Industry News

Don’t worry, be ready for real estate downturn

Experts urge industry to track costs, reevaluate advertising options

Slumping real estate markets can lead to a higher dropout rate among real estate agents and higher marketing costs to lure buyers to a for-sale home – and there's also the potential to prop up the shrinking real estate commission rate. Bob Moles, chairman of Intero Real Estate Services, a fast-growing, three-year-old real estate brokerage based in Cupertino, Calif., said that while there has been a general downward trend on the average commission rate that agents receive in real estate transactions, a market downturn could temporarily reverse that pattern. "When and if the market cools, you have an opportunity to reverse that trend for the period the market cools," he said. The rationale: "When the market is a little tighter, people pay a little bit more to sell their homes." Historically, home sellers have paid about 6 percent of the sale price of their home to the real estate agent who listed the home, and listing agents have typically offered roughly half of this amount t...