Industry News

War on real estate commissions

Future-Proof: Navigate Threats, Seize Opportunities at ICNY 2018 | Jan 22-26 at the Marriott Marquis, Times Square, New York

The unwritten, unspoken 6 percent benchmark for real estate broker commissions is no longer a benchmark, nor is it 6 percent. Also, traditional ideals of an even 50-50 commission split between the listing broker and the buy-side broker are under pressure in some markets. Something fundamental is shaking the foundations of agent commissions. Whether it is an isolated fleeting tremor or a nation-sweeping groundswell depends on your perspective on the market. During these past few years of robust real estate growth, as membership in the National Association of Realtors has swelled to about 1 million and home prices are setting records in many regions, commission rates have dropped. In fact, average mean commission rates declined from 5.4 percent in 2001 to 5.12 percent in 2002 among hundreds of firms that offered data, and that rate remained at 5.12 percent in 2003, according to research by Real Trends, a real estate publishing and communications company. Take an Inman Pulse survey o...