The 6% Realtor Price Gouging That HBS Students Are Trying to Reduce

Every time a city dweller buys or leases a new home, they pay a realtor a handsome fee. Realtors generally receive a six-percent cut of home sales and an eight-percent cut of rentals.

"I've lived and worked in Boston for 4 years," says James Light, "and every time I look for a new home it strikes me how high realtor fees are. An 8 percent commission for showing an apartment that is guaranteed to sell? That's just crazy."

Sellers, too, lament the state of realtor fees. "When I sold a property in Houston, I was frustrated that I had to pay a full realtor commission, even though I did many of the showings myself!" exclaims Aaron Stolear, a real estate investor earning his MBA at Harvard Business School.

Aaron's up-and-coming Harvard Business School startup, Competitive Realtor, thinks the solution lies in a new realtor market place. Their service matches quality, low-fee realtors with buyers and leasers who need minimal services, such as those who conduct their own online research.

"Why pay more for extra services?" asks Aaron. "75 billion dollars are spent each year on realtor fees. Do we really need to spend that much?"

"We are a group of Harvard MBAs who were frustrated with the high cost of realtor fees," the founders write on their site. "So we started 'Competitive Relator' -- a venture that allows real estate agents to bid for your business, finding you the lowest fee. It's a competitive marketplace that matches inexpensive realtors with high quality clients."

Visit Competitive Realtor at:
http://www.competitiverealtor.com/