The real estate agent charges the same commission however long it takes to sell a property. The owner pays the same for the property sold in 3 weeks as they do for one that takes 9 months. The commission charged is not related to the cost of delivering the service.
The commission charged is the same irrespective of the skills, experience, and capability of the the agent. The 6 month newbie charges 4%, plus GST + administration fee, the same as the 10 year veteran. So, commission is unrelated to the expertise and capability of the person delivering the service.
If an agent sells a $200,000 house for you it will cost you half the commission the same agent would charge you for selling a $400,000 home, with no difference in the services provided by the agent. So, the same service delivers twice the perceived value to the homeowner simply because the house price is higher (remember time and capability of the agent do not factor in).
How can it be that benefit received by the homeowner is determined by the value of the home and not the skills and capability of the service provider or the cost involved in providing that service?
Or is it really that commissions have “always been that way” and there is no real logic at all?
Is that right?