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Discount Firms Keep Asking Why Broker Fees Are So High

American brokerage fees are one of the highest in the world. (Getty)

Old-fashioned questions about what justifies broker fees often come up when people set out to buy or sell a home — and discount brokers are enthusiastic about the conversation.

According to The New York Times, American homeowners and buyers pay agents the highest fees. In the United States, the standard rate is 6% and 3% is paid to the seller’s and buyer’s agents respectively. Compare it with Asia and Europe. In Asia and Europe, standard broker fees are as low as 1-2 percent.

Over the past two years, there have been a series of proceedings alleging that the residential real estate industry has colluded to keep brokerage fees high. Violates U.S. Antimonopoly Act In the process. Instigators range from the general public to the US Department of Justice, and some industry members are trying to offer consumers a discount model.

As the pandemic takes the online buying and selling process even further, discount brokers using an online listing and trading-based model have this theme in mind.

Last week, Redfin Presentation It will publish agent commissions on thousands of public lists.It’s a move in the spirit of the Justice Ministry Reconciliation agreement Work with the National Association of Real Estate Agents to make agency fees more transparent to consumers and fix misleading ads in the industry.

A few weeks ago, Oregon’s securities company, REX Real Estate, filed a state lawsuit challenging the state’s policy of prohibiting securities companies and agencies from refunding fees to buyers. Securities companies are considering filing similar proceedings in Louisiana, Missouri and Tennessee.

According to the company, the logic behind the proceedings is based on the view that homebuyers are doing more and more work to find homes without the help of agents.

“You’re starting to see a kind of drum beat,” REX’s legal counsel Mike Toss told the Times. “Buyers do a lot of their work, so why are the fees so high?”

The ongoing proceedings and positioning of companies like Redfin and REX show that there is no pressure on the industry to reduce fees and intensify competition in the industry.

[NYT] — — Erin Hudson

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