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Commissions Inching Downward? Splits Growing Less Favorable? You’re Not Alone

Here’s how Realogy is responding.

(Mountain Lakes, NJ, April 12, 2018) — Reflecting ongoing pressure on real estate fees, commissions continued to get squeezed in 2017.

For example, Realogy Corp., the nation’s largest broker, says the average commission rate at its company-owned operations fell to 2.44 percent per transaction side for the year. That’s below the record low of 2.46 percent that Realogy reported for 2015 and 2016.

The company-owned operations are mainly Coldwell Banker brokerages in large markets with comparatively high home prices — and the same markets being targeted by Redfin and other discounters.

Realogy also faces pressure on another front: It’s paying agents an increasing share of commissions.

While Realogy didn’t disclose its average split for 2017, it did say that the figure rose by more than 2 percentage points from the fourth quarter of 2016 to the fourth quarter of 2017.

Realogy Chief Executive Officer Ryan Schneider told analysts that the company is becoming less aggressive about recruiting agents with generous splits. Instead, he says, Realogy will try to use improved technology offerings to offset agents’ demands for a bigger share of the commission.

More on commission pressure, the potential gold mine of referrals, and sharpening your coaching game, appear in the April issue of Real Estate Broker’s Insider.

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