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