The real estate industry is witnessing a transformative shift.
If you have any money in the markets — in stocks, bonds, 401k, pension, gold, cryptocurrency, or private investments — the story below is just a small piece of a much larger story affecting investors, and you’ll want to adapt before it’s too late.
More on this shortly.
But first, let’s look at the changes in real estate commissions.
Traditionally, real estate agents charge a standard commission of around 5-6% of a property’s sale price. But today, new technology and the growing availability of online real estate platforms have paved the way for alternative commission structures.
Some agencies now offer a menu of services, allowing sellers to pay a fixed amount for specific services they need (rather than a 5-6% fee on the property’s sale price).
Another innovative approach gaining traction is tiered commission structures, where agents offer different commission rates based on the property’s value or sale price.
For instance, a lower percentage might apply to properties above a certain price threshold, offering savings to sellers with higher-priced properties.
These changes — primarily driven by the influx of technology in the real estate sector — have raised questions about the traditional value proposition of agents.
Today’s consumers are more informed and demand clear explanations of agent services and costs. In response, agents use their expertise, negotiation skills, and personalized service as factors that justify their commission — irrespective of the fee structure.
The evolving trend has the potential to reshape the dynamics between clients and real estate agents, who must adapt to remain relevant in the new landscape.
But as I said earlier, this is just one part of a larger economic story.
The past 20 years were defined by low interest rates, innovation without profits or revenues, and a risk-on mentality that ruined many people’s retirement prospects.
But today, we’re in a new era where only solid, cash-flow assets yield the best returns.
High-yield savings accounts, dividend stocks, money market accounts, and alternative investments. The point isn’t to chase the most attractive on paper. But to do deep-dive research and determine which has the best risk-reward ratio for your money today.
In other words, the days of expecting double-digit returns for just being in the markets might be over. And as with every significant financial shift, how you adapt to the new landscape will determine how your investments perform in the months and years ahead.
If you’re unsure how to grow your wealth in this market environment, see my free analysis of a reliable cash-flow asset responsible for 80% of my profits in 2023.
To big profits and beyond.