# Are Realtors/real estate agents REALLY worth 6% of the sale price of my home? **URL:** \ **Category:** In My Humble Opinion\ **Created:** [February 7, 2021, 6:01pm UTC](https://boards.straightdope.com/t/are-realtors-real-estate-agents-really-worth-6-of-the-sale-price-of-my-home/932382 "2021-02-07T18:01:27Z")\ **Posts on this page:** 20\ **Page:** 11
**Author:** ![Riemann](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/riemann/32/3133_2.png) [@Riemann](https://boards.straightdope.com/u/Riemann)\ **Post date:** [November 1, 2023, 5:37pm UTC](https://boards.straightdope.com/t/are-realtors-real-estate-agents-really-worth-6-of-the-sale-price-of-my-home/932382/203 "2023-11-01T17:37:50Z")
> [@TriPolar](#): > > I’m not circling back to anything because I never addressed it previously. Then you can read the thread. ---
**Author:** ![TriPolar](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/tripolar/32/3008_2.png) [@TriPolar](https://boards.straightdope.com/u/TriPolar)\ **Post date:** [November 1, 2023, 5:39pm UTC](https://boards.straightdope.com/t/are-realtors-real-estate-agents-really-worth-6-of-the-sale-price-of-my-home/932382/204 "2023-11-01T17:39:41Z")
I don’t have to. Calling it cartel doesn’t support your argument. ---
**Author:** ![Mighty\_Mouse](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/mighty_mouse/32/7776_2.png) [@Mighty\_Mouse](https://boards.straightdope.com/u/Mighty_Mouse)\ **Post date:** [November 1, 2023, 6:37pm UTC](https://boards.straightdope.com/t/are-realtors-real-estate-agents-really-worth-6-of-the-sale-price-of-my-home/932382/205 "2023-11-01T18:37:14Z")
Huh? You do understand that any industry that spends most of its effort in marketing activities is a massive deadweight loss, right? Can only happen when prices are kept too high artificially. In places where the commission rate is 1% there are fewer agents and they spend a lot of time doing activities that benefit their customers. In places where the commission rate is 5% they spend most of their time competing for clients. In the UK you walk into an estate agents office. Then you pay them (effectively) £100 per hour for the work they do. In the US realtors chase you around town. Literally spending hundreds of hours cultivating relationships with people who aren’t in the market to buy or sell in the hope that when they are in the market they will come to you and you will make $1000 an hour for the actual work you do for them. ---
**Author:** ![DavidNRockies](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/davidnrockies/32/6279_2.png) [@DavidNRockies](https://boards.straightdope.com/u/DavidNRockies)\ **Post date:** [November 2, 2023, 8:49pm UTC](https://boards.straightdope.com/t/are-realtors-real-estate-agents-really-worth-6-of-the-sale-price-of-my-home/932382/206 "2023-11-02T20:49:32Z")
And, in a strained attempt to make something that I found interesting _appear_ relevant … There’s a tenuous SDMB connection to the National Association of Realtors: > **[National Association of Realtors CEO stepping down; ex Chicago Sun-Times CEO...](https://news.yahoo.com/national-association-realtors-ceo-stepping-184317780.html)** > > The CEO of the National Association of Realtors is stepping down nearly two months before his planned retirement, a move that comes just two days after the trade group was dealt a punishing judgement in federal court over its guidelines on real... > [@](#): > > The CEO of the National Association of Realtors is stepping down nearly two months before his planned retirement, a move that comes just two days after the trade group was dealt a punishing judgement in federal court over its rules on real estate agent commissions. > > The Chicago-based NAR said Thursday that Bob Goldberg would be stepping down after a 30-year career at the trade association. Nykia Wright, former CEO of the Chicago Sun-Times, was tapped to take over on an interim basis, beginning Nov. 20. Isn’t the SDMB owned by the Chicago Sun-Times? ---
**Author:** ![puzzlegal](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/puzzlegal/32/3827_2.png) [@puzzlegal](https://boards.straightdope.com/u/puzzlegal)\ **Post date:** [November 3, 2023, 12:11am UTC](https://boards.straightdope.com/t/are-realtors-real-estate-agents-really-worth-6-of-the-sale-price-of-my-home/932382/207 "2023-11-03T00:11:03Z")
> [@TriPolar](#): > > > [@Dr.Winston\_OBoogie](#): > > > > The $500k is already artificially high - 5 years ago, it may have gone for 350k, but there’s people out there looking and able to pay for it. > > There can’t be as many people who can pay the higher amount as there were before. It’s that simple. The increase in home prices exceeds the inflation rate. There are enough people seeking those houses to keep the market perking. Otherwise, they wouldn’t have shot up to that price. I’m guessing you’ve never bought or sold a house during a hot market. I have. And I lost out on several potentially interesting houses because someone else snatched them up. A friend turned down a house because he thought it was overpriced, and ended up buying that very house 2 years later for $200k than the price he’d turned down because the market had risen so much higher. ---
**Author:** ![DavidNRockies](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/davidnrockies/32/6279_2.png) [@DavidNRockies](https://boards.straightdope.com/u/DavidNRockies)\ **Post date:** [November 3, 2023, 1:37am UTC](https://boards.straightdope.com/t/are-realtors-real-estate-agents-really-worth-6-of-the-sale-price-of-my-home/932382/208 "2023-11-03T01:37:38Z")
> [@TriPolar](#): > > I don’t recall any short term period of inflation exceeding 300% that would make that remotely possible. Idunno’ why, but I thought it was worth clarifying what I had said: > [@DavidNRockies](#): > > When house X was “worth” $150,000 ten years ago but is worth $500,000 now … presuming the _house_ hasn’t changed – only the market it’s in has – how much different is the effort to sell that same house? IOW: Home Value Appreciation Rate ~ 12.80% per year ---
**Author:** ![TriPolar](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/tripolar/32/3008_2.png) [@TriPolar](https://boards.straightdope.com/u/TriPolar)\ **Post date:** [November 3, 2023, 6:50am UTC](https://boards.straightdope.com/t/are-realtors-real-estate-agents-really-worth-6-of-the-sale-price-of-my-home/932382/209 "2023-11-03T06:50:19Z")
> [@DavidNRockies](#): > > IOW: Home Value Appreciation Rate ~ 12.80% per year Did your income appreciate at that rate? ---
**Author:** ![puzzlegal](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/puzzlegal/32/3827_2.png) [@puzzlegal](https://boards.straightdope.com/u/puzzlegal)\ **Post date:** [November 3, 2023, 12:03pm UTC](https://boards.straightdope.com/t/are-realtors-real-estate-agents-really-worth-6-of-the-sale-price-of-my-home/932382/210 "2023-11-03T12:03:03Z")
My friend’s income hasn’t increased at anything like the rate that house increased. I watched home prices fly through the roof at a time when income were fairly flat. Yet those expensive homes sold briskly. ---
**Author:** ![DavidNRockies](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/davidnrockies/32/6279_2.png) [@DavidNRockies](https://boards.straightdope.com/u/DavidNRockies)\ **Post date:** [November 3, 2023, 12:16pm UTC](https://boards.straightdope.com/t/are-realtors-real-estate-agents-really-worth-6-of-the-sale-price-of-my-home/932382/211 "2023-11-03T12:16:27Z")
It doesn’t necessarily matter if one’s income goes up at that rate. For some people, they basically become flippers for their own primary residence, living in a house for a year or two, selling it at a big profit, and then putting that profit down on a much higher priced house. Our former neighbor was a house flipper for a living. He also basically flipped his personal residence(s) a couple of times, ending up in a beautiful home on which he put a sizeable down payment. It’s quite likely that he wouldn’t have qualified for a conventional mortgage for this ‘last’ house with only 10-20% down, given his income. It’s just another way that lots of home buying dollars may very well chase after relatively limited available housing stock. Another way is institutional investors buying up homes to make them rental properties, though that seems to be waning in many markets: > **[Investors Are Buying Roughly Half as Many Homes as They Were a Year Ago](https://www.redfin.com/news/investor-home-purchases-q4-2022/)** > > Investor home purchases fell a record 46% year over year in the fourth quarter. Some pandemic boomtowns saw declines of more than 60%. Zillow famously decided it couldn’t miss out on the “can’t miss” housing bubble. It didn’t work: > **[Zillow spent big in Colorado’s Front Range this summer, months before...](https://coloradosun.com/2021/11/15/zillow-offers-colorado-homes-front-range/)** > > Zillow closing its iBuying home-flipping business after it overpaid for more than 500 homes in 10 counties in Colorado's Front Range in 2021. But these were clear examples of too many dollars chasing too few goods. ---
**Author:** ![Mighty\_Mouse](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/mighty_mouse/32/7776_2.png) [@Mighty\_Mouse](https://boards.straightdope.com/u/Mighty_Mouse)\ **Post date:** [November 3, 2023, 4:45pm UTC](https://boards.straightdope.com/t/are-realtors-real-estate-agents-really-worth-6-of-the-sale-price-of-my-home/932382/212 "2023-11-03T16:45:12Z")
In the same way as we are paying much more of our lifetime income in health care than we did before, and in college costs, we are simply spending more in housing costs. As long as these things are considered must haves, they can consume a larger part of our income and everything else consumes a smaller part. Even more so if they are considered to have a high return on investment, e.g. if rents are rising even faster than home prices. ---
**Author:** ![Pardel-Lux](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/pardel-lux/32/20182_2.png) [@Pardel-Lux](https://boards.straightdope.com/u/Pardel-Lux)\ **Post date:** [November 3, 2023, 9:06pm UTC](https://boards.straightdope.com/t/are-realtors-real-estate-agents-really-worth-6-of-the-sale-price-of-my-home/932382/213 "2023-11-03T21:06:27Z")
Peter Coy, from the NYT, sent me this quote at the end of his newsletter e-mail: > ## Quote of the Day > > “We believe this is a significant hit for real estate brokers, but we don’t think this is over yet at all. There are more battles to be had.” > > — Makenzy Mohrman, a financial services analyst at Capstone LLC, on a federal-court decision that found the National Association of Realtors and several large brokerages had conspired to inflate the commissions paid to agents ([Oct. 31, 2023](https://nl.nytimes.com/f/newsletter/Gb7PFUCd5BKxRnN3p-Dwgw~~/AAAAAQA~/RgRnJ66PP0RvaHR0cHM6Ly93d3cubnl0aW1lcy5jb20vMjAyMy8xMC8zMS9yZWFsZXN0YXRlL25hci1hbnRpdHJ1c3QtbGF3c3VpdC5odG1sP3RlPTEmbmw9cGV0ZXItY295JmVtYz1lZGl0X3BjXzIwMjMxMTAzVwNueXRCCmVCjylFZQ45-rFSE2ZlcnJlcmJ4bEBnbWFpbC5jb21YBAAAAAM~)). I think it is relevant for this thread. Real estate agents are much too expensive in Berlin and Brandenburg as well (6% + 19% VAT), but in other regions of Germany they cost less than half that. There is no reason for that. The phenomenon, I believe, is a world wide problem: if they can, they will grab as much as possible. This is one of several reasons why in Germany, particularly in bigger cities, where people move house more often, people rent much more than they buy. Buying makes moving house much too expensive. In rural regions people often stay put for longer, that dilutes the cost of the real estate agent over the years. ---
**Author:** ![chela](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/chela/32/21582_2.png) [@chela](https://boards.straightdope.com/u/chela)\ **Post date:** [November 3, 2023, 9:32pm UTC](https://boards.straightdope.com/t/are-realtors-real-estate-agents-really-worth-6-of-the-sale-price-of-my-home/932382/214 "2023-11-03T21:32:45Z")
Membership in the realtor multiple listing service includes access to any property’s transaction history including disclosure documents. Membership comes at a price. With educational requirements for licensing affording additional opportunities for real estate entrepreneurs. Any broker will say the broker reciprocity for commissions is negotiable but nobody dares veer outside their lane. Trickle up economy ---
**Author:** ![CookingWithGas](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/cookingwithgas/32/485_2.png) [@CookingWithGas](https://boards.straightdope.com/u/CookingWithGas)\ **Post date:** [November 6, 2023, 2:20am UTC](https://boards.straightdope.com/t/are-realtors-real-estate-agents-really-worth-6-of-the-sale-price-of-my-home/932382/215 "2023-11-06T02:20:25Z")
Relevant news: [https://www.cnn.com/2023/11/05/homes/nar-verdict-real-estate-commission-fee/index.html](https://www.cnn.com/2023/11/05/homes/nar-verdict-real-estate-commission-fee/index.html) **After a $1.8 billion verdict, the clock is ticking on the 6% real estate commission** By Anna Bahney, CNN 5 minute read Published 4:00 AM EST, Sun November 5, 2023 ---
**Author:** ![BwanaBob](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/bwanabob/32/2985_2.png) [@BwanaBob](https://boards.straightdope.com/u/BwanaBob)\ **Post date:** [November 6, 2023, 5:19pm UTC](https://boards.straightdope.com/t/are-realtors-real-estate-agents-really-worth-6-of-the-sale-price-of-my-home/932382/216 "2023-11-06T17:19:35Z")
Like any organization, they protect their own. We had a Realtor managing our rental property and then had him put it on the market to sell. He did the least amount he legally could because he was losing his monthly rental management fee. We weren’t happy with him and asked to be let out of our contract. I’ve been told that a “reputable Realtor” will let you go if you’re unhappy with their service. Not his guy. He held us for 4 more months (til year’s end) and did nothing. I contacted the county Board of Realtors to complain. They basically said tough crap, their hands were tied. We found another agent who took over the sales on Jan 1. She sold the house within 2 weeks, As far as I’m concerned, the Realtor moniker means nothing. ---
**Author:** ![Mighty\_Mouse](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/mighty_mouse/32/7776_2.png) [@Mighty\_Mouse](https://boards.straightdope.com/u/Mighty_Mouse)\ **Post date:** [November 6, 2023, 5:58pm UTC](https://boards.straightdope.com/t/are-realtors-real-estate-agents-really-worth-6-of-the-sale-price-of-my-home/932382/217 "2023-11-06T17:58:02Z")
> [@BwanaBob](#): > > As far as I’m concerned, the Realtor moniker means nothing. It absolutely means something. It means you’re 100% committed to boycotting discounters and trashing FSBOs. ---
**Author:** ![Saint\_Cad](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/saint_cad/32/18907_2.png) [@Saint\_Cad](https://boards.straightdope.com/u/Saint_Cad)\ **Post date:** [November 6, 2023, 6:10pm UTC](https://boards.straightdope.com/t/are-realtors-real-estate-agents-really-worth-6-of-the-sale-price-of-my-home/932382/218 "2023-11-06T18:10:17Z")
> [@TriPolar](#): > > Don’t you think it’s a lot harder to sell the same house for $500,000 than it was for $150,000? Absolutely! The timeframe was 10 years. Have salaries increased by more than 200% in the last 10 years? Or put it another way, how many people could TODAY afford to buy the house they’ve bought. I know I couldn’t. ---
**Author:** ![Mighty\_Mouse](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/mighty_mouse/32/7776_2.png) [@Mighty\_Mouse](https://boards.straightdope.com/u/Mighty_Mouse)\ **Post date:** [November 6, 2023, 7:50pm UTC](https://boards.straightdope.com/t/are-realtors-real-estate-agents-really-worth-6-of-the-sale-price-of-my-home/932382/219 "2023-11-06T19:50:51Z")
And yet they do. How hard is it to understand that people pay a higher proportion of their income for housing than they did 30 years ago. And a higher proportion for healthcare and higher education as well. And a lower proportion for a lot of things. Especially clothing, consumer electronics and appliances. ---
**Author:** ![Voyager](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/voyager/32/133_2.png) [@Voyager](https://boards.straightdope.com/u/Voyager)\ **Post date:** [November 11, 2023, 10:36pm UTC](https://boards.straightdope.com/t/are-realtors-real-estate-agents-really-worth-6-of-the-sale-price-of-my-home/932382/220 "2023-11-11T22:36:47Z")
> [@Saint\_Cad](#): > > The timeframe was 10 years. Have salaries increased by more than 200% in the last 10 years? Or put it another way, how many people could TODAY afford to buy the house they’ve bought. I know I couldn’t. It depends on where you are. Where I am the lack of inventory means that houses sell really quickly for more than their absurdly high listing price. So it doesn’t matter if we can’t afford our houses, there are enough people who can. ---
**Author:** ![Euphonious\_Polemic](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/euphonious_polemic/32/3002_2.png) [@Euphonious\_Polemic](https://boards.straightdope.com/u/Euphonious_Polemic)\ **Post date:** [November 15, 2023, 7:44pm UTC](https://boards.straightdope.com/t/are-realtors-real-estate-agents-really-worth-6-of-the-sale-price-of-my-home/932382/221 "2023-11-15T19:44:28Z")
Recent anecdote: We just sold my mother in law’s condo. In my Brother in law’s opinion, the market was not great, and he thought it should be listed for $330,000. He also thought staging the condo and getting a professional cleaner in was a waste of money. We convinced him to go with a traditional real estate agent, one who had a lot of local experience selling condos (specialist). She got a professional cleaner in. Staged the place with a much more modern look. Listed for $400,000, just settled on a final offer of $390.000. The company made 6% on the 1st 100,000, 2% on the remainder, total $13,800. The actual realtor gets a proportion of this, and pays all her costs out of it. All in all, we were pleased. ---
**Author:** ![Riemann](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/riemann/32/3133_2.png) [@Riemann](https://boards.straightdope.com/u/Riemann)\ **Post date:** [November 15, 2023, 7:47pm UTC](https://boards.straightdope.com/t/are-realtors-real-estate-agents-really-worth-6-of-the-sale-price-of-my-home/932382/222 "2023-11-15T19:47:03Z")
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