When home sales fall, real estate commissions rise - or at least that's the popular theory.But the conventional wisdom hasn't proven true during this downturn, according to little-noticed numbers released this month by Realogy Corp.
Realogy - the largest broker in Palm Beach County, in Florida and in the nation - said its average commission remained just under 5 percent in 2007, essentially unchanged from 2006.
Parsippany, N.J.-based Realogy owns Coldwell Banker Residential Real Estate and Corcoran Group, and it runs the Coldwell Banker, Century 21, ERA and Sotheby's International Realty franchise systems.
Realogy says the average "commission side" - that's half of the commission - was 2.49 percent for Realogy franchisees (up from last year's 2.47 percent) and 2.47 percent for Realogy's corporate-owned offices (down from last year's 2.48 percent). That's in spite of higher marketing costs for listing agents and the disappearance of some of the discount brokers who were applying pressure to commissions.
Realogy doesn't comment about commissions, and during a conference call last week, CEO Richard Smith mentioned the numbers but gave no details.
Realogy's report left Realtors scratching their heads. South Florida brokers insist that commissions have soared to 6 percent or more in the past two years. After all, they say, when sellers grow desperate for a deal, they're willing to pony up.