Not a Real Reward Firstly, a real estate commission is not tied to effort, time spent, skill, knowledge or experience. It simply reflects a percentage of the value of the home being sold. A $2,000,000 home does not necessarily require more time, effort, skill, knowledge and experience to sell than a $500,000 home, yet the owner of the $2,000,000 home will pay four times as much as the owner of the $500,000 home. Even though there is a stark contrast between the home values in the above example, it applies to any value. At 2.5% commission, the seller of a $700,000 home will pay $5,000 more commission than the owner of a $500,000 home, despite the fact that the more expensive home may be sold sooner by a less experienced agent, who needs to spend very little time on the campaign. What is worse is that even if the real estate agent who is marketing the more expensive home does a poorer job than the agent marketing the cheaper home, and sells the home for less than market value, he will still walk away with a greater reward. The simple fact is that the value of a home has no bearing on the time, effort, skill, knowledge and experience required to market it. The reward for marketing a home should never be tied to its value.
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