A LETTER TO THE NJ REAL ESTATE COMMISSION AND NJ LEGISLATURE.

January 30, 2014

New Jersey Real Estate Commission     
20 West State Street
Trenton, New Jersey 08625

New Jersey State Legislature
P.O. Box 068
Trenton, New Jersey 08625-0068                                                                                                                         

First let me say that although this letter is on company stationery for compliance purposes the opinions stated are mine and not those of Help-U-Sell or its parent, Infinium Realty.

I have long recognized the unfairness of the percentage real estate commission system and the damage it does to New Jersey families.  I’m asking you to take action and here is why:  Under this system, sellers pay more as the value of a home increases but received no added service.  I have asked over and over on social media what a $400,000 seller gets EXTRA for the many thousands of dollars EXTRA they pay vs a $200,000 seller and no one can answer.  So why is it being charged?

The simple answer is that over the past several decades the real estate industry has shifted away from caring for the consumer to being totally agent oriented.  The industry is focused on hiring agents as a means of attracting business instead of giving the consumer value.  Here is the effect on NJ homeowners:

In 2013 just under 100,000 single family homes and condos sold and closed through the various MLS systems and were reported to the New Jersey Association of Realtors.  Sales outside NJAR are not included because they did not generate commissions.  If 30% of these sellers were to save an average of $3500.00 – both very conservative numbers – it would amount to over $100,000,000.  That’s ONE HUNDRED MILLION dollars taken from tax payers PER YEAR with no explanation.

I am proposing a simple solution be put in effect as soon as possible – a PRE-LISTING DISCLOSURE advising sellers:

How much of their commissions will be used to market other homes that do NOT sell?How much of their commission is paying for office administration and how much for commissions?

How many licensed agents will be paid from that commission and are they all necessary?  (It used to be 3-4 and is now up to 8 including brokers, agents, team leaders, referral agents and recruiting bonuses.)

If my home sells “in-house” and no outside broker is involved do I still pay the full amount and if not what is my savings.

If a recruiting bonus is paid to an agent, how much of my equity is going to someone who may live outside New Jersey and never even see my house?

How much of my commission will be spent on recruiting and training agents and what are the chances that someone now being recruited and trained will participate in my sale?

These questions and others need to be disclosed AT or BEFORE the listing is signed.  Disclosures like this are common from home and auto repair to medical procedures.  Why are our sellers not protected?

Please, DON’T PUT THIS LETTER DOWN.  Based on the conservative 30% participation figure each working day approximately 80 sellers are being taken advantage of without disclosure - about 10 each hour.  Act now!  New Jersey homeowners deserve your help.

Most Sincerely,

Daniel J. Desmond
Broker, Owner

Each Office Individually Owned and Operated