need to collaborate to close the deals. Nevertheless, some seller’s agents will cut their own Real Estate Commission while offering the full price to the buyer’s agent which makes the buyer’s agents drive their clients away either to support full-service brokers or because they worry the discounter will leave them with the biggest share of work. That discrimination has gotten to the point that Colby Sambrotto, the founder of ForSaleByOwner.com and USRealty.com, a discount broker, was forced to contract an agent to get his own home shown to prospective buyers after he tried to sell it in New York. But because discounters need to make up for a lower Real State Commission with higher volumes, the slightest discrimination can drive them out of business. The end of the 6% in real estate commissions appears to be a long way off.