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I don't think you know what the MLS is. The MLS was paid for and created by brokerages to share information and compensation with the other brokerages. Originally it was never intended for any public use.
Ancient history.
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Actually, you're correct in that the MLS will eventually go away. Nothing is forever. But me ask you this, if the MLS were to cease existence what would take it's place and how would the information get there?
There is no need for an MLS if brokers aren't involved. The value is in the copyright of organized data not the data itself. The "system" is a different matter altogether.
The internet has been around for a long time. Agents only make money when a deal closes and then they must split that commission earned with the "house" or their brokerage firm. The split varies. As a 30+ year broker, nothing will change unless and until the real estate business becomes less of a "barnacle type" business and more a regular sales business. A broker attaches him or herself to a really good agent and then subsists off what that good agent earns. Even a mediocre agent earns money for the broker. I have preferred to pay every single one of my own costs, including all advertising and therefore earn 100% of my commissions. I am paid on productivity and every month I put my money on the "come" line that I will be successful in each succeeding month. If it was more "fun", they wouldn't call it work. My business relies on referrals and thus far has allowed me to put all my children through college without debt. I work almost 24/7.
If the agent in the rust belt cannot make a living because their model does not generate adequate revenue, they need to reconsider their model.
If the consumer in SF decides to pay a commission they don't like, they need to reconsider their decisions.
But, there is no "standard" commission.
The Agent often doesn't set "the model" - its always been the broker and now with all these very large outfits it's probably corporate HQ to a large degree.
Sure, the agent can have various methods to increase their odds. But anyone looking at a chart of Realtor Incomes will see that it's rarely a career. The figures are given in Gross Income and since most all Realtors are private contractors, that means they have a massive amount of overhead....
Car
Gas
Clothes
Phone
Internet
Marketing (much of this is on them)....
I've known some really aggressive and hard working and effective Realtors who made a decent buck. However, if they were selling something else and put the same energy into it, they probably would have made a lot more. As an example, a Pharma Rep can easily make 120-150K in our neck of the woods. I know independent reps (in various fields) that make from a low of 150K to a high of 500K+ (Gross - they pay their own expenses).
I've sold a number of residential properties myself - not to save money, but after I listed with Realtors and they failed to bring a single offer in 6 months. We once had a Realtor say he wouldn't even take our listing because "too many properties are for sale and you'll never sell it". We sold it- from a classified ad in the local free shopper-paper.
It is a bit of a mess how that is the standard. A realtor in a depressed rust belt city is going to work their tail off and potentially have a listing on the market over a year and get 3% of 60k. A realtor in San Francisco is going to get offers as soon as they put it in the MLS and get 3% of a million.
In a free market more agents would simply move to areas where the market is "hot" and they will move out of areas that are depressed. No one is forcing RE agents in Mansfield, Ohio or Pine Bluff, Arkansas to stay where they are.
If there are not enough agents in a given area you will get plenty of work. If the market is saturated with agents you will be forced to compete with others in your industry. Every adult has to consider these trade-offs.
Yeah, was more common to find realtors back there that were just homemakers who did it on the side for some supplemental income. Just definitely a much more difficult job in those locations with far less pay.
In a free market more agents would simply move to areas where the market is "hot" and they will move out of areas that are depressed. No one is forcing RE agents in Mansfield, Ohio or Pine Bluff, Arkansas to stay where they are.
If there are not enough agents in a given area you will get plenty of work. If the market is saturated with agents you will be forced to compete with others in your industry. Every adult has to consider these trade-offs.
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Agents don't leave their "sphere of influence", they don't move from "market to market". There is NO tradeoff, agents simply have to bite the bullet and work harder and smarter in a declining market. The cream always rises to the top.
In a free market more agents would simply move to areas where the market is "hot" and they will move out of areas that are depressed. No one is forcing RE agents in Mansfield, Ohio or Pine Bluff, Arkansas to stay where they are.
If there are not enough agents in a given area you will get plenty of work. If the market is saturated with agents you will be forced to compete with others in your industry. Every adult has to consider these trade-offs.
In a free market, which we have in this case, a brokerage that needs 40 agents will hire on 100+, making it so that the pie is sliced up into smaller chunks.
In a "free market" the brokerage corporation could care less if only 5 of those 100 make a real living. That is the current case in a lot of markets, although many realtors "gave up" after the recession or became foreclosure or short sale specialists.
In a free market, the brokerage could care less if the Realtor lived in her car...and received SNAP due to low income. As long as the phone works and she/he has somewhere to take a shower...
Note - no discussion about "a living wage", that old saying "work hard, follow the rules and you will have enough to live and raise a family on".....
That's "Happiness and General Welfare of the people - not "free market"...
The very idea that Joe or Jane should move away from their children, their heritage and possibly sick or disabled family/relatives to chase the newest hot spot doesn't seem like the recipe for a sustainable culture. But, then again, the Free Market doesn't care about sustainable. It cares about profits - this and next quarter.
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