Real estate commissions rise
Home sellers were in the driver’s seat and the real estate agents were courting them – most often at bargain commission rates. This was during the housing boom. But now, the bubble has burst–the tables have turned the other way.
In 1991, 6.1% was the average commission rate, according Steve Murray, of Real Trends, a company that tracks the brokerage industry. In 2001, the rate inched down to 5.4%, and by the end of 2005, it stood at 5.02%.
With the competition of discounts and the web-based brokerages, industry insiders projected further decline. In early 2006 a drop into the 4% range was expected within 5 years.But when home sellers found themselves with houses sitting on the market, they became increasingly amenable to paying higher commissions. Real Trends reports the average commission reversed its course and climbed to 5.18 percent in 2006, and it looks like it’s going to end 2007 with another rise.