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Nov 12, 2004 -- Real estate morphing into democratic industry

There is a large shift going on in the world of real estate that means much more options for you and your home. The market is splitting up into various sectors that span the range of do-it-yourself sales to full-service agent help. Real estate agents are still key to making the real estate market work. But people are finding what works for them. The market share of companies that offer alternatives is growing quite quickly, and the days of non-negotiable transactions are over. In fact, the average commission on real estate transactions is a little more than five percent today, and you can thank the Internet for that. In a lot of cities, about one-third of home sales are taking place on the Web. That is a very scary prospect for agents, who used to be in complete control of real estate listings and information. So, what are real estate agents afraid of? In the Northeast, they are terrified of Foxton’s, a European real estate agency that pays its agents salaries instead of strictly commission. Foxton’s agents get about 3 percent, compared to the typical 6 or 7 percent that regular agents get. There are some agents in the Northeast who will not show a Foxton’s listing because they get a smaller cut of the deal. But there are also agents who are more forward thinking about their services and the real estate industry in general. They’re willing to take a lower commission for fewer services. Some even have prices lists with a la carte services. For example, you handle the open houses but the agent takes care of the listing. There will be more and more of this coming our way because the Internet has democratized information. Traditional real estate agents will try to fight this movement, but it’s going to happen regardless.

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