Traditional Real Estate Commission Structure, The $30,000,000,000 Problem.
June 11th, 2007 Categories: Real Estate News
About 6 months ago I was contacted by Mark Nadel and asked to constructively criticize as well as add to the 75 page thesis regarding traditional real estate commission structures he was working on. At the time, although I had my $.02 to add, I felt the best way to help was to use The XBroker as a platform to get his work out to the community his work stood to effect most.
Today I received an e-mail from Mark with an abridged version of his original diatribe. Although I have yet to read it in its entirety, I’m posting a link to the paper for all those who may not have been privy to the original document.
Mr. Nadel addresses a very taboo subject amongst most real estate professionals, as most seem to feel that an ‘outsider’ meddling in their business from an ivory tower rivals the sort of heresy laced practices that I condoned in my own brokerage and previously validated with a couple of posts here at The XBroker.
Owning a real estate brokerage for about 4 years, I was drawn to the topic because of my personal attempt to run my brokerage using an alternative commission model, a model for which I consistently found myself defending as some sort of witchcraft to other Realtors and the local NAR chapter.
Pending a follow-up post (after I’ve had time to digest this abridged version), I encourage all real estate professionals to carefully read and consider what Mr. Nadel has to say. While no amount of litigation, lobbying, or consumer pressure may move real estate professionals and their greater organizations to change their business models, technology can and is.
For the most visionary of real estate professionals, there is an unprecedented opportunity to leverage technology with the comprehensive and dutiful research Mr. Nadel has undertaken, research that is very in tune with todays (and definately tomorrow’s) real estate consumers wants and needs, and too often dismissed as nobody’s business by those on the ‘inside’.
So, take off your business hat for a bit and put on your consumer shoes. Read the article objectively, try and find the opportunity to capitalize on what is probably the most comprehensive work of its kind. Instead of defending the old hat, come up with some new ideas, dig into the ‘What If?’ barrel, pretend you had to theorize a new model…Dare to dream…
This topic has been beat around for quite sometime, but I’m still very interested to hear what many of you have to say, specifically:
Joe and Rudy of Sellsius (I want to get on the magik bus!!)
Pat Kitano and Kevin Boer
Also See:
More Fuel to the Fire by Joel Burslem @ Inman News
Sphere: Related Content
Jeff,
Your post actually was inspirational. I just started a series about this commission issue based partly on Nadel’s paper and your blog post
The “commission paradox” series http://www.agentscoreboard.com/blog/2007/06/14/the-commission-paradox-part-2/ is where I break down the real estate process and discuss the fact that our current model may not be pretty but it may be the most equitable.