Evolution of Seller Commissions: Past, Present, and Future
-This is a transcript from Go Gaddis Radio to listen to the episode click here-> https://on.soundcloud.com/Zn19V
Welcome back to Go Gaddis Real Estate Radio right here on AM nine 20. The answer in this segment in our neighborhood spotlight, we're featuring the Hattaway in Lawrenceville. And then why do sellers typically pay the listing agent and the Buyer's Agent's commission? Have there been any changes over the years to this?
And what might the future look like for real estate commissions? Don't forget, we want to connect with you. We really, really do. And it's easy. Go to go gattis radio.com, G O G A D D I S radio.com. You can ask questions, you can make comments, you can push back, you can share your ideas with us. You can request your neighborhood be featured in our neighborhood spotlight just like the hadaway in Lawrenceville being featured today.
And you can subscribe to our podcast. We are available on every major podcasting platform, and we would love for you to be a subscriber to the podcast. Each week we pick one specific Metro Atlanta neighborhood to call out critical changes over the last few years to help you understand as a homeowner in the neighborhood, whether or not you have a particular advantage when it comes to selling your home.
To get to the Hadaway, you take I 85 North Exit 1 0 6, which is Highway three 16. You turn right onto Georgia, 1 24 Brazelton Highway, right onto Old Fountain Road, and the neighborhood is on the right. The Hadaway in Lawrenceville is a swim tennis community with a clubhouse and a playground. It's a beautiful neighborhood.
Easy access to three 16 and I 85. Only 15 minutes. From Mall of Georgia, 10 minutes from the Lawrenceville Lawn, which has, you know, the amphitheater that holds festivals and concerts and movie nights. It's close to Bridges Art Center, which is a pottery and ceramics workshop. Uh, the Bridges Foundation offers no cost, senior classes and scholarships to young adults who would otherwise not have access to materials or equipment.
The Aurora Theater, which I haven't been to in years, but I used to love that, and downtown Lawrenceville offers camps and classes and workshops. Along with several productions throughout the year, Gwinnett County Bicentennial Plaza Exhibits take visitors on a walking tour of Gwinnett County. History is located nearby and Roads Jordan Park, an aquatic center, which is 162 acres, is nearby.
If we take a look at what happened in the Hadaway over the last three years, in 2020, excuse me, 2021, there were a total of 14 homes sold. Those homes took an average of 12 days from listing the contract. The average sales price $378,000 ranged from a low of 312,000 up to a high of 455,000 in 2022. One more home sold.
For the year, 214 homes, plus or minus in the neighborhood. So 15 to 18 homes would be about the normal amount of homes to sell in the neighborhood. Each year, those homes took an average of 18 days from listing to contract Sales prices went up almost $50,000 in one year to 427,860. They range from a low of 365,000 up to a high of 485,000.
Year to date, this year, seven homes have sold, which means it looks like we're gonna be a little less than 2021 and 2022. Average sales price, again, has increased to the tune of 17, maybe $18,000. 2023 over 2022 to four hundred and forty four, two hundred eighty six, so 378,000 to 427,021 to 22. Then 22 to 23, 4 27, 860, up to 444,000.
Currently there are four homes available for sale in the neighborhood. In the last 365 days, there have been 16 closings, which means there's three months worth of inventory, which means it is still a seller's market in Hadaway, in Lawrenceville. If you have less than four months worth of inventory, seller's market four in five months worth of inventory.
Balance market more than five months worth of inventory. Buyer's market, say there's 214, 15, 220 homes in the neighborhood, plus or minus those homes in 2011, as we were coming out of the Great Recession, sold for an average of $149,000 each. If you look at the value today, 444,000 means the average value of a home in that neighborhood has.
Gone up by 300,000. The average home in that neighborhood has gone from 150,000 in value in 2011 to 444,000 in value in 2023, which means homeowner equity has increased in that neighborhood. $63 million. It has increased $63 million. Elementary school that serves the neighborhood is dire. The middle school is Twin Rivers.
The high school is mountain. View High School, mountain View High School gets a School CHIMP score of 84. If you are the type of parent that doesn't want a monkey around with your kid's education or the school's effect on home values, you need to get a School Chimp report. Go to Go gaddis radio.com, click on School Chimp.
Put in the name of the school you're looking for. Tell the system. If you want to compare it to one school or the average of all schools in metro Atlanta, either one's fine. It'll give you demographic information that you're looking for. Average age of a home, percentage of homes. Occupied by homeowners versus renters.
Average educational attainment in the area, household income in the area. A lot of things that if you're going to move into a area, you probably should know. It'll also give you all of the real estate information. It'll give you a proprietary school score or a ranking. Then all the real estate data you're looking for, sales prices over the last five to seven years.
Now total market, average days on market, all the stuff you'd be looking for for that particular area, it'll all be there and available for you. All you gotta do is go to go gattis radio.com. If you are looking for a home and every time you find something on the listing site you're using, it's either already gone or maybe you're not even finding what you're looking for at all.
It could be that you're searching on the wrong website. And it could be, you need to switch over and search. Sure. mls.com. S U R E M L s.com. Let me tell you that one more time. SS U R E M L s.com. You're probably thinking, why in the world do I need to switch to Sure. mls.com. Well, it's because that site, which is my site, our site pulls listings from both listing services.
Which means you are increasing your chances of finding something that you want on that particular website. If you're looking to sell your home anytime in the next six months, we believe we can sell it for $28,000 more than your neighbor sold his or her home for. You heard it right? I said $28,000 more.
If you don't believe me, I say try me. Go to go gattis radio.com. Click on $28,000 more. Put in a little information. I'll reach out to you myself and discuss your situation. I'll prepare a customized maximum value plan for you, which is like an appraisal on steroids, and tell you all about our r and r program, our rehab and refresh program.
While you rest and relax, we get your home in tiptop showing shape so that you can maximize your sales price. I'm not telling you that everybody needs to maximize their sales price, but if you. Wanna sell your home for as much as you possibly can. Go to go gaddis radio.com, click on sell for $28,000 more.
Put in some information. You'll be on and off the site in 30 seconds, and I'll reach out to you for sure a week from today. We've got our free investing webinar, the Six Keys to Success and Real Estate Investing. Saturday, August the 26th. It'll start at 10 o'clock and run until 11 Wednesday, August the 30th.
It'll start at 7:00 PM and run to eight if you wanna register. It is really simple. Go to go gettis radio.com. In the upper right hand corner, you'll say you'll see in, uh, free investing webinar. Click on that sign up for the webinar. You can come to. One, you can come to both. You can come to either or, you can do it however you want to.
The content's gonna be the same. The uh, guests will be different, which means the questions will be different. So you might learn different things on each one of those. The system of sellers paying the commissions for the listing broker and the buyers. Agent, you know, goes back more than a hundred years.
Is it time for that to change? We received a listener question from Mario and Carla in Peachtree Corners. As a soon to be seller, we are curious what current commission rates are and why do we as a seller need to pay both sides. And the truth is, Mario and Carla, you don't have to pay both sides. The the tradition of.
Sellers paying all the real estate commission goes back like forever. Uh, the current system has a long history in the United States. It's traced. The practice is traced all the way back to the original code of ethics in 1913 by the National Association of Realtors, which said an agent should exact a regular real estate commission prescribed by the board or exchange of which he's a member, which you cannot do anymore.
That's price fixing and should always be ready and willing to divide regular commission equally with a member of the association who can produce a buyer for any client. Selling a home, they say back in 1913 required a lot more work than today. The average sales price of a home throughout the twenties was $6,000, which means the average buyer's agent made 75.
Dollars in commission. Commission rates rose to around 5% in the 1940s and hovered between five and 6%. In metro Atlanta, they're probably a little closer to 6%. Again, there's no price fixing everybody. Every company is free to negotiate. Um, the reality is there's a couple of really large class action lawsuits that are saying that having the seller pay the Buyer's Real Estate Commission, the Buyer'ss Commission inflates the cost of.
Real estate, so they're saying that because the seller has to pay the buyer's agent. That increases the cost. So there is lots of discussion around separating the commission. So the seller would pay the commission if their agent, the buyer, would pay a commission to their agent as well. My guess is because many buyers don't have enough excess cash, To pay a lot of expenses over and above the down payment and the cost required to get in a home.
So it could be that those costs are allowed to be rolled up or wrapped up into a mortgage. I think the reality is when you look at it, the buyer's agent pay, the buyer pays all of the commission 'cause the buyer's paying the sales price to the seller that allows the seller to pay the commission to his or her agent, and allows the listing agent to split the commissions.
With a buyer's open buyer's agent, it is going to be interesting to see what happens. These cases are gonna be flowing through the system over the next couple of years, and there could be big changes, uh, coming. We'll be back this time, same time, same channel next week, and we look forward to talking to you then Atlanta.
Have a great week.