Benjamin Franklin famously said that nothing in life is certain except death and taxes. When I saw a recent article by Robert Bork Jr. claiming that the affordability crisis is due to some sort of “Realtor® tax,” I stopped in my tracks. The only Realtor® tax I’m aware of is the 15% self-employment tax I’m subject to as an independent contractor, above and beyond the taxes everyone else pays!

I’ve been in this business long enough to know there’s a lot of misinformation out there, but calling our profession the reason for inflated home prices? That’s not just wrong. It’s lazy. And it’s time we clear the air.
Choice, not a tax

Here’s the first thing we need to get straight: there is no requirement to use a Realtor®. Homeowners have always had the option to sell “For Sale by Owner” (FSBO). On top of that, buyers and sellers today can choose from a wide variety of business models, from lower fee brokers to flat-fee services to full-service concierge representation…and spoiler alert-it’s been that way forever.

When critics claim there’s some “baked-in, guaranteed” fee that artificially inflates housing costs, they’re ignoring reality. Consumers have choices. They’ve always had choices. That’s one of the things that makes our real estate system work and it’s what keeps us accountable. We’re just a convenient scapegoat for other cost inflators.

Commission is earned, not owed

Let me remind you how Realtors® actually earn their pay. I don’t get a salary, nor do most of the professionals in this industry. I only get paid at the closing table of a client’s successful transaction.

That means months of prepping, showings, marketing, negotiating, advising, and troubleshooting-all of it on me, no guarantee of compensation. If the deal doesn’t close, I don’t get paid. Period. In fact, I’m out of pocket since much of what we do to help a client succeed requires me coming out of pocket in advance.

Calling that compensation a “tax” is not only misleading, it’s insulting to the thousands of micro-entrepreneurs in this business who wake up every day ready to work for their clients with nothing but a hope and a prayer of being compensated at the end.

The real reason home prices are high

If you want to understand what’s driving today’s housing costs, look at supply and demand, not Realtors®. We are in a housing shortage, driven by complex issues like restrictive zoning, limited new construction, and yes, immigration pressures that increase demand for housing.

Layer on top of that the inflationary environment caused by the Federal Reserve’s policies, and you get today’s affordability crisis. Blaming Realtors® is a distraction from the real forces at play.

Beware of “price fixing” arguments

When I hear someone as esteemed as Bork suggesting that the Supreme Court should step in and determine what professionals are “allowed” to charge, I get concerned. Not just for Realtors®, but for every small business in America.

Telling entrepreneurs what they can and cannot earn crosses into dangerous territory. That is straight-up government wage fixing, and it runs contrary to free-market principles. Ironically, many of the critics making these arguments come from organizations that usually champion capitalism and free choice.

Here’s the truth: commissions are negotiable, consumers have options, and professionals set their fees based on the value they provide. That’s how the marketplace works. Anything else is Marxist talk, not common sense economics.

The cost of doing business

If you think Realtors® are overpaid, I’d encourage you to sit down with one in your community and ask about their cost of doing business. You’ll hear about skyrocketing expenses thanks to inflation, new marketing technology, fewer transactions because of tight inventory, and the constant need to reinvest in education, technology, and compliance.

Right now, Realtors® are also navigating unprecedented lawsuits and regulatory changes that require constant adaptation. Despite these headwinds, most of the professionals I know are laser-focused on elevating the client experience because excellence is the only way to thrive in today’s market.

The American way: Choice and value

At the heart of this issue is freedom of choice. Just as consumers can decide whether or not to hire me, I also get to decide whether or not to take them on as a client. Maybe we’re a fit, maybe we’re not. That’s how a free market works.

When someone labels Realtor® compensation a “tax,” what they’re really saying is: “I don’t see the value.” And that’s okay. You don’t have to hire me. However, you not hiring me doesn’t mean I don’t have value to someone else. 

What agents need to do right now

If you’re a Realtor® reading this, here’s the takeaway: stop being passive about this narrative. Our profession is under scrutiny, and the best way to fight misinformation is with education and action.

– Educate the public. Take the time to explain how commissions work, what clients get when they hire you, and why it matters. Don’t assume people know. They don’t. Yes, you’ve got new state forms and new rules-explain carefully and if you’re still not sure how best to do so-ASK!
– Show your value. Every interaction is a chance to demonstrate professionalism, market expertise, and care for your clients and the public at large. The more visible your value, the harder it is for critics to dismiss.
– Engage in advocacy. Stay plugged into regulatory and legislative updates. Be part of the solution in shaping the future of our industry, not just reacting to it.
– Elevate excellence. In a market with fewer transactions, the agents who thrive will be the ones who deliver a best-in-class experience every time.

Final thoughts

There is no Realtor® tax. There is a challenging housing market, there are complex economic pressures, and there is a profession full of hardworking Americans doing their best to help people achieve the dream of homeownership.

To those who think Realtors® are the problem, I invite you to walk a mile in our shoes. Spend a week navigating contracts, negotiations, inspections, financing, and the rollercoaster of human emotions that come with buying or selling a home, and do it all with the risk of earning nothing if the deal falls through. We’ll see if you can also fit in the work of prospecting so you’ll have someone with whom to do those tasks!

You’ll quickly see: there’s no tax here. There’s just hard work, choice, and value. And that, my friends, is the American way.

Leigh Brown is the Broker/Owner of One Community Real Estate.
This column does not necessarily reflect the opinion of HousingWire’s editorial department and its owners. To contact the editor responsible for this piece: zeb@hwmedia.com.