| Linknet Real Estate News Digest - December | | | | be cooling, industry observers expect many |
| 22, 2005 - In spite of worrying signs that | | | | newbies to soon leave the business. |
| the real estate market is slowing down, a | | | | |
| survey of wealthy Americans indicates most | | | | As Susan Haskins, president of the Northern |
| remain confident property values will | | | | Virginia Real Estate Association said, "What |
| continue to appreciate. | | | | you're seeing now are a lot of people coming |
| | | | into the business thinking they can make a |
| In a survey conducted by The PNC Financial | | | | lot of money quickly and easily. But they |
| Services Group, Inc., 65% of those surveyed | | | | often have no idea of the hours that you have |
| said they expect to see double-digit | | | | to put in, or the commitment. And they will |
| increases in value over the next five years. | | | | not last very long." |
| Almost 1 in 3 (31%) think they will see an | | | | |
| increase of 20% or more. | | | | ==>Rookie Agents get the smallest commissions |
| | | | |
| According to Nicholas Buss, senior vice | | | | Traditionally, real estate agents across the |
| president of PNC, "as an investment, real | | | | U.S. have made between 6 and 7% of the sale |
| estate has been an increasingly dominant | | | | price of a home. This is usually split |
| asset class over the past five years... In | | | | between the buying and the listing agent. But |
| general, wealthy Americans have not been | | | | the hot market and the entry of many hungry |
| speculative buyers and they remain solidly | | | | new agents into the field has made things |
| confident in the long term..." | | | | more competitive. |
| | | | |
| The survey of almost 1,500 wealthy | | | | The overheated market has been giving sellers |
| individuals across the country showed | | | | the impression that houses almost sell |
| significant regional differences. New | | | | themselves, and this has led to cut rate |
| Englanders were most conservative in their | | | | listing. For instance, some internet-based |
| expectations; Californians were close to the | | | | discount services charge a flat fee or as |
| national average; Floridians were twice as | | | | little as 1.5% to get a listing the the local |
| bullish as the average, reflecting the | | | | MLS system. |
| soaring property values of the last few years | | | | |
| in their part of the country. | | | | And of course there are FSBO sites (For Sale |
| | | | By Owner) which circumvent real estate agent |
| ==>Agents Aplenty as Market Cools Down | | | | fees altogether. |
| | | | |
| In many regions of North America, the boom in | | | | The way real estate commissions are shared |
| real estate seduced many people to turn to | | | | between agents and brokers varies across the |
| real estate for a chance to cash in. For | | | | country and around the world. Agents usually |
| example, in Maryland, Virginia and the DC | | | | pay a portion of their commission to their |
| area, the number of licensed agents has | | | | broker to cover office and administrative |
| almost doubled in the last six years. The | | | | fees. But these arrangements vary from office |
| Northern Virginia real estate association has | | | | to office and even from agent to agent. New |
| been adding about 300 new agents every month. | | | | agents often have to pay their broker as much |
| And across the US there was a record high of | | | | as half their commission. More experienced |
| 2.5 million agents by the end of 2004. | | | | agents can sometimes set their terms. And the |
| | | | big producers may get to keep their entire |
| This has made the agent market much more | | | | commission. |
| competitive. And now that the market seems to | | | | |