Broker Commission Rates

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Posted by Nicolai Kolding

I’m an insomniac.  That hardly makes me unique around here - it’s a bit of a running joke in our halls as we see each other in the morning:  “So, how many times did you wake up last night?!”  On many nights there are just too many ideas spinning around in our heads to allow for a peaceful sleep so we’re up like a flash at 3 a.m., reaching for pen and paper to write them down before trying to doze off again.

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Dear brokerage owners and managers:

I know times are awfully tough right now and, believe me, I’m not trying to kick you while you’re down. But I have a nagging question I need to ask: have you considered the possibility that you may never make more money than you are today? I’m not even thinking about what you made, say, in 2004 or 2005. I’m talking about never earning more than you are right at this very moment. Think about that possibility for a minute. What if this is as good as it gets?

No, I don’t think the housing market is doomed. Quite the opposite; I’m bullish long-term. Home values and transaction sides will increase again. In some places, this is already underway. In many others, the turnaround appears near, even if the pace could be only moderate. Despite this, I still believe few brokers will see any real gains because too many are betting the ranch, so to speak, that these two drivers alone will whisk them back to profitability. Too few are thinking realistically about that most critical of revenue drivers: their percentage take per transaction (also known as broker commission rate or BCR).

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