Real estate sales commissions are in flux.
Sales fees were expected to decline in the aftermath of the class-action suit settlement between the disgruntled home buyers and the National Association of Realtors (NAR). And they did.
But now, it seems, the rates agents charge to buy and sell houses are back where they were – and then some.
A few weeks after the settlement, a survey conducted by RISMedia, a real estate publishing company, found that commissions had fallen by 68 basis points, or 0.68%.
At the time, the company called the decline “very significant.” Indeed, in terms of money, 068% translates into a loss to agents of $2,870 on a median-priced house selling at a 6% fee.
But the sample size was small. After all, more than a million agents are at work in real estate.
Then, in February, at the 150-day anniversary of the settlement, another survey found that commissions had not only rebounded but returned to normal.
According to AccountTECH, a Canadian firm with provides back office software for real estate brokerages, sellers were paying their agents an average of 2.73% of the sales price, just a hair more than the 2.72% they were paying prior to the settlement.
Similarly, buy-side rates also are at their prior-year levels. Buyers paid an average of 2.55%, which is identical to the typical rate buyers paid at the same time a year earlier.
Here, a total of 224,176 sales were analyzed, a much larger sample, to be sure.
But a Redfin survey in the spring found that 43% of the agents polled have already seen their commissions decline, and 51% expect them to fall this year. Again, though, the sample size was small – just 500.
Now, a year out, a new survey from Clever Real Estate says the average total commission nationwide is 5.44%, up from 5.32% 12 months earlier. The current rate is divided almost evenly, 2.77% for the seller’s agent and 2.67% for the buyer’s guy – or gal.
For the median priced home of $367,700, the increase translates into total sales charges of more than $20,000, Clever reports.
But again, the samples size was just 806 agents.
So what to make of these studies? It’s hard to say what’s up – or down – with commissions.
While it seems obvious that agents are doing whatever it takes to hold onto their fees, consumers should understand that everything in real estate is negotiable, even what your agent wants to charge.
And with fewer and fewer sales to go around at the moment, bargaining should be easier than ever.
