Bank of America Executive Says Real Estate Commissions Under Severe Pressure; Integrated Real Estate Services Critical for Survival

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Las Vegas Â? October 14, 2004 -- Steve Ozonian, National Home Ownership Executive of Bank of American told the Real Estate Services Providers Council (RESPRO) that real estate commissions remain under severe pressure and are likely to continue to feel that pressure.

Steve Ozonian, National Home Ownership Executive of Bank of American told the Real Estate Services Providers Council (RESPRO) that real estate commissions remain under severe pressure and are likely to continue to feel that pressure.

Mr. Ozonian told the RESPRO Fall Seminar that “While price increases have mitigated softening commissions, an expected slower housing market will put even more pressure on commissions.”

Survival and success, Mr. Ozonian indicated “will be about brand and providing more service today; in short, by having more integrated vertical services.

“This is a home ownership industry,” Ozonian continued, “not just a space comprising a realtor, a mortgage lender and an insurer. It’s a combination. These days consumers don’t care about those moving pieces; the consumer wants an efficient transaction process for home ownership and we’re clearly headed toward the bundling of services and the creation of a platform that will provide the consumer with a better level of service at a better price.”

The Bank of America executive pointed out that Bank of America is leveraging its capabilities for its customers in every element of home ownership, using joint ventures and partnerships with real estate companies that can provide “the same excellent level of service Bank of America provides.” In doing so, Ozonian said, we are offering our customer a level of confidence that customer needs by “providing the best in class services with partners,” and therefore “bundling” home ownership services.

Addressing the use of the Internet in the real estate industry today, Ozonian said “Most of the Internet action is on the buy side of the transaction, but there’s an increasing focus on the seller’s side now as well. Big brands in real estate are becoming very concerned about completion in the Internet, especially in terms of lenders.” This, he noted, of course mitigates toward the packaging of real estate services, that is, realtors offering not only traditional real estate services, but mortgage lending and homeowners and personal insurance services as well.

Mr. Ozonian also observed that “we’re seeing significant change in the real estate industry including the return of salaried real estate models, as well as rebates and discounters. But there is no question that in this new economic environment it is critical for realtors to cross sell and offer the services to make that cross sell appealing to the customer. As they do, consumers will recognize that the bundling of products and services will yield them lower costs.

ABOUT RESPRO

The Real Estate Services Providers Council (RESPRO®) is a national non-profit trade association that unites providers from across the home buying and financing industry towards one common goal: to promote the efforts of all providers to deliver convenient, innovative and cost-effective services to homebuyers and home owners through strategic alliances across industry lines.

CONTACT

Joseph S. Cavarretta

Membership and Marketing Director

Real Estate Services Providers Council

2000 L Street, Suite 522

Washington, DC 20036

(202) 862-2051 x212

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