Why do realtors get payment as a % of the sale price but inspectors don’t?

Is there any rationale for why this is how it’s done?

Without even considering the fact that inspecting seems to come with far more professional liability (legal, financial, life safety) than a realtor… it seems like it would make sense that our payment should be a percentage of the value of the home. Of course inspections aren’t insurance, per se, but it is a form of reassurance of the value, in a way. So from a certain angle, I would think it should cost more for a more expensive home, not just a larger one.

I suppose you could make an argument “well then inspectors would have a conflict of interest because they might want to make the property seem better than it is”, but it seems like you can make a very similar argument about realtors getting a percentage commission.

Is there something I’m missing?

For a seller’s agent, the reason is clear. It is an incentive to get the most for the home as possible. For a buyer’s agent, it is a little more murky. There could be a conflict of interest and that is why they usually have a code of ethics to follow.


What are the other options for a realtor? Hourly rate? What about expenses? Per mile rate for hundreds of miles searching for a home? 24/7 phone calls? How do you track and bill for all involved?

For an inspector, it should be simple to calculate and bill for actual costs + profit.


There are a lot of RE agent bashers on here, but I happen to married to one. I can go into a long spill but won’t. As a HI, our time with a client and service we provide is very limited to the actual time, expense and frustrations the RE agents deal with everyday extending into months working with a single client. As I said, I won’t get into it too much, but my wife earns every bit of that commission for what she does.


My own opinions

Strength of the NAR and time in existence

IMO and most notable because the client doesn’t have to physically pay for it the cost is much easier even though it’s much more substantial. It just goes through the title company.

But with houses starting to average 3 to 400,000 or more I think this is why we’re starting to see more flat rate Realtors and lower percentage Realtors because a lot of people are starting to fight back on 18k-$50,000 in realtor fees.

They do have a lot of sunk cost though and often costs that they never get paid on so to some level I think for that they do need a higher cut than the home inspector.


Those are valid questions, but they don’t necessarily mean that realtors payment should be commensurate with the value of the home. After all, those expenses don’t inherently increase with the value of the home.

And neither does a home inspectors, so why do most inspectors charge higher fees for the same house, different sides of town, different selling price??

Flat rate realtors work great when they don’t have to pull septic permits, meet inspectors, plumbers, electricians to open a house. Walk and hand hold the clients through the financing process. Always in contact with the attorney doing the closing.

They are the Earl Scheib of real estate.


Absolutely. I certainly wasn’t trying to bash on anyone else. After all, I could do it too if I wanted to. My girlfriend has been a transaction coordinator for about two years and just got licensed herself. She’s a very busy woman and I don’t necessarily envy her position.

But she can make as much as I do in 8 months in a couple weeks. And she doesn’t have to risk her life for work, besides driving around to properties. And I can’t imagine many situations where a careless mistake as a realtor can cost you tens of thousands of dollars, although maybe there are.

But like I said, I still have questions even after ignoring those things.

And I understand that there wasn’t any one person or group of people who got together and decided upon these things many years ago… something’s value is more often than not a function of supply and demand. But it still seems like most arguments you can make that justify Realtor’s payment, you can make about inspection in some way or another.

You can set up your fees anyway you want and advertise them as such. If you base your fees on list price, so be it.

Give it a try.


Blame it on ASHI. They are the ones who started the first Inspection Association and heavily pandered to realtors for their business and support. They are the ones that kissed realtor ass to get the business and thus industry control over inspectors.
And people wonder why Nick has so much disdain for them!


I can’t do this on my own! Start an inspectors union with me.

But honestly, it’s kinda funny from a certain angle. I inspected a $1.8mil condo the other day for $375.

The realtor got 3%. I got .002%. I do not think they put forth 1500 times the amount of time/work/risk that I did.

I for one want to be paid for every inspection, not just the ones where the client follows through with the purchase. And I also don’t want to wait until closing. If the client was paying me on commission, I would need a contract to be their sole inspector for the duration of the home search process. And I might have to inspect 20 houses to get my commission.


Yep. I’m from a realtor family. Good ones who really care about their clients. Always on the phone, always working evenings, weekends. Realtor bears all cost and their brokers take a huge percentage to cover office overhead, advertising etc.

If you make good money as a realtor, you earned it. Sure, some suck and find a way to make money as sleaze balls.

But think about a realtors actual job. To connect a buyer and seller then liaison the negotiations, contract and closing. And just like home inspectors, their clients demand more and more.


Sorry you shot yourself in the foot. Hopefully it won’t hurt too long.


Capturing a buyer and seller is very very difficult. Like home inspectors, most don’t make it past year 5.

There is a realtor behind every door. Standing out consistently and getting business is a grind and is expensive.


I agree. Whenever you are inspecting high-end properties, one should remember that their liability goes way up. Those that can afford such properties can also afford to take the inspector to the cleaners.


Time/Work - It may have been the 50th condo they showed the client. Even if it wasn’t, I guarantee the agent has more time and monetary investment into it than you do as the inspector. A condo inspection is probably 3 hours total?

Risk - The agent is in no way immune to being drug into a lawsuit. Especially if they arranged the inspection or even recommended a certain inspector.


I do quite a few high rise condos in the zillion dollar range. I charge a premium but I don’t go crazy because buyers are smart. I justify my fee based on expertise and pain in the ass factor such as parking, scheduling with building maintenance and hauling my crap up elevators. I’m also very detailed (avoiding cosmetics) such as loose toilet seats and noisy fans. These clients are loyal once you earn trust and the referrals will come.


I don’t think I did at all. It was actually some of the easiest money I’ve made yet.

And I want to be clear, I didn’t ask this question as a way of saying realtors shouldn’t be making as much. I understand that’s probably how it came off. It just seems like realtors get a huge chunk of what we can refer to as “real estate professional fees” that buyers have to pay. Out of the money that gets paid to the realtor, inspector, appraiser, lender, etc… realtors get the majority of that. It’s just curious to me.

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