Commission is the way in which the commission estate agent is paid, and is probably the most unfair and unethical form of payment imaginable. Real estate commissions have been described as a form of “wealth tax” levied by commission estate agents.
The use of the commission concept allows the commission estate agent to charge fees that are totally unrelated to the amount of service provided. This becomes apparent when the tasks involved in the sale of residential real estate are broken down and examined individually.
The commission estate agent requires comparateively little skill or training to perform his or her role. Other professionals in the real estate industry carry much more responsibility (e.g. lawyers and valuers) and must gain tertiary qualifications in order to become accredited.
In his book “Real Estate Without Agents” (Rowley Publications Sydney 2004) journalist Terry Ryder observes at p.6 that a commission estate agent’s commission, if converted to an hourly pay rate, equates to $675 per hour!