This is such a loaded question. On one hand real estate agents make a lot of money for selling a home–somewhere in the neighborhood of 6 percent of the price of a home is paid in commissions–this rate varies and is alway negotiable. On the other hand, real estate agents spend a lot of time, energy and money on tasks they receive no compensation for… A real estate agent can drive a person around house-hunting for weeks on end–who knows if that person is really serious or “just browsing”. No one but the agent pays for the gas, time, use of vehicle, etc… The agent has to pay for advertising, signs, phone, etc… I guess you can tell that I am a real estate agent (actually, a real estate broker) so I can be a bit defensive about this.

But I have to sit back and take a look at the ENTIRE picture. This is where my opinion begins to wain a bit…

Housing values have increased tremendously in most areas of the country. Additionally, people are making more money and spending more money everyday. Incidently, like Dick Cheney, I do not attribute this to the government–in fact, I say it is in spite of the government…and their spending. At any rate, the average American stays in their home 5-7 years–that’s quite a few homes selling over and over again…and quite a few commissions.

My main pet peeve is that real estate commissions have gone up at a much higher scale or rate that normal cost-of-living increases given to employees. That translates into a very beneficial situation for the agent.

I know that real estate commissions are negotiable–but I do not see many agents negotiating them. I have a problem when a homeowner has to come off their selling price by thousands of dollars–and the agent refuses to budge on their commission percentage.

I feel this trend is going to cost the agents more and more money in the long run as homeowners are going to wisen up to the trend of selling their own home. This is unfortuneate because most agents are highly skilled and worth every penny–and also don’t think twice about helping the seller save a buck or two.

The way the system (or lack therof) works now is that the successful sale pays for all the wasted time spend on “dead” customers–ones that never buy–or listings that never sell.

Take some time to discuss commission arrangements with your real estate agent and see where they stand. The agent that is upfront and honest…and will to not be so rigid will turn out to be the agent most looking out for your best interest!