The Future of Real Estate Agent Compensation
If there’s any consolation prize for CRE’s tech laggard status, it’s that they don’t have to deal with commission wars like the residential sector does. Data standards, mature online portals, electronic transaction management have dramatically reduced the cost of residential transactions. So it’s natural for consumers to think that greater efficiency should translate to lower costs.
But commissions seem stubbornly stable in most markets. And the complaints directed at residential agents are getting louder.
Since many residential trends seem to end up being adopted on the commercial side, here’s a peek into the future of real estate commissions.
Flat Rate Commissions
Brokerages offering real estate services at flat rates have been around for decades. And none of them seem to have gained any traction. But companies like Redefy think now might be their time.
Redefy believes that consumers should get a break on the listing side – the side that technology has made cheaper to execute but which still commands full sized commissions. So owners play a flat fee of about $2,500 depending on the market and cost of the home for submitting their listing.
Agents get in on the flat rate, too, each receiving a standard fee for bringing in a listing. Salaried “inside agents” take care of the paperwork. And all agents are subject to quotas implying volume is part of the company’s profit equation.
Owners still pay commissions to the buyer’s agents– including Redefy agents – which is, apparently, a task perceived to have more value.
SOURCE: CRE Outsider
By Chris Clark