RE Agent Commissions Fall

From the Record:

Agent commissions to total $56B

Real estate agents will collect a total of more than $56 billion in commissions this year, according to estimates from the Web site ForSaleByOwner.com. That’s down from $65 billion last year and $68 billion in 2005, at the height of the real estate boom.

Commissions on home sales average 5.18 percent, the site estimated. On a home selling for $267,700, the average price nationally, that comes to about $13,900 nationwide — up from around $9,700 in 2000, before the big run-up in home prices. But because the total number of home sales has declined — to a projected 5.67 million nationwide this year from 7.1 million in 2005 — the total amount of commissions paid has dropped.
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According to the NAR, the number of “for sale by owner” sales has been trending down. About 12 percent of home sellers sold without using an agent this year, down from around 14 percent in 2003. In about half of those sales, Singer said, the owners sold to a friend, relative or neighbor. In those cases, she said, “you’re not talking about homes entering the open market.”

Singer also cited research that found that an agent can help a seller get a higher price — high enough to more than pay for the commission.

A study this year from Northwestern University came to a different conclusion, however. It found that sellers in Madison, Wis., who worked without an agent got about the same price for their homes, but took significantly longer to sell.