From the Baylor Lariat (?):
America has too many real estate agents
Real estate agents do add value by connecting buyers and sellers more meaningfully than a quick online search, and by taking the lead on contracts and negotiations, which can get complicated. But do these services truly warrant a $60,000 bill for the sale of a million-dollar home (which is frighteningly no longer a jarring number)?
Proponents of the NAR lawsuit, myself included, would say no. And saying that doesn’t mean I want real estate agents to take a pay cut, since their salaries are reasonable. What it does mean, however, is that the total revenue of the real estate industry will shrink, and there must be accordingly fewer agents to share that revenue.
When you realize there are 1.5 million NAR members and possibly up to 3 million licensed real estate agents in the United States, you see part of the reason commissions have stayed so high. That many agents for just over 4 million home sales in 2023 means most agents wouldn’t close enough deals to keep the lights on.
While it’s far from the only factor keeping rates high, the most reasonable answer to this commission problem could be to reduce the number of agents in the market, allowing brokers to make fair compensation while customers aren’t victims of inflated commission rates.
