Real Estate Commissions To Hit $55 Billion By Year's End -

Real Estate Commissions To Hit $55 Billion By Year’s End

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NEW YORK, Dec. 10, 2007 – Real estate agents and brokers will collect $55 billion in commissions during 2007, a $19 billion increase from 2000 figures, according to industry data collected by With an average commission in 2007 of $13,900 and cost-consciousness a rising concern among home sellers across the country, predicts that in 2008 more consumers will choose non-traditional methods to sell their homes in order to save money on commissions.”

“Our analysis shows that agents and brokers charge substantially more than they did just several years ago,” said Greg Healy, VP of Operations for “We believe that in 2008 an increasing number of consumers will utilize the resources and marketing power of the Internet to sell their home themselves.”

According to proprietary data gathered by the company, the average home sale price has increased nearly 50 percent since 2000 while the average commission rate for a traditional broker has stayed well above 5 percent. As a result, the commission on a typical home sale has increased to $13,900 from $9,700 – a 43 percent increase.

Healy commented, “We estimate that in 2007, ‘for sale by owner’ sellers will save almost $9 billion in home value that they otherwise would have paid to real estate agents. As home owners cope with a tough market in 2008, we expect the cost-saving trend to continue, as the ‘for sale by owner’ segment gains market share.”

“Online real estate resources empower consumers to control the process themselves and remove the vale of secrecy that surrounds the home selling process. Trends in rent-to-own and other areas will continue to emerge as people look at non-traditional ways to preserve the equity in their homes,” said Healy.

Top Five Trends Identified by Include:

1. Continued Challenges in the Housing Market: During 2008, existing home sales and pricing will continue to decline due to tight lending standards, record high inventory levels and increased foreclosures. Home sellers, faced with this challenging marketplace, will more aggressively seek affordable alternatives to commissioned-based real estate agents.

2. Increased role of the Internet: According to industry data, 84% of homebuyers used the Internet to search for a home in 2007, up from 80% in 2006, from 77% in 2005 and from just 2% in 1997. The Internet will have an even more significant role in the real estate process for consumers due to the proliferation of new online real estate tools and resources, such home pricing reports, market information and blogs.

3. Increased Consumer Confidence in Alternative Selling Methods: According to the National Association of Realtors, 2007 will close with a total of nearly 700,000 successful “for sale by owner” transactions in markets across the country, resulting in the savings of nearly $9 billion estimated by These successful consumers will serve as advocates for the benefits of the “by owner” method and its ensuing substantial savings. The impact of this word of mouth effect, combined with the increased resources available on the Internet, will result in more consumers having confidence in their ability to successfully sell or buy a home without a real estate agent. This confidence is well founded, as evidenced by recent research by Northwestern University professors concluding that “for sale by owner” home sellers achieved the same sales price as sellers represented by an agent.

4. Resistance to Commission Increases: Consumers, becoming more educated about the real estate process and the availability of cost-effective online alternatives, are likely to resist paying high commission rates in favor of alternative real estate transactions.

5. Increases in Rent-to-Own and Buy-Side Assistance: In an effort to reach a wider audience of buyers, more sellers will market their homes as rent-to-own, to attract prospective buyers who may not have immediate financing. Meanwhile, with more people using the Internet to find their next home, the role of a buyer’s agent has diminished. Buy-side real estate companies, which represent buyers and refund them a large portion of real estate commissions, will become more popular in 2008.

About is the nation’s leading for sale by owner website. Since 1999, has saved home sellers more than one billion dollars by providing premium Internet marketing services, real estate guidance and information, as well as live customer support, to help customers successfully sell their own homes. The company offers a wide range of listing packages at varying prices that provide advertising, information, tools and resources to empower people to sell their homes themselves. In contrast, a person selling a $300,000 home through a real estate agent would be charged a 6% commission fee and pay approximately $18,000. Prospective homebuyers can browse the database of properties at no charge.

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