FSBO

Once again the New York Times reveals a puerile lapse in editorial vision by publishing a story on the front page today about two young women in fuzzy slippers who have a Web site devoted to selling real estate by homeowners (“Owners’ Web Gives Realtors Run for Money,” January 3, 2006, A1). What a scoop, you might conclude. The whole issue of FSBOs (For Sale by Owner), however, is just another non-story in the broader trumped-up national controversy surrounding commissions earned by qualified and licensed REALTORS®. There is simply no story here, and there is no issue—except what the press seems to want to wad up in its shorts. Citizens have been selling homes to one another on their own since the first deed changed hands in the colonies several hundred years ago. And to this day, no one is required or even obligated to pay anybody a commission to sell real estate that they have not contracted of their own free will to pay. What’s more, there is no set commission rate for a REALTOR® in a real estate transaction. It could be 7 percent; it could be 6 percent; it could be 4.75 percent, or 3 percent, or whatever the traffic will bear. Real estate is a very competitive business for REALTORS®. This translates into a wide range of choices that are ultimately most advantageous to the educated consumer and not to the real estate professional, who is bound by extensive licensing laws, required education, and codes of conduct to hold both buyers and sellers they represent harmless from any financial or moral injustice that either party to the transaction may wish to perpetrate.

Some observers in the press, not to mention the Department of Justice, seem to have a fixation on real estate brokers that reflects the bad rap earned by used car or snake oil salespeople. After all, this is not brain surgery, they seem to think. Well, compared to used cars and snake oil, it is brain surgery. A real estate transaction for many people is one of the most significant and complex financial decisions in their lives. The transaction is subject to a variety of legal, financial, social, and government regulations, taxations, and fees that usually require the services of informed professionals, even attorneys, to execute. In other words, REALTORS® earn every penny of their commissions, unlike those who aren’t.