One of our competitors doesn't believe his people are worth their price!

In an article published last week by the Denver Post (http://denverpost.com/business/ci_3437532) Dave Liniger (the founder of Remax) predicted that the average real estate commission will drop to 4% of the sales price of a property in the next 5 years. This prediction makes it appear as though Liniger has lost confidence that the members of his company command value for their services. The article states that commissions will be reduced because agents will spend less time showing houses due to consumers searching for properties on the internet. The only reason I can surmise that Liniger might make this prediction is that he has bought into the fallacy that the abundance of information on the internet reduces the cost of a real estate transaction. As I have mentioned in earlier posts, we know that the true costs of real estate transactions have in fact risen, not fallen. Transaction costs are driven by other variables like insurance, governmental regulations, litigation risks, office overhead, advertising, etc. At Realty Executives we believe that consumers really do deserve professional guidance and skills from knowledgeable real estate associates. We know that the average commission rate for the top companies in the U.S. has actually increased in recent years, despite overall average commission rates decreasing. This tells us that people who hire professional real estate associates (or Executives in this company) are willing to pay for skills and services they find valuable. We also know that consumers also want relationships with professionals, even though they do spend more time on the internet searching properties of interest. One of your jobs as an Executive is to help consumers sort through all of the information and help them interpret it. Just because there is less driving around showing properties, doesn't mean that the professional real estate person is not working harder or smarter. Finally, and most importantly, I think it is imperative that I emphasize to you how valuable I think your services are to the consumer...despite what my counterpart at Remax thinks.