Real Estate Brokerage

The Relationship Between Home Prices and Real Estate Commission Rates

Implications for Consumers and Public Policy

CFA released a new report on residential real estate brokerage that found no consistent relationship between home prices and commission rates.  “The research provides additional evidence that the structure of agent compensation is both inequitable and inefficient,” said Stephen Brobeck, a CFA senior fellow and the report’s author.

The report was based on a comparison of housing prices and buyer broker commission rates in 17,805 recent sales in 35 cities.

  • In ten cities, the rates were so uniform that meaningful comparisons could not be made.
  • In five cities, rates were fairly similar for all housing price categories.
  • In eight cities, higher-priced homes tended to carry higher commission rates than did lower-priced homes.
  • In only eight cities did higher-priced homes tend to carry lower commission rates.