Las Vegas, Nevada had been one of the cities that were hit hardest by the housing industry crisis. In the city, not only are homeowners losing their properties in record numbers, but house brokers and real property agents are also suffering from the high foreclosure numbers.
Some operators of real estate agencies in the area have reported trying various cost-cutting methods to survive the crisis and remain in business. Real property agencies have cut down operating costs, lessened the number of their staff or had reduced portfolios. According to some of these agents, being a real estate broker at this time is like being a start-up business, although most of them have been operating for ten years or more.
Agents have revealed that certain strategies are needed to cope with the crisis since business for brokers is not the same as five or six years ago. In 2004, around 64,000 homes were sold by agents in Las Vegas, which declined to 45,000 in 2009. The median price of dwellings also dropped considerably, with residential properties averaging $290,000 a few years ago compared with $123,000 in 2009.
Commissions for a home sale are usually in the range of five to six percent, with this percentage divided between seller and buyer house brokers. When current market condition is considered, real estate brokers and agents in the city have actually lost a little over $780 million worth of commission between 2004 and 2009. This drop in earnings resulted in over 5,000 real estate agents folding their operations or getting part time employment to add to the little earnings they are getting from real estate.
Real estate agents in Las Vegas who have closed their businesses have admitted that declining home sales drained the dollars that should have been coming into business operations. Added to this is the drop in home prices, which means that commissions also declined. Also, fees paid in all quarters take their toll on the profit of a real estate agent, hence the decision of thousands of them to close their business or end their real estate careers.
Most Las Vegas house brokers have revealed that gross commissions in this period are almost like operating in the housing market of 30 years ago. They also added that declining home prices and lack of property buyers are the two factors draining their commissions.
John Cutts has been educated in the finer points of the foreclosure market over 5 years.
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