The changing world of real estate.

• Author: Cutler, Debbie
• Position: Alaska - Includes related article on For Sale By Owner Assistance Program - Industry Overview

Interest rates are low. The real estate market is stable, and in fact, there has been an increase in the number of residential homes purchased, as well as new construction permits issued. It's both a buyers' and sellers' market. Everything's just fine in the real estate industry. Right???

Wrong.

According to John McCracken, research director for the Anchorage Economic Development Corporation (AEDC), there is continued competitive pressure in the real estate industry, as well as its sister industries, finance and insurance. During 1997, 27 jobs were lost in the three fields due to technological improvements, increased outsourcing activity, and the relocation of existing services. This year these sectors are expected to face more pressure to downsize - even with low interest rates.

In this only-the-fittest-prosper world, some are high-wheeling it with dollars that once belonged to the competitor. The reason?

"It's been a dog-eat-dog world in the real estate industry for some time," said Ken Kincaid, owner of Kincaid & Riley, an Anchorage-based appraisal consultant company. "The real estate industry has always been very, very competitive, as are the appraisal and broker industries."

What's different - and worrisome to many real estate agents - is that the large are getting larger, the small are staying small, and the middle rungs are closing shop or moving in with the competition.

"Visualize what's happened with the airlines," Kincaid said. "They provide less, but you sure get better prices. Large brokers are offering more discount prices on selling houses. It's a big issue."

Discount brokers work directly with the customer - cutting out the commission usually paid to the agent. They help on a "what do you need" or "what can I get for $1,000" type arrangement. The customer only pays for the services rendered.

There are probably half a dozen or so discount brokers in the Anchorage area, including Assist U Sale and Greg Erkins Realty. Another option is the For Sale By Owner Assistance Program, which offers discount services at a set price. Even Costco is trying to edge into the market, though there's legislation being introduced to try to prevent the warehouse-giant from entering.

If Costco gets its way, a home-selling member could call a toll-free number to connect to a real estate service provider. Upon sale, the consumer would receive as much as $6,000 in the form of a cash rebate or real estate fees. If an arrangement of this sort was worked...