Real Estate Commissions Rise

From CNN Money:

“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.”

From the San Francisco Chronicle:

“With home sales less than half of what they were during the 2005 peak, you would think commissions would shrink. Underemployed agents are chasing a dwindling number of sales.
But just because you can bargain hard on commissions doesn't mean you always should. Think of it this way: A commission is prize money. All things being equal, a buyer's agent will show a home paying a 6.5 percent commission to one paying 4 percent.”

From Realty Times:

“The AEI-Brookings Joint Center For Regulatory Studies has just issued a "critique" on the traditional real estate commission structure called, ‘A Critical Assessment of the Standard, Traditional, Residential Real Estate Broker Commission Rate Structure.’

Among the points made in the critique, ‘commissions are strangely unrelated to either the quantity or quality of the service rendered ...’ and that the ‘fee-for-service approach -- combining flat fees, hourly fees, and bonuses, including percentages of extra value created ... .’”