Real Estate Cartel: Anti-competitive practices deny consumers $50 BILLION annual saving

#NCPW: In 1997, two years after #RealEstateCafe opened it’s 1,200 SF storefront in Cambridge MA, just 2% of buyers found houses themselves, now it’s half. Given internet efficiencies, Mark Nadel asks:

“Why haven’t inflation adjusted commissions falling dramatically?”  

Whether you’re a homebuyer, real estate innovator, regulator, or attorney interested in breaking up the real estate cartel, aka #RECartel, use the link below to access this exhaustive analysis of the industry’s anti-competitive practices:

http://bit.ly/Nadel_AntiCompetitiveRE (share on social media)

Invite readers to share their favorite quotes on social media this week, National Consumer Protection Week to empower consumers, both homebuyers and sellers to SAVE MONEY. How much? Nadel writes:

“…a competitive marketplace could reduce commissions by more than 50 percent, consumers could expect to save as much as $50 billion/year”

page 114, Obstacles to Price Competition in the Residential Real Estate Brokerage Market

Stunning! What’s the best way to make progress towards that goal? How about friendly-competitions — use today, March 1st to launch a virtual Million Dollar March.  

More on #RESavingSprints later this week!

Related Articles

Alternative fees for home buyers: Still the “Unfinished [r]Evolution”?

Four years ago, June 7, 2004, Banker & Tradesman quoted The Real Estate Cafe in a page one story entitled, "MLS Policy Statement Fuels Commission War."  The skip page read:

Unfinished Evolution

During the last decade or so, alternative services — such as flat-fee, listing-only or fee-for-service models — have been offered to home sellers, but there haven’t been a tremendous amount of choice for buyers, according to Wendel. 

This is one of the untold and unfinished pieces of this [real estate r]evolution," he said.  Wendel, who charges $100 an hour rather than charging a commission, has been offering a full menu of services to both buyers and sellers for the last 10 years.

Do you think the residential brokerage community now offers enough alternatives to the traditional real estate commission?  What kind of money-saving options would you like The Real Estate Cafe to add to it’s Menu of Fees & Rebates?  Should we bring back our $3,000 and $5,000 flat fees, first offered when we opened in 1995, or continue to focus on hourly fees?

Would you like to see the traditional, two-sided real estate brokerage commission uncoupled so home buyers and sellers can BOTH maximize savings in an open, competitive market place?  If you are not familiar with the issue, watch this 90 second video.  Why hasn’t this happened already, and what will it take to get there?  Your ideas are welcome on the "divorcing" commissions section of our wiki, or in the comments section below. 

See what we mean about the "Unfinished [r]Evolution" in real estate brokerage fees?

1st Annual Real Estate Fleece Buster Awards

Honor former Senator William Proxmire (confirm name) famed for his Golden Fleece awards, but calling for nominations for the first annual Real Estate Fleece Busters Award for truly acting in the public interest in their efforts to enhance competition in the real estate industry (link to the Washington Post article.).

Honorary Nomination:  Fr. Robert McEwen (sp?) first president of the Consumer Federation of America.

Others:

1.  DOJ

2.  FTC

3.  Inman News

4.  Wall Street Journal

5.  Founders of Future of Real Estate

6.  Flat fee service vendors, particularly those who are the leading listing agents in their respective markets

7.  Attorney generals monitoring real estate fraud

8.  Everyone who submitted comments to the DOJ / FTC public comment process.

9.  Retiring chair of House Financial Service Committee

10.  Technology innovators who continually develop new business models designed to save real estate consumers time and money.

11.  Authors of Freaknomics

Emeritus:  Alan Greenspan, who first proposed that banks be allowed to provide real estate brokerage services

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