BrokerageIndustry News

Commission rates up, but agents earn less

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Are commissions going up or are they going down? New data from America's top real estate firms holds some interesting answers to this often-contentious debate. Recently there has been a spirited debate among Inman News readers about the future of agent compensation. What few people are discussing, however, is a pattern that has been consistent for the 30-plus years I have been in the business. Commission rates are primarily contingent upon whether an area is experiencing a buyer's or seller's market. In 2005, I wrote a book called "Waging War on Real Estate's Discounters." In that book, I outlined how to use the full-service real estate model to compete with cost-cutting competitors. When agents compete exclusively on price/commission, they are treating their services as a commodity. Another way of looking at this is to say, "A potato is a potato is a potato." Thus, it's smart to choose the lowest-priced potato. Since 15 percent of all clients choose t...