From Baron Briefs –
REALTORSÂ® take a beating when it comes to public opinion on the amount of money they make when selling homes. And the big jump in home prices have only reverberated consumer complaints of forking over 6 percent of their home’s value. This morning, however, a prominent MIT professor, Philip Greenspun, has published a short commentary questioning if REALTORSÂ® aren’t being paid enough:
People who sell $1 million condos often complain that paying a 6 percent standard commission is too much. Economists who have studied the real estate market, however, find that in some ways the commission is too low because realtors don’t work very hard to sell clients’ houses compared to their personal houses. Why haven’t we seen anyone propose a commission structure that says the realtor gets a 25% commission… but only on the amount above the assessed value of the property?