The real cost of using a real-estate agent

This article is overly simplistic and rather naive.  First, the average sale takes much more than putting a sign out and collecting a commission.  Second, if an inspector identifies something to be fixed, it can be negotiated between the buyer and seller as part of the sale or the buyer can elect to reduce their offer (or not).  The realtor has no responsibility for the condition of the house other than helping the buyer be sure they understand what that condition is.

We have bought and sold 8 houses and used a realtor all but one time.  In that case, we were in a neighborhood where houses were in such demand that you just had to spread the word to neighbors and they sold themselves.  We used a FSBO site that time and it did not contribute to our selling the house.  They have probably improved since that time. 

An earlier contributor pointed out that the best realtors offset their costs.  I concur in most cases for homes of average value.  We have two realtors that we still use to point us to quality contractors and services well after the sale and they do it gladly, knowing it will improve their reputation and lead to referrals.  We had another who found us a very thorough and knowledgeable inspector who identified several problems we overlooked and saved us $25000 in the cost of the house.  It pays to dig around and find realtors with experience and knowledge who know your market.

In the case of high end homes, realtors  can generate exorbitant commissions on a flat commission rate. However, one cannot forget the marketing costs (advertising in high end outlets is extremely expensive).  And, building a strong brand name and reputation that attracts interested parties is a long and expensive process.  Not everyone uses or trusts the internet. 

Realtors will tell you that those big sales commissions offset the many situations where the realtor spends infinite hours in chasing prospects, doing marketing and never making the sale.  Personally, I think a more complex compensation system of a fixed fee plus a declining commission rate tied to the sale price would be fairer for all parties.  The fixed fee would cover the average sized sale, and while they would get more for making more expensive sales, the rate would not go up as fast. 

I worked as a full time agent and now as a part time Real Estate agent and I do agree with a lot of the comments here.   I really enjoyed working with my clients and several times cut my commission to make a deal come together.  I believe in loyalty and did a lot of the things I did in hopes that they would refer others to me and come back to me when it was time to sell their homes.  Most did and most didn't for whatever reason.  I have had some try and knock me down and some times I did without a problem but when I have a client who has their Dad call me and yell and scream at me over things about his son's deal..then I have a problem.  I have a problem when I have spent hours upon hours, writing contract after contract for a couple who refused to sign with me but did continue to call me when they wanted to look at homes and then use another agent to purchase. I then have lost out and get paid NOTHING.  Yes 3% is a lot in some cases.  But I don't receive all of that 3%.  Some companies will take up to 50 or more of that.  Which leaves us with not much after all the monthly, quarterly and annual fees we pay.  I have ran across several low life agents that I refuse to do deals with and these are REALTORS that have a code of ethics to follow.  I no longer belong to the Realtor association, I got tired of paying $500 a year so I could call myself a Realtor.  The Association really does nothing for you.  Some companies don't give you an option.  Good agents are hard to come by, I do agree with that.  I enjoy my work because I don't have to make a sale to feed my family or make ends meet.

Useless job, useless people. And very, very greedy. Most of them uneducated. A couple of classes mean nothing. Do it yourselves! Since when this is considered a job?

Being a doctor, a teacher or an engineer is a real job. Not a realtor. All of us can do better than they do.