Townley says that the agency subsequently told him that, in total, it had taken 38 commissions worth about £1,900 on other jobs. The bill was then bumped up to £616 to include an additional fee for any invoices over £500.
#CLASS ACTIO REAL ESTATE AGENTS PLUS#
He claimed he then discovered that the £550 he had been charged actually consisted of the contractor’s fee of £412.50, plus a commission for Foxtons. He said he was dissatisfied with the quality of work done by a contractor who had installed a security light at the front of the property following a request by the tenant. Obviously, my rantings on this topic have done nothing to slow down the trend, so joining Compass was the best way to position myself for my clients.One of the first to do so is Chris Townley, a lecturer in competition law at King’s College London, who previously worked as a case officer at the Office of Fair Trading. Single agency is not what’s best for consumers or agents – yet the market forces are heading in that direction without recognizing the ramifications. Without constant reminders of how important it is to Get Good Help, buyers will be left to their own devices and just go directly to the guy who has the product – the listing agent. The reason disintermediation worked in the travel business because consumers don’t worry about a bad vacation costing them an additional five- or six-figures in resale costs (and major disruption of life) to unwind one. They will never know if they saved any money, they won’t know if they got proper representation (unlikely), and they will just take what they get. We’re sliding into single agency, where buyers/tenants will just go directly to the listing agent. The two women rented the apartment directly through the listing agent, and burned Kayla. The listing agent is present, and when Kayla goes into a bedroom with one of the women, the listing broker pulls the other aside and says, ‘if you don’t want to pay Kayla’s fee, just go through me directly’. Kayla is showing rentals to her old college roommate plus one other woman. Here’s an example that happened to Kayla in Manhattan, where the rental market is so hot that tenants have to pay their broker directly – and the typical fee is two months of rent. On this blog we talk about street-level impact. In effect, they ‘buy the business’ with lower cost/less service, and the consumer gets what they pay for.īut if this lawsuit prevails, causing MLS companies to be run out of business and ‘broker cooperation’ to get dismantled (seller paying the buyer-agent fee), the buyer agents will be the first casualty. This is where NAR and others have failed us miserably because nobody talks about how important it is for consumers to identify the skill level of agents they are considering.Īgents offer a discounted commission/rebate/fee-for-service because they don’t have the skill level to earn a higher fee.
But it is a great dis-service to tempt consumers to select their agent based on their fee. There is a whole legion of agents that offer a fee-for-service menu who think they are doing the consumer a favor.
While we’re on how NAR and others have failed us, let’s mention the latest class-action lawsuit:īuyer-agents are heralding this as the Big Turning Point is real estate because the lawsuit aims to ‘break up the cartel’ and unbundle real estate commissions.
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