The information gathered from the conversations with 200 listing agents supported earlier research that commission levels are highly uniform in most local markets, the CFA said, adding that 70% of all the rates quoted by these agents were for 6%. Nineteen of the remaining rates quoted were for 5%. In local markets, there was even greater rate uniformity. In five of the 20 areas, all agents quoted a 6% rate. In 10 other areas, seven to nine agents (out of 10) quoted the same rates.
The conversations with listing agents also revealed that only 27% said they would be willing to negotiate their rates. Those agents charging the highest rates in an area were most likely to be willing to negotiate. A typical response of the industry to inquiries about commission levels is that “they are negotiable,” the report said.
The report offered the following suggestions for increasing commission transparency:
• Home sellers should ask about commission levels and the willingness of agents to negotiate them down.
• Buyers should ask buyer agents about commission splits and whether they can be shown homes with relatively low splits.
• The U.S. Department of Justice should continue to investigate the lack of price competition related to commission splits and then require remedial action.
• MLSs should join the Pacific Northwest MLS in permitting brokers to make available to home buyers commission splits offered on individual properties.
The report was based on a study of 263 agent and broker websites in four cities, conversations with 200 agents in 20 cities and a national survey of over 2,000 representative Americans, the CFA said.