Real Estate Comission Rates Up

I read an article in the Sunday, June 10, 2007 Chicago Tribune real estate section that today's tough selling climate is having a surprising side effect - the average commission rate on closed sales rose slightly nationwide for the first time in years.

According to industry publication "Real Trends", the average commission rose by nearly one-fifth of a percentage point to just under 5.2 percent. This is despite the growth of "for sale by owner" and limited-service real estate brokers.

Commission rates are negotiable, but agents are free to reject the request and turn down the listing.

In the 80's and early 90's, 7% was considered standard in large metropolitan areas. During the late 90's and boom years, the average commissions dropped and stabilized around 5%.

This was because houses were practically selling themselves.

Now, that the market has slowed down, and selling is harder, more agents are refusing to list houses for less than 6%, and some "star" agents are charging 6.5 - 7%, and doing well.