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Wealthy Americans Confident Real Estate Boom Will Last

Linknet Real Estate News Digest - Decemberbe cooling, industry observers expect many
22, 2005 - In spite of worrying signs thatnewbies  to  soon  leave  the  business.
the real estate market is slowing down, a
survey of wealthy Americans indicates mostAs Susan Haskins, president of the Northern
remain confident property values willVirginia 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 Financiallot of money quickly and easily. But they
Services Group, Inc., 65% of those surveyedoften have no idea of the hours that you have
said they expect to see double-digitto 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 viceTraditionally, real estate agents across the
president of PNC, "as an investment, realU.S. have made between 6 and 7% of the sale
estate has been an increasingly dominantprice of a home. This is usually split
asset class over the past five years... Inbetween the buying and the listing agent. But
general, wealthy Americans have not beenthe hot market and the entry of many hungry
speculative buyers and they remain solidlynew agents into the field has made things
confident  in  the  long  term..."more  competitive.
The survey of almost 1,500 wealthyThe overheated market has been giving sellers
individuals across the country showedthe impression that houses almost sell
significant regional differences. Newthemselves, and this has led to cut rate
Englanders were most conservative in theirlisting. For instance, some internet-based
expectations; Californians were close to thediscount services charge a flat fee or as
national average; Floridians were twice aslittle as 1.5% to get a listing the the local
bullish as the average, reflecting theMLS  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  Downfees  altogether.
In many regions of North America, the boom inThe way real estate commissions are shared
real estate seduced many people to turn tobetween agents and brokers varies across the
real estate for a chance to cash in. Forcountry and around the world. Agents usually
example, in Maryland, Virginia and the DCpay a portion of their commission to their
area, the number of licensed agents hasbroker to cover office and administrative
almost doubled in the last six years. Thefees. But these arrangements vary from office
Northern Virginia real estate association hasto 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 ofas 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 morecommission.
competitive. And now that the market seems to



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