I've never had a realtor justify their commission to me. Not one.

Tom. Commission have always been negotiable. Back when the market was booming commission were going down quickly. Then thngs slowed up and commission started going up again. Sellers figured out they needed to shop experience instead of cost. And to get more experienced agents they had to pay higher commissions.

Of course now the banks are trying to control commission since so many propetries are REOs and short sales.

Tom: I so agreed with a comment you left on another blog which led me to look at your profile and blog and then I saw this post.  Wow!  Realtors truly need to do a better job of educating the public and apparently some of those we partner with in lending, as to our commission.  I would invite you to walk in my shoes for awhile.  But for the sake of argument, and I don't want to argue about it at all.  Let me just say, that commission has always been negotiable and many times the commission gets negotiated down in the end anyway to make the deal work.  But, regardless, as an agent, I do not make $18,000 commission based on the example you used.  That amount is split more often than not between two brokerage firms and perhaps, there is even a 25% or more referral fee involved as an additional part of that split.  If I only had to sit behind my desk to sell a house, then I would be all for 1 or 2% commission.  As for comment #1:  I guarantee you I can break down what I actually make when it's all split out and if you think it's still too much for the service I provide, then I will happily suggest you sell or buy your own house. Wonder why it is, more than 80% of those who try to sell their own house ultimately wind up listing with a Realtor.

The fact is, after I take the risk of marketing a home, (because I don't get paid unless it sells but it still costs me money to try to sell it), and cover all of my marketing expenses (which I must say is an extensive list with mobile websites, mobile id codes specific to a property, regular website, blogging sites, virtual tour sites, plus photo equipment and video equipment, etc.), and cost of my phone bill, postage, time, fuel which keeps going up by the way at no cost to the buyer to ride around in my vehicle, split the commission with the co-operating agent, my real estate broker and corporate fees, pay the Error and Omission Insurance, Real Estate Board and MLS dues,other real estate membership dues, lockbox costs, cost for continuing education, self employment taxes, expenses for equipment laptop, printer, and supplies, income taxes, health insurance, and time!  Time IS money and my expertise, experience and knowledge of the real estate market is valuable, so is the team of top professionals I've assembled for the benefit of my client which include lenders, home inspectors, appraisers. I fight for every dollar for my client and yet I am expected to reduce my pay.  My commission is reduced when the price is reduced and only the seller can agree to sell at a certain price, not me.  I love to have this conversation with anyone who wants to question what I make.  I have no problem at all, laying it out.

Thanks for breaking it down, Donna. But really, I have to pay for all of the same things you do. But instead of paying for realtor licensing fees and such, it's NMLS fees. And now to be a licensed mortgage loan officer in the state of Delaware, we all have to have a credit score of 700. Thank goodness I passed that requirement! How many realtors do you know who have over a 700 score? I make 1-2% on every deal, of which 30% of that goes to my broker. So, I don't want to hear a Realtor EVER tell me my commission is negotiable when Realtors make significantly more than I do on every deal.

Smart move Tom.  LOL  

You know I have an excellent credit score but that aside, I feel credit scores carry too much weight when it comes to someone's ability to do their job.  I think it's unfortunate in some ways that it comes down to a credit score in order to get a job these days.  I understand all the arguments for it but I think there are equally valid arguements against it too.  Especially since the economy has been so tough on so many in the last few years.  I deal with absoulelty wonderful and exceptional people on a daily basis who have been hurt in one way or the other by the economy, thus affecting their credit score.  If I only judged them based on their credit score and excluded them because they didn't meet a certain number that someone decided is the magical number, what a loss of opportunity.  

And finally, There's so much more to marketing, selling and helping buyers find a home than fees.  I figure your commission is your business which is between you and your client and far be it from me to question it, I don't walk in your shoes, I walk in mine.  But we know too, there is so much more to it than just fees.