Q. While the Real Estate Institute does not normally respond to anonymous correspondents, some of the opinions expressed in Mary Holm's recent columns deserve a factual response.
In one column, a correspondent says that "a house effectively sells itself" but then proceeds to contradict himself or herself by stating that "it is not easy to sell your property yourself".
Monday, August 9th 2004, 9:48AM
by The Landlord
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We are surprised that Ms Holm was unable to pick up on this inconsistency. Her correspondent appears to want it both ways but the fact that it is, indeed, not easy to sell your property yourself is why more than 90 per cent of people employ real estate agents.
Nevertheless, Ms Holm asks if there are "any agents out there who are keen to defend themselves" - from the apparent accusation of working for their clients and charging a commission to do so.
The argument over real estate commissions is a tired one, but perhaps for the benefit of Ms Holm and her misinformed readers we can restate the facts.
Real estate commissions are negotiable between the agent and their client. Whether they choose a flat fee, or percentage, or a mixture is entirely up to them.
This is free-market competition at work. Real estate agents are free to charge as they like and their clients are free to either accept or reject those charges. If they charge too much, clients will go elsewhere; if they do not charge enough, they may go out of business.
Agents provide considerable value to the selling and buying process. With their databases and advertising channels, they create liquidity in the property market, which in turn helps buyers and sellers achieve the best possible price.
