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Showing it to 200 people before one actually agrees to buy it and makes it through the loan approval process for starters.

Imagine you're a contractor and had to spend 95% of your time pitching and doing spec work. What would your "hourly" rate be?



Irrelevant. How valuable is the work you do? You could go around 'pitching' your window washing services and land 5 out of 100 potential clients but you still aren't getting more than a few bucks per wash.


Totally relevant since all that extra time needs to be paid for or people wouldn't go into the business.


Irrelevant, since people are in window washing services despite the low pay.

Reasons for huge commissions:

1. Restricted field: you need a license, and in general these kinds of licenses are difficult enough to get to create artificial scarcity.

-> seek employment in such a field, if you think you can get in.

2. High stakes: A lot of money is moved around so it doesn't hurt so bad to give an important service provider a large chunk.

-> seek work where the money is. -> when dealing with Realtors etc., try and negotiate over the price anyway, just out of principle.

3. There is probably more to this profession than is visible from the outside. I don't know what, but usually people underestimate the complexities of professions they don't know much about.

-> ...? Maybe talk to Realtors and find out what it is like.


I'm just showing why realtors aren't as greedy as you think. The reason they get away with charging that much is because of the likelihood of being royally screwed when one buys a house.


There's a good section in freakonomics which casts light on realtors. About how they don't try that hard.

Getting an extra $10000 on your house won't earn them much more commission but makes a lot of difference to the seller. If I understand it correctly they're more likely to be on the buyer's side than the seller's.

It makes more sense to them to get sellers to accept the first offer so they can move on to the next sale.




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