O'Koniewski warns that agents who discount their prices may jeopardize their future viability, stating that sustainable business practices are essential in an industry with such thin profit margins.
Data from AccountTech indicates that nearly 80% of brokerages would struggle to remain profitable if commission rates fell to 2%, showcasing the fragility of broker margin.
The analysis found that only 5% of brokerages achieved an EBITDA margin above 9%, highlighting a concerning trend of narrow profit margins in the real estate industry.
Brokerages averaging a profit of $294 monthly per agent could still face economic instability if commission rates continue to drop, evidencing the vulnerability to commission compression.
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