While reading through this month's Broker Agent News, I came across this statement, in an article by Carla Cross. "Are you aware commissions are shrinking? A Real Trends' study pointed out that commissions have gone from an average of 6.1% in 1991 t0 5.1% in 2004. That's a 16 percent price cut! Another study showed shrinking commissions was the largest problem perceived by top producers."
By the way, Carla Cross is the president of Carla Cross Seminars, Inc. and Carla Cross Coaching. Anyway I don't know Carla Cross and this post is not about her but just wanted to make sure I mentioned my source of information. This post is about her statement that commissions are shrinking.
I don't agree with that statement at all. In my market, Poinciana, Fl., commissions are on an upswing. Sellers have realized that the "discounters" are not getting homes sold and the Sellers I have met with, have no problem at all, paying a higher commission to get the job done. In fact, during my listing presentations, commission negotiations rarely come up any more. They just want to sell their house. I list a lot of expired listings and believe me when I say these Sellers are more than ready to move up to a qualified, experienced, full time and full service Realtor. They've been the discount route and it did not work. They want service. They want to hear from their Realtor. And most importantly they want to get their home sold, the sooner the better.
So, from my perspective, Carla Cross's statement, "Are you aware commissions are shrinking?" is incorrect. I think the problem is, the study from Real Trends, that she mentioned, is comparing 1991 commissions with 2004 commissions. Now folks, I may not be the brightest star in the sky, but what the heck does 2004 commissions have to do with 2006. In 2004 we were in a serious Seller's market, in most parts of the country. I even reduced commissions. Why not? I could sell a house in less than a week and have multiple offers for my Sellers to choose from. I was taking 14 day listings. My pitch was simple, "list with me today and I will have your house under contract before the end of the week." My average inventory was 1-3 listings. It was awesome! And then came 2005 and is was even better.
But this is not 2004. It is 2006 and commissions are on an upswing. It is a Buyer's market in most areas of the country. Sellers must be able to compete. And, to do this, they must hire an experienced Realtor that can get the job done. And for this they will have to pay. 2006 has been another banner year for me. Folks are calling me daily to list their homes. I have about 10-20 expired listings to solicit every day. I'm carrying between 20-25 listings and still closing 2-4 deals a month. And my commission has been adjusted upward and may get adjusted again in the near future. Why? Because it takes me longer to get a house sold and because my services are valuable and the Sellers know it. I get results.
Sellers have had some real strong appreciation over the last couple of years so even though values are coming down, most Sellers are still in a very good equity position. The key, in this market, it to get Sellers to look at the real picture, so you can get their home priced right and sold. If you can achieve this, you will not only survive but you will thrive in this market. And Sellers will search you out to do business with you. So, it may not be 2004 and 2005 but 2006 sure looks good from my perspective. 
Broker Bryant says, "Are you aware commissions are on an upswing?" What say you?
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