October 15, 2006
One way to compete
Real estate agents, like many brick and mortar businesses, have been under increasing pressure from the internet in recent years. With so many sites allowing free access to property listings, the need for many services traditionally provided by an agent or broker is reduced, particularly the previously almost irreplacable one of assembling a list of properties to consider.
The real estate agents do have an advantage though: at the moment, licensed real estate brokers have exclusive access to the Multiple Listing Service, the central database of properties for sale. Information on this is available here. Essentially, it's a database created by a network of licensed real estate agents/brokers, and they're none too keen on sharing their information with discount online dealers. Potential competitors allege anti-competitive practices, and both the FCC and DOJ have taken an interest in the subject, which can't make licensed brokers happy.
But there's one player in the Austin real estate market (sponsored link) that may have found one way of competing with discount brokers. They give half of their commission - usually 1.5% - as a rebate to the buyer. The 3% of commission of the seller is obviously untouched, as they don't have anything to do with that, but it cuts the commission overhead on the sale by up to 25%. This is no bad thing.
It will be interesting to see how this works out. 
