December 26, 2007
Billions in savings: Will real estate consumers extend a helping hand?
It's Christmas 2007, and I am visiting extended family in St. Louis, my beloved boyhood home. Missouri is the "Show Me" state, so it's a fitting setting to ask how much money have real estate consumers really saved since McKinsey & Company predicted that industry restructuring could deliver $30 billion in annual savings ten years ago?
Last week, BusinessWeek's real estate blog, Hot Property, reported that home buyers and sellers paid $55 billion in commissions in 2007, down $13 billion from the peak in 2005. They attributed the decline to falling sales and noted that consumers paid $19 Billion more than 2000 "largely because of the surge in home prices during the boom."
What caught my attention was an estimate that "‘for sale by owner’ sellers saved almost $9 billion in home value that they otherwise would have paid to real estate agents." That figure is just shy of the $10 billion in savings from real estate brokerage commissions predicted by McKinsey & Company in January 1998.
How much more money did home owners save by using a flat-fee MLS listings services in 2007, AND how much more money home buyers receive via real estate rebates?
My guess is that those savings also exceeded $1 billion in 2007, and will grow in the future. As a "Change Agent," my question is whether home buyers and sellers are willing to share some of those savings with charitable causes? (Think "pay-it-forward" meets real estate savings.)
ChangeAgents's goal is to create a voluntary coalition of money-saving real estate business models and to invite their clients to share fraction of their e-commerce savings with local, national, and international causes of their own choice. Here's one example of a "community commission."
If you're part of the new generation of real estate companies delivering billions in savings, or if you're hoping to sell "for sale by owner" or receive a real estate rebate check in 2008, would you like to join our conversation about ePhilanthropy & Cause Marketing in real estate?
Please let us know what about your own dreams for 2008 and a better world.
Bill Wendel | 02:02 PM in "We" companies, ASAP: AIDS Shelter Alliance Partners, Change Agents, Commission Reform, Do-it-yourself, Fee-for-service, FSBO: Best Practices, FSBO: For Sale By Owner, In the News, Market trends, Savings & Rebates, Spiritual Home, Unbundling the Commission | Permalink
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