Real Estate agents treat the 6 percent commission as doctrine when talking to clients, you can not change it no matter what. But in reality, new studies are showing that average commission paid has dropped to 5.1 percent and looks to go down near 4 percent in the next 5 years.

This trend is being fought desperately by the old line agencies, but newer firms are already implementing some of the changes and are doing very well. With internet tools being used more often and now being more effective then ever before, the exclusivity that real estate agents possessed is quickly eroding.

Real Trends, a real estate research and publishing company, has reported that the average commission rate among the nation’s top brokerage dropped to about 5.4 percent in 2001 and now averages 5.1 percent. That will fall to about 4 percent in the next five years, said Dave Linder, chairman of national real estate brokerage Re/Max.

For brokers, that means the end of the era of nearly guaranteed sales margins, and the start of a new line of price competition. For consumers, it means an increasing array of price and service options in home selling and shopping.

Some new brokers advertise full service at reduced rates — generally 3.9 percent to 4.5 percent.  via blackenterprise.com

This transition will change the industry, and it may be for the better. Presently there is a glut of agents as people get into real estate thinking it is easy money. When the fees shrink, it will chase away many of the pretenders, and provide more room for the true professionals to operate.

So in a way, lower commissions will clear the way for the true professionals and develop a better and more efficient marketplace.

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