Do The Math

Here's a little math problem to put things in perspective. If a home is sold for $250,000 the realtor commission is 6% or $15,000. A transfer tax of 0.4% would be $1,000 or 1/15th of the realtor fee. If that home appreciates in value, say 5% every year, after 30 years the home will have a value of $1,029,034. If the same home is sold every 5 years, with 6% going to realtors every time, the total amount spent on realtor commissions over 30 years will be $234,224 for a house that originally sold for $250,000.

Over the same period just $15,615 would represent the amount going to a transfer tax of 0.4%. Over the 30 year history of the house 23% of the final value of the house will have gone to realtors while just 1.5% would have gone towards transfer tax for public services essential to maintaining the value of a home. Or to put it another way, Over the 30 year history of the house 94% of the original value of the house will have gone to realtors while just 6% would have gone towards transfer tax for public services essential to maintaining and increasing the value of a home, over 30 years.