Real Estate Agent Sales Commissions Are Dead. Long Live Home Concierge Managers.

Real Estate Agent commissions are now officially lower, gone, or negotiable. I used to work in a large sales industry (advertising) that was T-boned like this, resulting in fewer workers in just a few years. There are many OBVIOUS massive changes that occur when a whole class of sales workers lose their commissions rapidly, but these are the INCONSPICUOUS things that happen gradually...then suddenly:

1) Changing the salespeople changes the product being sold. This is the most mind-bending idea: when you go from 2M salespeople to 1M there will be differences in the home products themselves. You know how most ads and sites online are crappy looking? You can trace sales commissions to that.

2) Home sales will divide into direct and indirect sales channels. DIRECT will be the remaining Agent 2.0s Home Concierge Managers who will be brainy and techy. But INDIRECT will grow a lot: all the homes under $400,000 transacted by hobby real agents today will be sold on an INDIRECT self-service Amazon-esque Ai Exchange MLS that is everything from search to lending to concierge in a box. A river of erstwhile agent commissions will convert into (mostly hidden) fees for these platforms.

3) Listing and marketing homes will change so much with fewer human sellers that Real Estate marketing will go from 10 years behind every other industry to 5 years ahead of every industry. Don't believe me? Real Estate is so unencumbered by commoditized marketing vendors and complexity that they will hyperdrive into the consumer-centric AI future that you will see posts like "former CMO of Tesla becomes CMO of [RE co]".

4) The RE agent job description will uplevel dramatically, from being a bank teller to wealth manager. Both handle money, but only one is a fiduciary who you are glad makes A LOT more money than you. Gen Z will get graduate degrees in being a Real Estate Agent.

5) Many of the 2M agents and brokers will leave these jobs but stay in real estate. Doing what? I heard many production home builders are hiring them as salespeople. Agents decline, but RE salespeople do not, they just sell different housing products or have different titles. Co-living? Fractional? ADUs? Home Concierge? You get it...

6) Paradoxically, not much will change at all. People will sell homes, somehow. People will buy homes, however they can. People will probably buy fewer homes and rent more. Consumers will quickly grasp the new terms and conditions and tools (it's not that hard to figure out that you will negotiate a fee to a service provider just like an accountant or lawyer) and people will go about buying and selling homes. This will all be a big nothing burger for consumers mostly (even if service goes down 25% but fees drop 50%).

Ed Carey is the Founder & CEO of Audience Town, a marketing analytics platform for Real Estate that analyzes US consumer behavior for insights into their home journey. Reach him at audiencetown.com