David Houle of Evolution Shift says Say Goodbye to the 6% Commission Rule:

 The recommendation here has been for residential real estate agents to either lower their commission from the standard 6% or add services and create new value to keep their commission at that level. I want to be very clear:  I am not arguing against the status quo of this industry, I am just saying that the trend is obvious and relentless and that it should be fully faced.  The old days are over.  Agents that do not believe this do so at their peril.

David’s take is that in a soft real estate market, brokers no longer wield the power of being gatekeepers of listings. Combined with other changing market forces, he speculates that this could be the “perfect storm that will bring about dramatic change in the real estate brokerage business in the next two years.”

A different perspective comes from Mike at the Agent Scoreboard, a pretty slick website that allows consumer reviews of real estate agents. He has written a four part series (part 1, part 2, part 3, part 4) titled The Commission Paradox, which examines real estate commissions from the economic risk/reward perspective:

I’m a big fan of facts and proof. Last night I was watching the Science Channel about how there is some disagreement in the scientific community about how best to get humans to Mars. It caused me to think about the real estate community’s disagreement about commissions.

I think people generally believe that the following statement is true: “Real estate commissions are too high, and real estate services are overpriced”

I began to think where is the proof of that? How do we know it is true? It seems to me that we would need some supporting facts, to be able to confirm that statement applies in all situations. We need to know the following:

1. What are the standard elements to the real estate process
2. Can a baseline cost be applied to each of these elements
3. How does “service level” impact the premium placed on the baseline cost
4. What effect does the market have on the costs
5. What other factors would affect the premium calculation 

To broadly summarize Mike’s thorough analysis, his conclusion was that commissions are high primarily because consumers are unwilling to share in the risk of selling homes (i.e. they pay nothing if their home doesn’t sell). Hence, the agents take on virtually all the risk, and must then charge high fees as compensation for that risk.