More on Dropping Real Estate Commissions
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Real Estate commissions are have dropped to an average of 5 percent. The combination of an increased supply of new agents who are competing on price (commission) and the new technology that makes it easier for deals to get done by qualified agents are leading to this.
One reason for the drop is tied to the boom in housing prices in recent years. According to James Hagerty in The Wall Street Journal Online, “Residential real-estate commissions in the U.S. totaled $61 billion in 2004, up 42% from 2000, estimates Real Trends, an industry publication.” That wasn’t exactly good news for real estate agents, he explains, since their ranks boomed, too. The National Association of Realtors has seen its membership swell by some 63% since 2000, to roughly 1.25 million people. This was enough to drop the median annual income for Realtors by 4% between 2002 and 2004, to $37,600. via the Motley Fool at MSNBC.com
Where do you think commissions are going to be in 5 years?
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That is too funny! 
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Comment by Larry Nusbaum on 21 September 2006:
In the commercial world commissions are negotiable and usually are part of the contract. Don’t know why they are so fixed in the residential world.
Comment by Trevor Smith on 25 September 2006:
The housing boom rightly caused real estate commissions to fall. I mean, what other industry received a 20 - 50% pay raise over the last few years? As the market slows I believe commissions will rise, and the number of licensed agents will drop. However, don’t expect the days of the 6-7% commission to ever return. I think 5% is the new 6%. I also expect the splits that Broker’s demand from there agents will continue to fall along with commissions.
Trevor Smith
Seattle, WA
http://www.4percentrealestate.net