From November 2000 to March 2001, the Strategic Issues Subcommittee of the National Association of Realtors held structured discussions and focus group sessions with brokers from around the country on key trends in the industry. What the 20-member subcommittee found were dramatic indicators of changes on the real estate horizon. The new consumer is price-sensitive, but willing to pay premiums for services and items perceived to have high value. The widespread posting of listings, neighborhood, demographic and other information on the Internet has empowered and confused the consumers, says the report. Brokers are now in the position of having to broaden their services to help consumers interpret the information they get off the Web.
Some brokers feel that the abundance of information is one of the drivers pressuring commissions.
Brokers are finding that the transaction is becoming commoditized, with price as a determining factor for consumers who compare mortgages, title policies, homeowners insurance, and other services. To compete on price, brokers may need to add value to the transaction, such as offering extra services. Net national actual commissions percentages are about 4.2 percent, said one consultant. Top agents are taking higher commission splits, and competitors are leveraging Internet technologies to compete on price. Meanwhile, brokers must invest in expensive technologies.