Rising tide of agents makes waves in real estate sector

When Craig Griffiths was ready to off-load his Fort Collins investment property, he didnt think twice about whom to call.

“Robertos a great guy,” Griffiths said of his real estate broker Roberto Ortiz, who owns Buyers and Sellers Real Estate in Fort Collins. “He helped us buy the property in the first place.”

The fact that Griffiths returned to the same broker is, for anyone in business, a sign of a job well done. But whats slightly different is that Ortizs operation is just one of the more than 300 Assist-2-Sell franchises in the nation that offer either flat fees for specific real estate services or a straight 4.5 percent commission.

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Griffiths opted for the low commission program. His house sold for $224,000 and Ortizs fee amounted to $10,080. While real estate commissions are generally negotiable, the industry standard is about 6 to 7 percent. If Griffiths had gone with a broker charging 6 percent, Griffiths would have paid the agent $3,360 more.

Menu-based Realtors arent new to the scene, but they have been garnering more attention in todays market where home prices have increased 8 to 10 percent over the past few years and customers have begun to question the standard commission rates.

Because the housing industry is flourishing in an otherwise uncertain economy, new brokers seem to be crawling out of the woodwork.

The National Association of Realtors recently reported 1 million members, making it the largest trade association in the country. In the state of Colorado there are more than 43,000 licensed real estate brokers, a 10.7 percent increase from 2000. Of course, not every broker with a license is actually practicing, but among Realtor associations, the increases are even greater than the licensing numbers.

With 22,668 members, the Colorado Association of Realtors has shown a 22.5 percent increase from March 2000 to March 2004. Locally, Realtor associations in Fort Collins, Greeley, Loveland/Berthoud and Estes Park have seen their numbers grow a total of 21.5 percent from 2000 to 2004. Greeley leads the pack with a 35.8 percent increase in that time frame; followed by Loveland/Berthoud with a 26.1 percent increase; Fort Collins, up 13.5 percent; and Estes Park registering an 11.7 percent increase.

“With so many layoffs, people who lost their jobs are looking for something, and theyve heard that real estate is a great career,´ said Don Mogorit, managing broker/owner of Re/Max Action Brokers in Fort Collins.

“Ive seen a huge number of new brokers coming from Agilent, Hewlett-Packard, Celestica or LSI,” Mogorit said, referring to high-tech companies that have cut back on jobs in recent years. “It is great if youre in it as a career professional, but as a substitute income source, its very, very difficult.”

Mogorit knows all about competition in the industry. Just this month he left Crawford-Neal GMAC Real Estate to launch the newest Re/Max franchise in Fort Collins. He started with seven associate brokers cultivated from other agencies, and in just a few weeks he added another five. He expects to have 17 associates by the beginning of May. In a years time hes shooting for 50 associates to fill a new office hes building in east Fort Collins.

But Mogorit said the apparent glut of real estate agents is somewhat exaggerated.

“A lot of brokers get their license strictly to buy and sell their own homes, or investment properties,” he said. “There are a lot of retirees entering, just looking for some extra income.” Also, many real estate agents are listing just one or two houses a year, he said, whereas professionals list and sell at least 10 properties a year.

Mogorit said he does not see the menu service companies as a threat.

“All commissions are negotiable,” he said, adding that the accepted standards for real estate commissions in the area range from about 5.5 to 7 percent.

“The bottom line is that well-marketed homes sold by professional real estate brokers sell rather quickly in this market,” he said.

Jerry Crawford, president of the Fort Collins Board of Realtors, agrees with Mogorit, his former associate and new competitor.

“The fee-for- service companies are good little companies. They offer a different service and it makes for good competition,” Crawford said. “I dont see it as a threat, its just the American way. People have the right to charge what they want.”

While others in the industry may be dropping their commission rates, Crawford said his company has not. “Ill always be a traditional full-service Realtor,” he said.