Image courtesy of Flickr, tiarescott
L.A. is one of the most popular counties in the U.S., with millions of residents calling it home. This article will outline how many homes have sold in L.A. County, the total sales volume, and how much in commission brokers and real estate agents made.
As of the 2010 U.S. Census, the county of Los Angeles has a population of 9,818,605, making it the most populous county in the United States. Los Angeles County alone is more populous than 43 individual U.S. states. The county of Los Angeles also happens to be a very popular destination for foreign investors looking to buy residential real estate as a primary residence, vacation home or an investment property.
According to Redfin, a residential real estate company that provides web-based real estate databases and brokerage services since 2004, there were approximately 70,900 properties sold in the County of Los Angeles within the last year. These properties only include Single Family Homes, Condominiums and Townhomes. The following chart breaks down how many of each property type were sold.
The median sales price of homes is derived by viewing a list of the selling price of properties, then taking the price that falls in the middle of the range from low to high. For example, if we are looking at a list of three properties that sold for $250,000, $300,000 and $350,000 respectively, then the median sales price would be $300,000.
With this in mind, the following table and chart breaks down and visualizes the median sales price of homes in the County of Los Angeles on a monthly basis from August 2014 - August 2015 according to Zillow, an online real estate database founded in 2006.
|Month/Year||Median Sales Price|
For our calculations, we summed up all the median sales prices in the table above to equal $6,349,000 and divided that sum by the 13 months in order to attain a single "average" median sales price over the past year, which equals $488,385.
We will take this average median sales price ($488,385) and multiply this number by the total number of units sold in the past year (70,900) in order to help us calculate an approximation of how much commission was paid by Los Angeles real estate sellers to their brokers and agents.
Based on our research, we have found that the majority of property sellers use the services of a traditional California real estate brokerage to help them list, market, negotiate and sell their properties. These sellers pay within a range of 4 - 6 percent of the final sales price as the commission fee.
For our intents and purposes, we will use the middle of range at approximate that sellers of Los Angeles real estate paid their brokers 5 percent of the selling price as a commission fee to sell their homes.
According to Redfin, approximately 70,900 single family homes, condominiums and townhomes were sold in the County of Los Angeles within the past year. Considering the average median sales price of $488,385 mentioned above, and multiplying this number by the 70,900 unit sold, we can estimate that Los Angeles County real estate brokerages assisted their clients in selling a total of $34,626,486,500 of real estate within the past 12 months. Well over $34.5 billion.
So how much commission did sellers of these Los Angeles County homes actually end up paying to their real estate brokers and agents in commission fees after all? To attain this amount, we simply take the $34.5+ billion figure from the total number of units sold mentioned above, and multiply this figure by a 5 percent commission rate:
$34,626,486,500 x 5% = $1,731,324,825
Finally! Based on our calculations, sellers of Los Angeles County real estate paid their brokers and real estate agents approximately $1.731 billion in real estate commission fees in the past 12 months.
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