Lisa Simpson
Jan 3,2010
In: Real Estate

Recovery in housing has not been of much help the agents and brokers

There has been a sharp increase in purchases made by first time nest builders. But this surge has not helped the agents and brokers who link the deals. In 2009 the commissions dropped to record levels – the lowest since the last seven years. This has been because of the drop in house prices. The increase in sales has been due to the tax credit offered by the federal government. The commissions in last November fell by 6.2% to $40.6 billion, from one year previously as per the calculations of Bloomberg.
The tax credit helped the sale of those houses that were on the lower end and this brought down the commissions of the agents said Steve Murray of Real Trends. The benefit from tax credit and increase in sale of foreclosed houses lowered nationally the nationally median price of residential units by a staggering 13% in 2009. It fell to $172,700. The median sale price is calculated to be the point at which half the houses are sold for more and half the houses sold for less. In last November nearly 75% of the houses sold were priced at $250,000 and below.

Speaking at an interview Murray said, “The impact of the tax credit has been huge. The average commission rate inched up this year and the number of real estate sales have gone up too, but the average price has dropped significantly because of the bulge of first-time buyers.”

Since 2002 the dollar value of commissions had never fallen so low albeit the average rate for each deal in the country increased to nearly 5.29% in 2009 – it being the 4th running annual increase. In 2008 the average rate for commission was 5.26%.

The commissions pocketed by the realtors are calculated in proportion to the sale value. The agents talk it out with the sellers to fix the rate and the latter are expected to pay the brokers for whom they work.

The price of homes as gauged by S&P/Case-Shiller index went down by 7.3% last October from what it was one year previously. The prediction had been that the drop would be by 7.2%.

Realogy Corp is the biggest brokerage and franchiser in residential houses. Its income fell from $2.8 billion in 2008 to $2.1 billion during the first three quarters of 2009. The firm is based in Parsippany, New Jersey.

Via

Search Images:

Share and Enjoy: