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A comment on Zillow CEO: startups trying to disrupt real estate commissions will fail (2012). Parent comment

Re:Zillow CEO: startups trying to disrupt real estate commis... by harryh on Wednesday January 16, 2019 @04:15PM (#18925344)
Weirdly I kinda think it should go the other way. Does it require twice as much work (or expertise) to sell a million dollar house than a 500k house? If not, why do agents get paid twice as much?
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Re:Zillow CEO: startups trying to disrupt real estate commis... by charlesdm on Wednesday January 16, 2019 @04:20PM (#18925395)
Because the $200-500k house will often (basically) sell itself.
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Re:Zillow CEO: startups trying to disrupt real estate commis... by Axsuul on Wednesday January 16, 2019 @04:23PM (#18925431)
An agent is incentivized to put in twice as much work (i.e. spending more time with the client, making the place much more presentable, etc).
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Re:Zillow CEO: startups trying to disrupt real estate commis... by surrealize on Wednesday January 16, 2019 @08:25PM (#18927491)
As more agents enter the business, a lot of their time and effort ends up going into getting clients in the first place. You end up with lots of agents spending more of their time trying to get business, with actual home-sales work taking up a smaller proportion of their time. But the increase in home prices is enough to make up for the decrease in the number of homes sold per agent.

Point being, an increase in home prices, and the resulting increase in commissions (in dollar terms) doesn't necessarily result in any benefit to clients.

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