Op-Ed: How The Change In Commission Structure Has Affected Realtors
By WENDY LEIBOWITZ
Realtors have long played a pivotal role in helping people buy and sell homes. However, the recent changes in commission structures have shaken things up in the real estate world.
If you’re in the business, you’ve probably felt the impact. But what exactly has changed, and how does this shift affect the day-to-day work of realtors? Let’s dive into it and see what the future holds for the upcoming spring season.
Understanding The Commission Shift
For as long as most of us can remember, realtors have typically earned a commission based on a percentage of the home’s sale price. This percentage was shared between the buyer’s agent and the seller’s agent. In most cases, the seller paid the commission out of the proceeds from the sale.
But times are changing.
Many markets across the country are starting to see alternative commission structures pop up. Some sellers are negotiating lower commission rates, and others are offering flat-fee services instead. For some realtors, this change has led to a dip in income. Others are adapting by offering more services to justify their traditional commission rates. It’s a balancing act that’s creating a lot of buzz in the industry.
A friend of mine, Sarah, who’s been in the real estate game for over a decade, shared her experience: “I used to close deals without much pushback on commissions. Now, buyers and sellers are much more conscious of what they’re paying and why.”
The pressure to prove the value of a realtor’s work has never been higher.
The Rise Of Flat-Fee Real Estate Services
One significant trend that’s making waves is the rise of flat-fee services. In this model, realtors charge a set fee for their services, regardless of the home’s price. This can be attractive to sellers who want to save money, but it’s a bit more complicated for realtors.
Here’s why: Flat-fee services can sometimes mean that realtors end up doing more work for less money. Imagine spending the same amount of time and effort selling a home worth $300,000 as one priced at $700,000, but getting paid the same amount for both.
It’s a tough pill to swallow, and some agents are choosing to avoid flat-fee deals altogether. But for others, offering flat-fee services can be a way to stay competitive in a changing market.
The Importance Of Building Relationships
With these shifts in commission structures, it’s more important than ever for realtors to focus on building strong relationships with their clients. At the end of the day, buying and selling homes is an emotional process. People want to work with someone they trust, especially when they’re making such a significant financial decision.
Take Mark, for example, another seasoned realtor I know. He told me about a time when he helped a family find their dream home after months of searching.
“It wasn’t the easiest deal,” he said. “But at the end of it, they referred me to three other families. That’s the kind of trust and connection that pays off in the long run.”
In a world where clients are more price-conscious, realtors who focus on relationships often have the edge.
Next Spring: What To Expect
As we look toward next year’s spring season, many in the real estate business are cautiously optimistic. The spring season traditionally brings a surge of activity, as more homes hit the market and buyers are eager to move before summer. But with the commission structure changes still settling in, what can realtors expect?
First, adaptability will be key. Realtors who can offer flexible services, whether it’s through flat fees, tiered service packages, or traditional commissions, will likely fare better.
Second, local expertise is going to be more valuable than ever. As buyers and sellers try to navigate these changes, they’ll be looking for realtors who understand the nuances of their local market. Knowing what’s happening on the ground — like which neighborhoods are hot, how long homes are staying on the market, and what’s influencing prices — will be critical.
Lastly, technology will continue to play a larger role in how realtors operate. Virtual tours, digital signing platforms, and even AI tools to streamline the transaction process are becoming standard in the industry. Realtors who embrace these tools will be better equipped to handle the fast pace of the spring market.
Preparing For The Future
If there’s one takeaway for realtors right now, it’s this: You need to be ready for anything. The real estate industry is always evolving, but the commission structure changes we’re seeing now are unprecedented.
Here’s a quick checklist for realtors looking to stay ahead of the curve as we head into next year:
- Review your commission strategy. Are you offering value that justifies your rates? Or is there room to adjust and be more competitive?
- Build your online presence. In today’s market, potential clients will look you up online before they even think about picking up the phone.
- Emphasize your local knowledge. In a competitive market, knowing the ins and outs of your area can set you apart from other realtors.
- Stay updated on industry changes. Commission structures aren’t the only thing shifting. Stay in the know about real estate regulations, market trends, and new tools that can make your job easier.
Real Life Stories: How Realtors Are Adapting
I remember talking to Jake, a realtor from Arizona, about how he’s adapting to the new commission landscape. He’s started offering virtual consultation packages for buyers and sellers who don’t need full representation.
“Some people just need a little guidance,” he told me. “So, I offer them a lower-cost option that helps them get started without breaking the bank.”
Another realtor I spoke with, Lisa, has doubled down on marketing her high-end services.
“I’m all about offering top-tier service,” she said. “So, I’ve invested in professional staging, photography, and even drone footage to show clients that I’m worth every penny.”
These stories highlight a critical point: Realtors who are willing to adjust and offer creative solutions are thriving, even in this changing environment.
Final Thoughts
The changes in commission structures may feel daunting at first, but they also present a massive opportunity for realtors who are ready to evolve. As we head into the next spring season, it’s clear that flexibility, relationship-building, and local expertise will be more important than ever.
Realtors who embrace these principles will not only survive but thrive in the new real estate landscape. Keep an open mind, be willing to adjust, and remember that at the heart of every transaction is a client who wants to feel confident in their decision.
Are you ready to take on the challenge? The future is bright for those who are willing to adapt.
Wendy Leibowitz is a licensed Real Estate Broker working in California. She began her career with Sun Realty in Manhattan Beach. Wendy made a name for herself specializing in single-family residences, duplexes, and two to four-unit income properties.