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American Real Estate Brokers may not be able to survive the coming collapse in Real Estate
The Real Estate Brokers are a protected community in America. No one can touch them. They protect themselves though lawyers, influential politicians and industry groups. The homes and properties are sold through “multiple listing” mechanisms in which individual home owners trying to sell their prosperities without paying the broker tens of thousand of dollars cannot list their properties.
The brokers are protected by real estate commissions of individual states. They have a close clout on the whole real estate business. The commission rates are between 2 and 6% of the sales proceeds.
The Real Estate Brokers exploit the Real Estate Agents who have to work for them by law in many states. The agents or sales persons do all the work. The brokers make money on these agents. The agents get their clients, deal with them and close the deals; the brokers literally sit and make money.
In recent days Real Estate Brokers have started giving mortgages and even have ventured into providing home maintenance contracts and title insurance. No one really cares these about the issue of conflict of interests.
These privileged class of people in America – the Real Estate Brokers may be facing tough time in coming days and may not survive. Like Airlines they may go belly up soon.
The reasons are as follows :
1. There are shortage of properties and people are less eager to pay the broker and their agents tens of thousands of dollars for what they do.
2. The Internet is killer for these brokers. The Real Estate brokers hope that common people do not get the information over the Internet on homes and properties.
3. The coming real estate collapse will trigger more backlash against these brokers. They and their associates carry errors and omissions insurance. But the collapsing prices may cause endless lawsuits starting from negligence to conflicts of interests.
4. The escalating energy prices make it tougher to heat the home and commute a long distance to work – the squeeze will eventually be transferred on the Real Estate agents and brokers.
5. There are too many Real Estate Agents and Brokers. As a result most of these brokers and agents will have hard time finding clients. In essence most of the homeowners have someone they know very closely who is a real estate agent!
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