# 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:** 9
**Author:** ![Hari\_Seldon](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/hari_seldon/32/5173_2.png) [@Hari\_Seldon](https://boards.straightdope.com/u/Hari_Seldon)\ **Post date:** [January 26, 2023, 9:13pm UTC](https://boards.straightdope.com/t/are-realtors-real-estate-agents-really-worth-6-of-the-sale-price-of-my-home/932382/163 "2023-01-26T21:13:15Z")
If I accept your argument, then I didn’t pay 4% when I sold my house, as I might have sold for 4% less without an agent. The point is that this agent charges 4% on selling and nothing on the buyer; it you want to divide it differently, go ahead. ---
**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:** [January 26, 2023, 9:20pm UTC](https://boards.straightdope.com/t/are-realtors-real-estate-agents-really-worth-6-of-the-sale-price-of-my-home/932382/164 "2023-01-26T21:20:56Z")
It’s not an argument, it is objective reality. It makes no difference whether the arrangement is: Buyer gives 100 to seller, seller gives 4 to agent Buyer gives 96 to seller, buyer gives 4 to agent The transaction is exactly the same, the difference is purely an administrative matter. To suggest that the first administrative form of the identical transaction is “free” to you as a buyer is nonsense. The agent is extracting the same 4% out of the transaction any way you look at it. ---
**Author:** ![hajario](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/hajario/32/171_2.png) [@hajario](https://boards.straightdope.com/u/hajario)\ **Post date:** [October 16, 2023, 10:21pm UTC](https://boards.straightdope.com/t/are-realtors-real-estate-agents-really-worth-6-of-the-sale-price-of-my-home/932382/165 "2023-10-16T22:21:46Z")
Is it a zombie if it’s less than a year of a bump? There are some lawsuits saying that the commission system as it is amounts to collusion and violates anti-trust laws. (or something like that. An attorney will be along soon enough to correct me) > **[Real Estate Brokers Pocketing Up to 6% in Fees Draw Antitrust Scrutiny](https://finance.yahoo.com/news/real-estate-brokers-pocketing-6-185119778.html)** > > (Bloomberg) -- The lucrative broker commission system at the heart of the US residential housing market is facing unprecedented antitrust scrutiny from the Justice Department and two private class-action lawsuits that risk weakening the National... ---
**Author:** ![Raza](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/raza/32/213_2.png) [@Raza](https://boards.straightdope.com/u/Raza)\ **Post date:** [October 17, 2023, 12:38am UTC](https://boards.straightdope.com/t/are-realtors-real-estate-agents-really-worth-6-of-the-sale-price-of-my-home/932382/166 "2023-10-17T00:38:27Z")
Since it is bumped, and tangentially related, the NAR is losing its grasp: > **[More Brokerages Leave Powerful Realtor Group](https://www.nytimes.com/2023/10/06/realestate/national-association-realtors-brokerages.html?unlocked_article_code=CGJypRSv8GIPGtbrGTBBKCeMSVnoOtRtLPOALr8GdCiC8XlGnXRGutmS8g1okNQFC3rOHs8A8g48NoWUWMVUEs8oJce8C6-CgKVP8z8OjI9ky7wNuiv1F5pTXMOCb4LUKuaST_Zlz1AfxPDgHKnUXW6pkp5ehKbcHqjQvLc_wv-HAhiAkEpevumU3_WlkughoocyiuSDMpMFdyHWjTTBm1qtPw05XlU998butBTc8tnqyt4OM2DZ1dncKfVkPc_W8j0iLGzzGRcS4W_ymJxIrX2Ip_GkHcV9QY6qeyOPsPvh73cAbmL-f4PV6-q8WFLrns5eIiMZmFwtqCSnTYGvgsA7HuX1xqxRFGN3793Aqb4s4-39LQ&smid=nytcore-ios-share&referringSource=articleShare)** > > Re/Max and Anywhere Real Estate, a brokerage franchiser, will no longer require agents to belong to the National Association of Realtors, as part of agreements to settle two class-action lawsuits. ---
**Author:** ![robby](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/robby/32/11048_2.png) [@robby](https://boards.straightdope.com/u/robby)\ **Post date:** [October 23, 2023, 3:22pm UTC](https://boards.straightdope.com/t/are-realtors-real-estate-agents-really-worth-6-of-the-sale-price-of-my-home/932382/167 "2023-10-23T15:22:58Z")
> [@DavidNRockies](#): > > I haven’t read every post on this thread, but has anybody yet brought up the notion that – unless you get a _true_ Buyer’s Agent (one that you pay directly) – in many states, legally, and in most cases, practically, the real estate agent representing the buyer derives his/her commission by splitting it with the seller’s agent (who has the listing to sell the property). > > So there’s an inherent conflict of interest in many/most cases, where the buyer’s agent makes _more money_ when his putative client (ie, the buyer) _pays more_ for the house. Exactly. When I bought my first house back in 2002, we signed a contract with a buyer’s agent in which she agreed to show us houses for some period of time (90 days?), and we agreed to have her represent us if we chose to buy a house she showed us. She was paid in the standard U.S. method, though, by splitting the commission with the seller’s agent. So after about a month of looking at houses (probably a dozen or so), we found a house we liked and wanted to make an offer. The house had just come on the market and we liked the house a lot more than any other house we’d seen until that point, so our agent advised us to offer more than the asking price…which we did. I later thought about it, and wondered if it the advice was in our best interest. After all, the agent only got paid if we bought a house in that 90-day period, and she actually got paid a higher commission the more we paid for it. There was no financial incentive for our “buyer’s agent” to ensure we purchased an appropriate house for us at the cheapest possible price. ---
**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:** [October 23, 2023, 4:20pm UTC](https://boards.straightdope.com/t/are-realtors-real-estate-agents-really-worth-6-of-the-sale-price-of-my-home/932382/168 "2023-10-23T16:20:01Z")
Don’t worry, there’s a listing agent on the other side encouraging the seller to accept lower offers. ---
**Author:** ![robby](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/robby/32/11048_2.png) [@robby](https://boards.straightdope.com/u/robby)\ **Post date:** [October 23, 2023, 4:41pm UTC](https://boards.straightdope.com/t/are-realtors-real-estate-agents-really-worth-6-of-the-sale-price-of-my-home/932382/169 "2023-10-23T16:41:27Z")
> [@Mighty\_Mouse](#): > > Don’t worry, there’s a listing agent on the other side encouraging the seller to accept lower offers. What a strange system. The financial incentives of the buyer’s agent are at cross-purposes with the buyer, and the financial incentives of the seller’s listing agent are at cross-purposes with the seller. ---
**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:** [October 25, 2023, 4:51am UTC](https://boards.straightdope.com/t/are-realtors-real-estate-agents-really-worth-6-of-the-sale-price-of-my-home/932382/170 "2023-10-25T04:51:21Z")
We had sort of the opposite experience. Our buying agent advised us to put in a MUCH lower offer. Granted it was a bit of a buyers market at the time. But we thought it was insultingly low. But she did the negotiating, and the sellers came back just slightly higher than our offer. We did very well. ---
**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:** [October 31, 2023, 10:42pm UTC](https://boards.straightdope.com/t/are-realtors-real-estate-agents-really-worth-6-of-the-sale-price-of-my-home/932382/171 "2023-10-31T22:42:10Z")
Jury Finds Realtors Conspired to Keep Commissions High > **[Jury Finds Realtors Conspired to Keep Commissions High](https://www.wsj.com/real-estate/jury-finds-realtors-conspired-to-keep-commissions-high-awards-nearly-1-8-billion-in-damages-b26f9c2f)** > > The National Association of Realtors and large residential brokerages were found liable for about $1.8 billion in damages in a verdict that could upend the home-sale industry. Maybe not. > The verdict could lead to industrywide upheaval by changing decades-old rules that have helped lock in commission rates even as home prices have skyrocketed—which has allowed real-estate agents to collect ever-larger sums. It comes in the first of two antitrust lawsuits arguing that unlawful industry practices have left consumers unable to lower their costs even though internet-era innovations have allowed many buyers to find homes themselves online. ---
**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 1, 2023, 12:07am UTC](https://boards.straightdope.com/t/are-realtors-real-estate-agents-really-worth-6-of-the-sale-price-of-my-home/932382/172 "2023-11-01T00:07:19Z")
It is a bit like that bottle of wine with dinner, isn’t it? Whether the bottle costs $35 or $350, the server’s task is the same. Tipping the same 15% on both bottles … well … never made sense to me. And I consider myself a generous tipper. I’m not sure the amount of work has increased commensurate with the median home price. In many markets, it’s probably been inversely related. ---
**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 1, 2023, 1:13pm UTC](https://boards.straightdope.com/t/are-realtors-real-estate-agents-really-worth-6-of-the-sale-price-of-my-home/932382/173 "2023-11-01T13:13:45Z")
I agree with you regarding the wine price, but the effort to market and sell a $5 million home is not the same as for a $500K home. The analogy breaks down. Is it 10 times as much effort? Well maybe not, but once you get to a certain price point the buyer pool is different and smaller, so experience and marketing ability make a bigger difference. The amount of work has probably not increased but home prices are a rough surrogate for inflation in the long term so commissions going up as home prices go up is not entirely unreasonable. ---
**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 1, 2023, 1:57pm UTC](https://boards.straightdope.com/t/are-realtors-real-estate-agents-really-worth-6-of-the-sale-price-of-my-home/932382/174 "2023-11-01T13:57:57Z")
I think we’re saying different things, though. 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? In superheated real estate markets, the price of housing can _dramatically_ outstrip the price of inflation. ---
**Author:** ![griffin1977](https://avatars.discourse-cdn.com/v4/letter/g/977dab/32.png) [@griffin1977](https://boards.straightdope.com/u/griffin1977)\ **Post date:** [November 1, 2023, 2:02pm UTC](https://boards.straightdope.com/t/are-realtors-real-estate-agents-really-worth-6-of-the-sale-price-of-my-home/932382/175 "2023-11-01T14:02:03Z")
Short answer: no Long answer: nooooooooooooooo ---
**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, 2:22pm UTC](https://boards.straightdope.com/t/are-realtors-real-estate-agents-really-worth-6-of-the-sale-price-of-my-home/932382/176 "2023-11-01T14:22:14Z")
I haven’t seen realtors getting rich very often around here. The millennial housing bubble was great for a few but that was followed by the bubble bursting and hard times for realtors. There are a lot of realtors and they have to compete to get contracts on houses and frequently give away part of their commission to make sales. OTOH, the traditional commission structure probably has some inflationary effect on home prices and there are likely too many realtors competing for the properties, And I only see what’s happening in the local market, conditions may be much different in the rest of the country. > [@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? Don’t you think it’s a lot harder to sell the same house for $500,000 than it was for $150,000? ---
**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 1, 2023, 2:36pm UTC](https://boards.straightdope.com/t/are-realtors-real-estate-agents-really-worth-6-of-the-sale-price-of-my-home/932382/177 "2023-11-01T14:36:23Z")
> [@TriPolar](#): > > Don’t you think it’s a lot harder to sell the same house for $500,000 than it was for $150,000? The only ‘quick’ answer I can think of is: all other things being relatively equal, no. I think we can presume that the inflationary pressures that can rocket housing prices in a given market imply that a lot of money _is_ chasing limited inventory. In most of those markets, there is _not_ a dearth of buyers or the prior statement wouldn’t be true. So, I don’t think much changed. If – as we’ve seen – _interest rates_ rise rather dramatically, that can be a factor. In my area, time on market has lengthened (they’re not selling nearly as fast as a year or two ago), but prices haven’t come down as much as you might expect. Meaning: Realtors probably have to work a lot harder to bring a buyer for that property than they would have a couple years ago. Things _do_ change, and they change rather constantly, but if the house stayed the same but the market was on fire (and money was still cheap and plentiful), the basic job of bringing in a buyer and walking them through the sale hasn’t changed too awfully much as the house tripled in price. But the paycheck has. I’ll also grant that we could allow some elevated commissions _with the understanding that_ the lean times can kill a Realtor. But that’s a number that the market can surely negotiate. I think these discount real estate brokerage houses are making rather clear that the market _should_ be negotiating the long-standing 6% fee. ---
**Author:** ![Cheesesteak](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/cheesesteak/32/3694_2.png) [@Cheesesteak](https://boards.straightdope.com/u/Cheesesteak)\ **Post date:** [November 1, 2023, 2:39pm UTC](https://boards.straightdope.com/t/are-realtors-real-estate-agents-really-worth-6-of-the-sale-price-of-my-home/932382/178 "2023-11-01T14:39:14Z")
> [@TriPolar](#): > > Don’t you think it’s a lot harder to sell the same house for $500,000 than it was for $150,000? Why would it be? I bought a house for $85k, we still had inspections and punch lists and construction projects to deal with. The fact that it was comparatively cheap didn’t mean title searches and such were ignored, all that same stuff had to be done. The realtor also still had to take pictures, write up the listing, take people out to the house to show it, and deal with closings, mortgages, etc. That stuff doesn’t go away when the house is cheap and a quick ramp up in neighborhood desirability doesn’t make more well heeled clients more demanding, not 3x as demanding at any rate. ---
**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, 2:39pm UTC](https://boards.straightdope.com/t/are-realtors-real-estate-agents-really-worth-6-of-the-sale-price-of-my-home/932382/179 "2023-11-01T14:39:27Z")
> [@DavidNRockies](#): > > I think we can presume that the inflationary pressures that can rocket housing prices in a given market imply that a lot of money _is_ chasing limited inventory. In most of those markets, there is _not_ a dearth of buyers or the prior statement wouldn’t be true. Let’s just start with this. Do you think there as many people who can spend $500,000 on a house as can spend $150,000? I don’t recall any short term period of inflation exceeding 300% that would make that remotely possible. ---
**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 1, 2023, 2:43pm UTC](https://boards.straightdope.com/t/are-realtors-real-estate-agents-really-worth-6-of-the-sale-price-of-my-home/932382/180 "2023-11-01T14:43:00Z")
I think my answer is the same: if there _aren’t_ sufficient dollars chasing the available housing stock, then you won’t _get_ dramatic increases in housing prices. It’s some combination of increasing demand and/or decreasing supply that’s driving housing prices to rocket upward. Somebody’s buying something, even when it’s a relative handful of buyers chasing after a relatively small number of homes. And – in that case – we can, again, discuss whether the ‘per sale commission’ should be higher because the actual number of sales may be down, but … I think it’s still a discussion to be had. ---
**Author:** ![doreen](https://avatars.discourse-cdn.com/v4/letter/d/858c86/32.png) [@doreen](https://boards.straightdope.com/u/doreen)\ **Post date:** [November 1, 2023, 2:44pm UTC](https://boards.straightdope.com/t/are-realtors-real-estate-agents-really-worth-6-of-the-sale-price-of-my-home/932382/181 "2023-11-01T14:44:54Z")
Not from what I’ve seen. It _might_ be harder for people to afford it and there might be fewer potential buyers - but houses on my block selling for $600K + are selling just as fast, if not faster than they sold 35 years ago for $150K. They are selling to different people though, just like when I bought , I was very different from the people who had bought ten years before for $50K ---
**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, 2:46pm UTC](https://boards.straightdope.com/t/are-realtors-real-estate-agents-really-worth-6-of-the-sale-price-of-my-home/932382/182 "2023-11-01T14:46:42Z")
> [@TriPolar](#): > > I haven’t seen realtors getting rich very often around here. The millennial housing bubble was great for a few but that was followed by the bubble bursting and hard times for realtors. There are a lot of realtors and they have to compete to get contracts on houses and frequently give away part of their commission to make sales. But that does _not_ imply that commissions are anything other than massively inflated by a cartel. > [@Riemann](#): > > Commissions are fixed very high by a cartel, and market forces are not functioning - agents are not competing with one another _on price_ by competitively lowering their commissions. What then happens is that far too many agents enter the market, because the egregious fees available make it worthwhile even if they sell only a few houses per year. It is worthwhile for the agents to spend most of their time on client acquisition, and only a small amount of time doing productive work for clients. But that does not mean that it’s “fair” that the clients are paying for all this. > > What _should_ happen if the cartel is broken and market forces for prevail is that the fee per house should drop dramatically, 80% of agents should find another job, and the remaining agents should spend most of their time doing productive work for clients - i.e. each agent selling a lot more houses at a much lower fee per house. [Previous page](https://boards.straightdope.com/t/are-realtors-real-estate-agents-really-worth-6-of-the-sale-price-of-my-home/932382.md?page=8) [Next page](https://boards.straightdope.com/t/are-realtors-real-estate-agents-really-worth-6-of-the-sale-price-of-my-home/932382.md?page=10)