As usual, Lucy Kellaway had an interesting article in the FT this week. This time her theme – rather than office life – was estate agents. She’s moving house. She pointed to the surprising health of the estate agency (realtors or real estate brokers in the US) market despite the obvious disintermediation threat of the internet. She was wondering how she became happy (well, almost) to pay more than £20,000 to an agent for very little apparent effort on their part. Her conclusion was that, since our homes were of such huge emotional and financial significance for most of us, we needed to some comfort that we were doing everything properly. Despite some concern (long ago now) that Propex could serve as some type of trading platform for institutional real estate investors, it’s still hard to see why investment agents still exert such a powerful stranglehold over the commercial real estate market. Here you typically have experienced specialists who trade fairly often. However, they still seem to want to pay agents 0.5%-ish of the sale price to market assets and 1% to acquire. That’s a 1.5% performance hit that is split between the buyer and the seller. I’ve heard of some sellers who appoint an agent to act for them even when they have a ‘walk-in’ (a buyer who literally walks in and – in a positive way = makes them an offer that they can’t refuse). Apart from sheer habit, investors may be happy to pay these fees for the same reason as Lucy – risk aversion. And, if sellers only sell through agents, then it’s pretty impossible to invest without them. Are there any real estate markets which have managed to function without agents?