I think the problem with realtors commissions, is that they show their industries productivity has fallen by roughly half over the past 40 years.
40 years ago salaries were at ~1/4 of what they are today, and home prices were at ~1/10, probably explained for the most part by most household transitioning from 1 income to 2 over that same period. Not sure how accurate it is but doing some napkin math, if a real estate transaction is a 4 way split between Buyer Agent, Sellers Agent, and their respective brokerages/business expenses. Than 40 years ago a realtor probably would have needed to be involved in ~24 transactions / year to reach the median income, and today they would only need to be involved in 12. I know those who are working realtors are not out their aspiring to the median income and are pushing for a lot more than 1 transaction / month. But I think that is the best way of thinking about their net impact vs net benefit to society, they are pulling more money out of the market per transaction relative to wage inflation than they used to, so net productivity of the industry has dropped compared to other income earners.
probably to keep pace with productivity gains, it would have made more sense for the industry to have a commission structure like
0K -100 K 7%
100 K - 200K 3%
200 K - 300 K 1.5%
300K - 400 K 1%
400K - 500 K 0.5%.........
It would have maintained a more flat fee structure like we used to see in middle income houses that were all under $100K in the 70s. While still maintaining a fairly high minimum fee standard for lower value transactions.
And it would have gotten rid of a lot of the bad incentives, buyers agents benefitting greatly from higher prices, and the need to throw money at services that only create value inside the transaction but not in the external market, just to show that they are doing something with all of the money they are collecting, and probably would have limited the number of hobby-realtors in the industry (people selling getting licensed just to for 2-3 sales per year for personal contacts), right now if you have a large enough social circle that your personal contacts can feed you 2-3 jobs / year without any marketing expense, you can probably make a pretty decent side income with relatively little effort, but when enough people do that it puts a squeeze on professionals causing them to jealously guard their inflated prices.
The real problem with this plan comes further up the inflationary ladder, when $7000 as the base for commission the first $100K is no longer a meaningful amount of money. But I would argue that should be a challenge for the industry to show real productivities gains, given that buyers do 50% of the work themselves in advance of even leaving the house, why can't the expectation be that they typical realtor handles more transactions / year in the future?
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