As a full-service, full-time real estate broker in California who has successfully worked in the field for 20 years, I have seen discount broker stories before: 1966, 1979 and now 1989. All that David W. Myers’ story tells me is that we have reached another peak in a bull market, and we are less than a year from seeing sales fall sharply and prices either stabilizing or declining slightly for a while.
In a rapidly rising market, it is easy to find a buyer and very difficult to price or value property so as to maximize the seller’s investment income. Brokers are the surest way for a seller to protect himself as they give properties the widest exposure to the greatest number of buyers.
The statement that brokers’ costs have not risen as much as prices of homes reflects a naivete about even the cost of newspaper advertising, which has almost doubled over the past five years. And brokers are taking many, many more ads to get the job of selling resale homes done. During the same period, the number of documents and the responsibility of brokers assigned by the Internal Revenue Service and the state has grown 500%.
Lastly is the matter of liability assumed by all brokers in doing the right job for the consumer. When a buyer or seller uses a broker who is a so-called “full service” company he has the comfort of knowing that in good times and bad, whenever he has a problem or a mistake has been made, he has a place that is still in business to look to for satisfaction.
The discount brokers seem only to last one cycle, so they are fair-weather companies only. Look at the names today, none is the same as 1979. In real estate, like all other things, you get what you pay for.
JAMES R. GARY
Gary is president of James R. Gary & Co. Ltd., realtors and estate agents.