Understanding real estate commissions

How are fees determined?

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DEAR BOB: I look forward to your excellent articles. But you have never addressed my question. Why are real estate sales commissions a percentage of the home's sales price? It seems to me the sales effort by a real estate agent is about the same for a $100,000 house as a $500,000 house. But why should the listing agent receive a sales commission five times higher for the $500,000 house than the $100,000 house? – Mohsen S. DEAR MOHSEN: As long as I can remember (I am a "newbie" who has only had my real estate broker's license for 37 years), real estate sales commissions have always been a percentage of the property sales price. Purchase Bob Bruss reports online. My first home I purchased for $28,000 gave the listing agent a fantastic 6 percent sales commission of $1,680. Of course, that was many years ago. But the sales commission percentage rate has remained virtually unchanged as home values increased. However, today in many cities you will find so-called discount realty age...