From the Raleigh N&O (Mutiny in broker ranks):
For 30 years, June McNamara played by the rules of Raleigh's real estate industry, charging 6 percent commission on every home sale she brokered. Then last year, she decided there was a better business model: She created her own real estate firm and started charging 3.9 percent commissions.
Former colleagues called her a turncoat.
"They were like; 'Et tu, Brute?' " said McNamara, who worked for several full-commission brokerages before co-founding McNamara Properties.
What McNamara is doing was largely unheard of just a few years ago. For about century, the real estate industry thwarted significant price competition by promoting standard commissions.
But a growing faction of brokers are refusing to the toe the line. They're setting up shops that undercut the higher rates. And -- in the clearest sign yet that the old-line fee structure is crumbling from within -- more traditional, full-service firms are encouraging agents to negotiate on price.
The National Association of Realtors is fighting back.
In recent years, the group has lobbied more than a dozen states to enact laws that prohibit lower-price business models. Last year, the association's Raleigh chapter discussed plans to block low-cost agent listings from the industry's local listing service. That effort was dropped after several Triangle discount brokers filed complaints with the state Attorney General's Office.
The article then goes on to describe how the study described in Freakonomics, in which real estate agents work a bit harder for themselves than their 6% clients, was a leading cause of the trend toward price competition. The agents realize that it is only fair to charge less for a low quality service.
Just kidding. The normal rules of cutthroat competition seem to apply here. Lower costs, due to increased information on the internet, reduced services and the housing price (its not a) bubble are driving the lower prices.
