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Many residential brokers are finding it difficult to land full asking price commissions with US homeowners looking to sell.

A survey from Redfin, an online real estate brokerage, indicates that more than half of US homeowners in 2015 got discounts on their broker fees. The theories surrounding such a large drop include; increased competition amongst brokers, higher sales prices, and leverage from brokers due to pricey exclusive listings.

But more interesting is the theory that Redfin is leveraging its technology to shred the broker industry. Redfin charges users 1.5% to list their homes. Redfin provides the buyers-market with the listing opposed to the broker going out and finding the buyer individually. It's arguably more efficient and effective. Oh, and it's cheaper as well.

If this theory is true it makes sense why brokers are negotiating at lower prices. It's either take less money, or none at all.

Which theory or factors do you agree with most? Why are brokers settling?


Cerco Funding LLC is a New York-based real estate private equity firm. Cerco acts as a direct portfolio lender originating commercial bridge loans nationwide. Cerco has extended capital for acquisitions, refinancings, repositionings, and a host of special situations.

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