ErioirE's shortform:

ErioirE

This is a special post for quick takes by ErioirE. Only they can create top-level comments. Comments here also appear on the Quick Takes page and All Posts page.

The National Association of Realtors is a rent-seeking organization. This is because commissions should be ~~strictly proportional to the amount of work required for the specific task~~ able to change with market forces rather than an arbitrary percentage of the value of a particular property, since the effort needed to sell a property is not necessarily proportional to the value of said property.

I'm disgusted that they've managed to make a percentage of property value the accepted norm for commissions. How were people suckered into that rather than demanding per-hour rates?

Edited to reflect insight gained from comments.

3Jozdien2y

To a seller, the value add is the outcome of selling the property, not the effort put in by the realtor. Why doesn't it then make sense for realtors who provide equivalent value quicker, to be paid more per hour?

Because absent their monopoly on certain types of advertising, competitors could offer the same value for much less. In retrospect I suppose the actual problem is then the monopoly power not strictly the effort from the seller or lack thereof. I'll add to the OP to reflect that/cross out what I no longer endorse.

1ErioirE2y

I could be convinced to have a more nuanced understanding. I'm confident I have not read enough of the writing on the topic. What would you recommend?