Almost exactly a year ago, real estate faced a “judgment day.” August 17 was supposed to be when everything collapsed for agents, as commissions imploded and consumers refused to sign now-mandatory agreements.
Looking back now, those fears seem almost comically unfounded. Most brokers and real estate business leaders described the transition as a bumpy patch of road rather than a headlong dive off a cliff. Early data and anecdotal reports show that real estate is still practiced similarly to the last few years, with consumers relying on agents and commissions calculated and paid as they always have been.
But while all of this is encouraging, not every issue has been resolved, with plenty of questions unanswered. An academic paper cited by the Federal Reserve claims that commissions should eventually fall by 50% based on a full “decoupling” of real estate compensation (something that was not accomplished in the new rules, but was the explicit goal of the Department of Justice last year). States have also shown they are willing to defy certain policies, and others have proposed tweaks or modifications, while brokerages rapidly adapt their trainings to the new policies.
All of this affects commissions in real time. After RISMedia and other outlets reported a dip in commissions, disparate data appears to show compensation is stabilizing. Most of these sources rely on limited samples of agents, or secondary data sources, or are conducted by discount brokerages with their own agenda.
RISMedia is currently wrapping up its fourth annual survey of real estate compensation. In the wake of all the changes, our latest edition will delve into how commissions are negotiated, how agents are using buyer agreements and where rates ended up on both the buy side and sell side. For those who are seeking to build their business in the long run, parsing through this information should not just be for when things get messy. The long-run path of the industry remains cloudy, and determining which strategies—and agents—are succeeding is necessary in order to chart a course to sustainable business.
As an RISMedia reader, you can help us provide this independent and balanced perspective on the most important issues facing the industry, by dedicating 10 minutes of your time to a fully anonymous survey (which closes August 24). You will also be entered to win a $50 Amazon gift card.
The results of RISMedia’s fourth annual Contract & Commission study will be available to Premier members this September.
