Are you prepared for the change?

Tony Ketterling • April 12, 2024

Are you prepared for the change?

The real estate commission landscape is evolving, reflecting technological changes, consumer behavior, and agent expectations.

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The real estate commission landscape is evolving, reflecting technological changes, consumer behavior, and agent expectations. These shifts offer both challenges and opportunities for agents and brokerages alike. Understanding these trends can help navigate the changing terrain effectively.

Technology's Role

Technology has dramatically transformed how real estate transactions are conducted, impacting commission structures. Online platforms and real estate apps allow for more direct connections between buyers and sellers, sometimes bypassing traditional agent roles. This has led to:

  • Flat-Fee and Reduced Commission Services: Some platforms offer lower commissions or flat-fee services with automation and streamlined processes, appealing to cost-conscious sellers.
  • Increased Transparency: Buyers and sellers have more information, making some question the traditional commission percentages. Agents are now often expected to justify their commissions with superior service and expertise.

Agent Empowerment

Agents are seeking more control over their careers and earnings, leading to:

  • 100% Commission Models: Brokerages like Equity Real Estate offer models where agents keep their entire commission, paying only a flat fee per transaction. This approach attracts independent, motivated agents who value autonomy and financial efficiency.
  • Team Structures: Some agents form teams within brokerages to pool resources, share commissions, and leverage diverse skills. They offer comprehensive services to clients and often negotiate different commission splits.

Consumer Expectations

Today’s consumers demand more value and personalized service, impacting commission discussions.

  • Service-Based Commission Structures: Some agents are moving towards tiered services, allowing clients to choose the level of service they want, tied to different commission rates. This can range from basic listing services to full-service packages with staging, professional photography, and marketing.
  • Negotiability: With increased competition and information availability, commissions are becoming more negotiable. Agents need to be more flexible and articulate the value they bring to the table.

Looking Ahead

  • Regulatory Changes: Legal and regulatory environments are also shifting, with some jurisdictions looking into commission structures, transparency, and competition. Agents and brokers must stay informed and adaptable to comply with new standards.
  • Innovation in Services: To justify commissions, agents expand their services, incorporating the latest tech tools for market analysis, virtual showings, and digital marketing strategies to enhance their offerings and stand out.

For agents and brokerages, the key to thriving in this changing landscape is to focus on delivering exceptional value, leveraging technology to enhance efficiency and service, and adapting to their clients' evolving needs and expectations. Equity Real Estate, emphasizing support, technology, and agent empowerment, is well-positioned to navigate these changes, offering a compelling proposition for current and prospective agents.

Tony Ketterling

CEO of Equity Real Estate

As the CEO of Equity Real Estate, I bring over four decades of management and leadership experience to the real estate market, where I have been actively involved since 2000. Equity, the #15 independent real estate company in the nation, boasts a constantly growing network of over 3,500 agents. My passion for the industry drives me to support and guide my team in delivering exceptional client service.

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