Damon Darling of the New York Times, and also the Walk-Through weblog, has an outstanding article on the end of the 6 percent commission. He does an outstanding job of leading the reader throught the rise of the internet as a force for unleashing information and opening up the door to companies such as RedFin to change the landscape of real estate transactions.
This has been a theme of this site as we have chronicled the technological and social pressures that are changing the real estate landscape. The rise of the internet has broken the information monopoly that has maintained the high commissions of real estate agents.
They combed Internet listings of homes for sale until they spotted a four-bedroom house on a cul-de-sac with a three-car garage and 2.5 acres.
But the seller’s agent refused to show it to them. Why would she turn away an eager buyer? Not because of the Wolfs’ race, creed or color. Instead, Mr. Wolf, a software engineering manager at the online directory InfoSpace, said he and his wife were shunned once the agent learned they used an online broker called Redfin.
Mr. Wolf said they turned to Redfin because it gives two-thirds of its sales commission (which is usually 3 percent of the sale price) to its customers. “I didn’t want to pay 3 percent for the opening of a door,” he said. But customers like Mr. Wolf — affluent and comfortable with the Internet — are a frightening prospect for real estate agents who, as a group, reap at least $60 billion a year in commission income. via New York Times.
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