An open letter to real estate agents from home sellers. In the letter home sellers describe their frustration over the cost to sell a home today and warn the agents that a new era of fair compensation is about to descend on the real estate industry.

1. An Open Letter to Real Estate Agents

2. Dear Agent:
Let me start by saying that I like you, I need you
and I respect the work that you do. I have no interest
in selling my home by myself and I look to a
professional like you to help me out with that. But I
have a problem, and it is a touchy subject. It is
something all of us home sellers think but are too
afraid to say out loud. But I have summoned up the
courage to tell you and I am going to tell you now.
You make too much money for the service you provide.

3. I know you are highly trained, so are we. I know you
work hard, so do we. And we work especially hard for
our home equity, much harder than you do. We save
for years just to get a down payment on a grossly
overpriced home. Then we make mortgage payments
for years, that as you know, are mostly interest at
first. And if we choose to sell or have to sell before we
pay it off, it seems to me that the proportion of our
equity you receive is not commensurate with the work
you have done, relative to us.

4. Let me tell you how devastating your traditional
commission structure is to our well being. When you
sell our home with your percentage-based commission
structure, you may make 6%, but you take much
more. As a result of recent economic events, many of
us are stuck with miniscule equity in our home. If we
bought a home for $375,000 several years ago, we
may be lucky to sell it for $400,000 today. So, you
may be making 6% of the sale price, but you are
taking 100% of our equity. Equity we need to buy
our next home, or even to afford a down payment on a
rental. Your commission formula can set us back
years in our lives.

5. Now, if the job of real estate agent had been getting
harder or more expensive over time I might be able to
understand the fees you charge, but it hasn’t. In fact,
just the opposite has happened. Your job has been
getting easier and cheaper as you have held steady to
your incredibly unfair compensation.

6. To put things in perspective, since the launch of the
personal computer revolution in the mid 80s, the cost
of computers has dropped by 80% while computing
power has risen by a factor of 1000. In that time
period personal productivity has skyrocketed as a
result of this new technology in all industries,
including yours. Can you even contemplate what it
would have taken thirty years ago to advertise a
listing to the entire planet? Today you can do it for
free in minutes on a myriad of websites, including
your own.

7. But in that same time period, as your expenses have
dwindled and your productivity has increased, what
has happened to your fees to sell a home? They have
tripled, rising at the same rate as housing prices.
Perhaps you can understand my frustration.

8. I do not blame you for your fees. If I were a real estate
agent I would do what you do: defend them as if my
livelihood depended on it. I would attend the same
seminars you do on how to overcome commission
objections. Most home sellers are terrible negotiators
and you confidently use that to your advantage. No,
I do not blame you for your inequitable fees. I blame
myself.

9. I have been too lazy and too intimidated by this large,
infrequent financial transaction to seek a more
beneficial outcome for myself. As a result, I have
abdicated my control in this matter and relinquished
it to you. My penalty for doing so is that I have had
to live with your commission rules. But that time is
over.

10. I am taking back control. I am committed to being
less intimidated, more educated, more savvy and
playing a more proactive role in the sale of my home. I
still intend to use your services, just as I choose to use
those of the painter and the plumber. I could paint my
house or fix the toilet, but I choose not to. Likewise, I
could sell my own home, but I would rather have the
help of a professional. And just as the plumber and
painter are willing to work for fair compensation,
unrelated to my home’s price, you and I will work
together to find a more equitable compensation for
both of us. One that will still allow you to make a
terrific living as a real estate agent, while leaving my
equity alone.

11. There is a new day dawning in the residential real
estate industry. Change is coming, and it does not
depend on you or any new technology. It depends on
me and my changing behavior. And as I change my
behavior, you too will have to adapt. You will have no
other choice. There will soon come a time when you
have to choose between a listing that is more fair for
the seller or no listing at all. I feel confident you will
choose wisely.
Regards,
Home Seller