Real estate agents are terrified these days. The Internet – and the discount Web sites that have succeeded on it – has decimated the industry. And, now it’s a civil war; agents against agents. Traditional agents want to keep commissions fixed. Some have even tried to get legislatures to pass price-fixing laws. Other agents realize that the marketplace is going to win out so they’re offering full service a lower commissions. There are also several great sites offering a menu of services based on how much help you want. A new example Clark just learned about is the site redfin.com. There is a very limited menu and it’s only available in certain areas, but word about this company is spreading like wildfire. One controversial area of the site is the review area, where people who’ve looked at houses can then rate them. The company is in a lawsuit right now over these postings and has taken them down for now. But people crave that kind of knowledge and the idea of a more open market.

About one-quarter of people do a FSBO - or For Sale By Owner - these days. If you are doing a FSBO, Clark wants you to know that you are still going to have to pay some money in commission. When a broker or agent brings a buyer to your home, you may have to pay two or three percent. It’s still a deal because normal fees are six or seven percent commission. The problem is that people don’t know your home is on the market. Your home needs to be on the Multiple Listing Service in order for the word to get our there. But that is about to change. There is a new site known as “Iggy’s House” that puts people selling their own homes on the MLS. It’s not available everywhere, but California, Texas, Florida and New York are the big states. In addition, Iggy’s House is available in Oregon, Washington, Indiana, Kentucky, Tennessee, Virginia, Georgia, Michigan, Illinois, South Carolina, North Carolina, Maryland, Massachusetts, Connecticut and Colorado. Clark has no idea what kind of experience you’ll have with Iggy’s House, but he wants you to know about it. It takes a couple of days for your home to appear on the site once you’ve signed up. But it’s worth it. About 70 percent of homes are sold through the MLS.

If you want to sell your home, the No. 1 source for marketing and promotion is the MLS or Multiple Listing Service. The only problem is that the listing service is set up to serve only fully-commissioned brokers. It’s very hostile to people selling a home on their own or using discount brokerage services. But if you can’t join them, beat them! Zillow.com is now allowing FSBO folks to list their homes for sale FOR FREE. The company is fed up with the way the National Association of Realtors is trying to create a closed market. So it’s giving an alternative to all the other folks out there. Zillow lists online appraisals and home values, and they are surprisingly accurate. So, if you’re selling a home on your own, take advantage of this resource.

The National Association of Realtors is at it again. The NAR is trying to establish fixed commissions, despite the fact that they are against the law. The organization is trying to use the Multiple Listing Service (MLS) to keep business from the discount realtors. NAR reps are actually delisting the discount realtor listings from this site. The average real estate commission in the U.S. has dropped to 5 percent. And realtors are terrified that what happened in the travel agency business is going to happen to them. So, they are trying to stop the clock from marching forward by tampering with the listings. The U.S. Justice Department has already filed suit against the NAR for another issue. They will most likely jump on this one too. It’s simply wrong and should be against the law. People should be able to use any kind of broker they would like. Clark uses a full-commissioned broker because he believes she’s worth it. But a discount broker who offers fewer services might work for you. The industry is morphing, and part of that is due to Foxtons, the full-service agency that only charges 3 percent commission. The company is only in the Northeast right now, but it’s growing like wildfire. So, the NAR is not going to succeed with this mission no matter what.

The number of people selling a home by FSBO (for sale by owner) is in decline. It’s down to about 12 percent, while 70 percent of sales happen with traditional brokers. This ought to be great news for real estate agents. But Clark thinks FSBOs have declined because those people are choosing discount brokers. And, in fact, almost 20 percent of real estate transactions are done with discounters these days. The real estate industry and the National Association of Realtors, in particular, has been doing everything possible to try and shut down the discounters. But Clark thinks that discount services are necessary and they’re here to stay. Commissions are negotiable these days, with the average falling to five percent. Commissions had been up around the 7 percent mark until the discounters came along. So, don’t be afraid of using a discounter. You can both benefit. By 2010, Clark predicts that people will be able to pick and choose the services they want. He’s not anti-agent; he’s just against price fixing.

Clark has been angry about the underhanded behavior of the National Association of Realtors lately. The NAR is basically trying to price fix and its members thinks it’s fine to do so. The agency is trying to make it illegal for people to use discount agents or to list discounted sales and FSBOs on the Multiple Listing Service, among others. In fact, in a few states laws have been passed that make it a criminal for a discount agent to represent you. Not all real estate agents agree with what the NAR is doing. There are 1.3 million licensed agents in the United States, and there is much dissention among them regarding fixed commissions. The U.S. Department of Justice has even filed an anti-trust suit against the NAR to stop some of this nonsense. Granted, if agents do a great job, they should be able to earn whatever the marketplace will them. But the marketplace should set those parameters. You need to let your state representatives know how you feel about this if you want a choice in real estate. And, if you're buying or selling a home, you need to negotiate with your agent ahead of time what the commission will be.

Clark believes most people should hire a real estate agent when selling their home. You need a certain type of mentality and temperament, and most of us just don’t have it. At the same time, Clark likes the fact that people want to try different things and pay for only the services they want. Along that vein, Clark read about two housewives in Madison, Wisconsin who set up a Web site for people who want to do FSBOs (for sale by owner.) The women started it because they were selling their homes and went through the process. The site, fsbomadison.com is getting more clicks than the national MLS site used by real estate agents. It’s run almost like a co-op. You pay $150 to list your home and you get a special “Madison FSBO” home sign. And, if people are going through some type of financial hardship, such as a divorce, the women waive the fee and allow you to post for free. The savings in commissions has been about $17.5 million per year. Like so many other things, there is a segment of the market that wants to be completely separate from the traditional real estate market. Real estate is changing and those in the industry need to realize that.

Did you know that you can sell your home at a reduced commission these days? Real estate trade associations don’t want you to know this and they’ve gotten six states to pass laws that make it a crime to negotiate over commissions. Real estate agents are divided over the topic, but many think it should be up to the free market. A new site called hungryagents.com allows agents to bid on the job to sell your house. Clark loves this idea. There are so many licensed agents in the country and not nearly enough jobs. So how do you build you client base? You negotiate your price. Clark knows people need real estate agents, but he thinks people should be able to pay the commission they want.

Real estate agents are in the midst of a civil war over whether to have fixed or floating rate commissions on properties. The traditional real estate industry is terrified of the free market and the national Association of Realtors is fighting hard to keep things the same. A recent profile in the Wall Street Journal featured an agency in Ohio that started discounting commissions and was basically ousted by other agencies in the area. The Los Angeles Times also featured a story on another agent who has decided to provide full commission service for half the money. How will it work? Basically, the woman will get paid on salary instead of commission. Technically, price fixing is illegal, but the traditional real estate industry ahs been able to fix commissions by browbeating agents involved. But things are changing. Pretty soon you will be able to get whatever level of service you want with a comparable commission rate. No longer will be it a market where you either sell-it yourself or pay full commission to a real estate agent. In addition, the U.S. Justice Department is currently suing the NAR for the price-fixing techniques it pushes. The marketplace needs to decide what happens here, not the real estate industry.

Real estate agents, in fear of losing money, have been engaging in anti-competitive practices in states such as Texas, Oklahoma and Kentucky. In those states, agents are trying to make it a crime for people to use “a la carte” real estate services or to use discounted commission services. Agents have felt threatened by the continual drop in commission, which has dropped from about 7 percent to 5 percent. But with advancing technology, people don’t have to accept traditional ways of doing business. Many are using the Internet help to buy homes on their own or to hire agents for limited help. It’s causing a civil war inside the real estate industry. Some agents are going with the flow and are offering limited service for a lower commission, while others want fixed commissions and anything else is illegal. Why not let the customer decide? Some people still want the full service agents, but others do not. Making it against the law is simply corrupt, though. The Texas Real Estate Commission is the latest group trying to do this, and Clark thinks it’s ridiculous. States should not be allowed to interfere in the free market and should be penalized if they do.

Clark has always encouraged people to learn about investing and to do it themselves whenever possible. It’s a wealth of knowledge and it can save you tons. But how much difference does it really make? Financial writer Jane Bryant Quinn conducted an analysis into this subject recently. She compared what people make when putting their money in a low cost mutual fund versus one sold by a high-commissioned broker or salesperson. In the first scenario, she compared investments of $10,000 over 15 years. If you choose the low cost fund, you’ll have $26,000 after 15 years. In a commissioned fund, you’ll have only $20,000. And, after 30 years, you’ll have 64 percent more money! That’s huge. It happens because, year after year, your money grows exponentially. So the longer you have the money in the fund, the bigger the difference. The problem is that most people don’t know what expenses they’re paying for their mutual funds, and companies make it very hard to understand. But you can’t go wrong with Vanguard, TIAA-Cref, Fidelity Investments and T. Rowe Price. These are all low to moderately low fee companies, with Vanguard having the least expensive fee structure. Check them out. It’s your money!

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.

Clark has hoped for a long time that the traditional real estate industry ceases to exist. He doesn't think people should have just two choices when it comes to buying or selling a home: getting a fully-commissioned real estate agent or doing it yoursel. There has been no in between for many, many years despite efforts of forward thinking companies. The good news is that there are people in the real estate industry who want things to change, too. Daniel Ruben, an agent, deducts two-thirds of his commission to customers who choose limited services from him instead of the full deal. He's basically a broker for agents who are willing to take a reduced commission in exchange for providing fewer services. Similar efforts have been made in New York City where Foxton's, a British company, has blossomed. Agents get about two percent commission compared to the regular 6 or 7 percent. Customers basically get to choose what level of service they want, and Clark loves it.

One of the difficult topics Clark deals with is how to sell a home. Is it smarter to do FSBO (For Sale Buy Owner) or to hire a real estate agent to do the work for you? Many people start with a FSBO and then give up after awhile because it is a huge hassle. Christa, Clark’s executive producer, recently sold her home as a FSBO, but she was ready to give up after two weeks into the process. Dealing with questionable or rude people every week and constantly having to keep the house clean nearly caused her to give up. But she kept with it for another month and finally it paid off. She sold her home after six weeks and ended up saving more than $20,000 doing it herself. But, if she had the sell the house again, she will use an agent. Clark recommends that you stay with a FSBO for three months if you’re going to try it. You will figure out what works best for you.

Clark has hoped for a long time that the traditional real estate industry ceases to exist. He doesn't think people should have just two choices when it comes to buying or selling a home: getting a fully-commissioned real estate agent or doing it yoursel. There has been no in between for many, many years despite efforts of forward thinking companies. The good news is that there are people in the real estate industry who want things to change, too. Daniel Ruben, an agent, deducts two-thirds of his commission to customers who choose limited services from him instead of the full deal. He's basically a broker for agents who are willing to take a reduced commission in exchange for providing fewer services. Similar efforts have been made in New York City where Foxton's, a British company, has blossomed. Agents get about two percent commission compared to the regular 6 or 7 percent. Customers basically get to choose what level of service they want, and Clark loves it.

When you’re selling your home, should you try to sell it yourself or should you use an agent? What about doing something in between? Most people should hire a full commissioned real estate agent. But if you think you can handle the work on your own, you might want to try out a discount broker service that charges between one and four percent. Some of these are erealty.com and ziprealty.com. Foxtons, which operates in the North East, is charging as little as two percent. These services are getting so popular that traditional real estate brokers have had to lower their commissions to compete. Commission levels are falling to around five percent in some areas, and agents are not happy. In Texas, the real estate industry tried to make it a crime to use a discount broker. It didn’t work, and Clark is happy about that. People should be able to decide what level of service they want. So, how do you decide? If you are thinking of selling a house on your own, you must know that it’s not as easy as sticking a sign in your yard and letting the house sell. You have to figure out how to price the house, how to negotiate, and you must have a thick skin. You need to give it at least 12 week, and when it’s time to get professional services. If you want an agent for certain a la carte services, you will pay depending on what you want.