Dominic James, who describes himself as a property specialist in the UK, released a new report explaining why real estate agents charge such high fees, and explains why his model, "No Sale, No Fee" is much better.

He claims that the circumstances are now right to change the way people sell their homes. The popularity of the internet makes his new model possible.

I'm not sure I agree.

Having done Internet marketing now for years, I'm not seeing the Internet as an effective transaction tool. It's certainly good for marketing properties and creating leads, but not for transacting real estate. People still want a real live human being to do transacting for them.

I realize that Dominic's "No Sale, No Fee" method still involves a real live human being, but when homesellers learn that this agent won't be paid if their house doesn't sell sends the message that this agent is going abandon them if it doesn't sell right away.

The issue is trust. Selling a home involves hundreds of thousands of dollars. It's serious business, and one that is tied to time. People don't want to experiment with a newfangled business relationship under such circumstances. People want something they know, understand, and recognize. That's why the 6% fee arrangement continues to thrive.

Not to say that Dominic James has a bad business model. I'm sure he's done his homework. But he'll continue to work in a sphere that attracts a very specific demographic. The idea of his model being ready for global domination, is off the mark at this point.

Given time, however, I'm sure new fee arrangements will succeed. The Internet will certainly play a bigger role as time moves on.

Labels: Realtor-Fees