BrokerageIndustry News

Commission rates up, but agents earn less

Study reveals reverse trend in seller's market

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...