“The high commissions haven’t made most real estate agents rich,” The New York Times commented. “Instead, the commissions have created a bloated and unproductive sector. That’s because the possibility of earning enormous commissions is so powerful an incentive that it has led thousands of people to become real estate agents.
“When lots of agents chase a limited number of deals, many of them end up underemployed, working on only a handful of deals annually.
“Informal industry estimates suggest that agents generally spend only few dozen hours working on each deal and doing things home buyers value, like showing houses, evaluating prices, negotiating with sellers, and coordinating inspections.
“Instead, by most accounts, real estate agents generally spend the bulk of their time trawling for fresh business.
“From a broad economic perspective, much of this is wasted effort. Agents are like gold miners paning for a big nugget — a buyer purchasing an expensive home! — that will make their year. Just as some prospectors get rich, so do some agents. But most spend their days in a fruitless search for pay dirt.”