New fee system set for 2024 amidst evolving real estate commission dynamics
Fathom Realty is revising its fee structure for real estate agents, effective Jan. 1, 2024. This change comes at a time when the real estate industry is grappling with issues around commission structures and antitrust concerns.
The revised fee structure includes an increase in the annual fee charged on an agent’s first transaction each year from $600 to $700. Additionally, a new ‘High-Value Property Fee’ will be applied to sales over $600,000, in addition to the standard transaction fee of $550. This fee includes an additional $200 for properties priced between $600,000 and $999,999 and an extra $250 for each $500,000 increment over $1 million.
Fathom CEO Marco Fregenal addressed the changes, noting their alignment with industry practices. “Fathom Realty offers one of the best industry commission structures that recognize our agents’ hard work and dedication while providing them with the necessary resources to excel,” he said in a statement.
Fregenal anticipates the fee adjustment will minimally affect agents but add an estimated $3.1 million in EBITDA for 2024.
Samantha Giuggio, chief operations officer of Fathom Realty, emphasized the company’s commitment to its agents. “We remain committed to providing the highest level of support and resources for our agents, and, as the real estate industry evolves, we will continue looking for new ways to help our agents achieve their best. This change is designed to help us accomplish exactly that,” she said.
The real estate industry has been facing scrutiny regarding commission structures. Recent lawsuits, such as an $18 billion antitrust case, have challenged traditional commission-sharing practices, raising questions about transparency and fairness in the industry.
Read more: Commission-sharing lawsuit – will it lead to major changes?
The National Association of Realtors (NAR) has also been embroiled in legal battles, with outcomes that could potentially redefine how buyers’ agents are compensated. These developments highlight a growing need for adaptability and transparency in commission models, a challenge Fathom Realty aims to address with its latest structural changes.
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