Ouch, Our Commissions Have Fallen 33.2% Since 2000

Sad but true, according to the Consumer Price Index (CPI) published by the Bureau of Labor Statistics (BLS), inflation rate has climbed 33.2% since 2000. But to put it into the proper perspective, let’s consider how that affects our real estate commissions.

Say, for example, that you double-ended a property in 2000 at a sale price of $300,000 and collected a 6% commission. You would have received $18,000 to spend on any goods or services you choose. In 2012, however, if you were to make that same transaction, you would still collect $18,000, but thanks to inflation, you could only buy about two thirds the goods and services. Put another way, you would need $23,978 today to purchase the same goods and services you purchased in 2000. So you would have to do without some of the goodies, or would have to cough up almost $6,000 to make up the difference.

For your information.

“Inflation is a rise in the general level of prices of goods and services in an economy. When the general price level rises, each unit of currency buys fewer goods and services, and vice versa. Inflation Rate is the annualized percentage change in a general price index (normally the Consumer Price Index) that is used to measure price inflation over time”.

So You Know

Inflation rate is just one of a number of calculations you can make and learn with my ProAPOD Real Estate Calculator. It’s extremely easy to use and incredibly fast (the inflation rate calculation used in this article took me less than 10 seconds). Why not check it out at
http://www.proapod.com/real_estate_calculator.asp