Brooklyn Consumer Federation
Too Many Real Estate Agents For Too Few Home Sales: New CFA Report Documents the Costs to Industry and to ConsumersJuly 10, 2023 | Press ReleaseWashington, D.C. – Today
Washington, D.C. – Today the Consumer Federation of America (CFA) is releasing a new report – “A Surfeit of Real Estate Agents: Industry and Consumer Impacts” – that uses industry sources to document the costs to industry and to consumers of too many residential real estate agents. More than 1.5 million residential agents (including brokers) compete for home sales usually totaling 5 to 6 million annually.
Those costs include:
In examining home sales in three cities– Jacksonville (FL), Minneapolis (MN), and Albuquerque (NM) — the study found that marginal agents (with five or fewer sales a year) received an estimated 25-30 percent of commission income. According to data collected by the industry from Realtors in 2021:
“Without 5-6 percent rates, even fewer agents would survive financially in today’s marketplace,” said Brobeck. “Ironically, relatively high rates attract new entrants into the industry, increasing competition for clients and reducing individual income for all.”
The report raises the question of whether the industry should make greater efforts to ensure the competence and commitment of new agents. Such efforts could include more stringent entry requirements and required mentoring of new agents. A future CFA report will address in depth these two issues.
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