The total commissions paid to real estate agents dropped in 2009 6.2 percent. This reflects the slowing home sales across the country as the commission percentage paid to agents actually rose from 5.26 percent to 5.29 percent.
Another factor that influenced the lower commissions was the price of homes sales. The federal government had the first time homebuyers program in effect during much of 2009. This subsidy motivated first time buyers to enter the market, but it also lowered the average price per home sold.
And we all know the math, lower home price x commission percentage = lower commissions for the same amount of work.
Let’s hope 2010 shows some more velocity in the higher ends of the markets so agents will be able to earn a better living.
The dollar value of agents’ commissions skidded to its lowest level in seven years in 2009, according to recent studies by a real estate consulting firm and the Bloomberg news service. RealTrends, based in Littleton, Colo., and Bloomberg came to similar conclusions that through November, sales commissions totaled $40.6 billion, a drop of 6.2 percent from the year before. via The Baltimore Sun
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Don’t forget about the short sales that have variable commission’s that aren’t determined until after the offer process. These transactions typically max out at 5%, reducing the delta homeowners eat at tax time. Many sellers are just don’t have any equity to work with and can’t afford to write a check at closing. Hey, anyway you look at it, 2.5% of something is better than 100% of nothing. I’m believing for a strong 2010!!
I’m guessing the buyer’s agent commissions increased. In the past a listing agent could offer less than half to the buyers agent since there were so many buyers. This has flip flopped and the listing agent is the one taking it on the chin now.
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