Internet beginning to impact real estate selling, buying
Changes are coming to the real estate market according to this Wall Street Journal story (subscription required):
Last spring, the National Association of Realtors, which operates like a medieval guild to protect its members, proposed rules that would have crippled a couple of upstarts that are using the Internet to undercut the 6% or 7% commission that agents traditionally collect on each home sale. Last week, after noisy objections from the newcomers and signs that the Federal Trade Commission was watching, the NAR retreated.
...The battlefields are the multiple listing services (MLS) operated by local associations of NAR members, called Realtors, in which brokers share data on houses for sale. These lists date to the late 19th century, when brokers traded 3-by-5 cards, and were computerized in the 1970s.
...In 1999, two online brokers, eRealty Inc. (erealty.com) of Houston and zipRealty Inc. (www.ziprealty.com) of Emeryville, Calif., arrived. Each firm employs full-fledged Realtors with access to the MLS, but doesn't have storefronts. After requiring customers to register on its Web site by surrendering an e-mail address, each treats Web users as customers entitled to the same information available to a customer who walks into a Century 21 storefront. Each posts everything on the MLS no matter what the listing broker's wishes.
The upstarts also took another step. They undercut the traditional 6% or 7% commission, generally paid by the seller and split between the buyer's agent and the seller's. To the seller, eRealty and zipRealty offer commissions as low as 4.5%. To buyers, they offer a rebate of as much as 1% of the purchase price, a $1,600 value on a typical house these days.