Commissions Reach Nine-Year Peak

Written by: Steve Cook   Sun, January 10, 2010 Beyond Today’s News, Market Activity

Home sellers getting ready to put their homes in a spring market stimulated by tax credits and lower interest rates should budget for some bad news when it comes to paying their real estate agency.

Real estate commissions have risen for four straight years and they are higher today than they have been since 2001.   The average commission in 2009 was 5.29 percent, up over six percent than last year but still below the mythical six percent customary in many markets.

Commissions fell with the onset of the housing boom at the turn of the decade as brokers made concessions to get listing and discount brokerages flourished to take advantage of the sellers’ marker.  With the collapse of housing markets in 2006, commissions began to rise again as it became more difficult for sellers to market their properties. 

Higher commissions do not necessarily mean more money for brokerages, however. Price declines and greater activity at the lower end of the housing market as a result of the success of the first-time buyer credit last year combined to reduce income to brokerages despite a, increase it the  commission rate and increased sales volume.

Total commissions through November were $40.6 billion, according to calculations by Bloomberg News Service based on the average commission rates from Real Trends Inc. and on home price and sales data from the National Association of Realtors.

 The average national commission rate hasn’t seen six percent since 1992, when Real Trends pegged the average rate at 6.02 percent.  By 2005, the rate had fallen to 5.02 during the peak of the housing boom.

2 Comments For This Post

  1. Mike Goldman Says:

    What is does a avg., Real Estae Agent make vs a USA FEDERAL GOV’t Employee

    and vs a California Public Employee and vs a California Fireman vs a

    California policeperson vs a USA Sentaor vs a USA Congressperson vs .,

    vs a USA Justice dept employee vs a Goldman Saches employee ?

    Thanks , Mike (***Can You do a Spreadsheet on these and put who has Health and Medical and all the “PERKS -????

  2. Steve Cook Says:


    Here’s a few of the numbers you requested. I’ll try to get the rest later today.

    Average agent’s income-$54,410
    Average broker’s income-$77,240
    Average Federal employee’s salary-$63,431
    Congressman/Senator’s salary- $174,000

    Thanks for your question.

    Steve Cook

Leave a Reply