I've learned that, as a rule of thumb, recruiters are damage and should be avoided. They are almost always more hassle than they're worth, and the chance of any recruiter ping/interaction leading to a good, paying gig is much less than if you can deal directly with a potential client, directly with a potential hirer and decision-maker. They suffer from middle-man effects, and they look for proxy signals rather than the actual substantive things they should want. They also want a big cut. And they are almost always very technically ignorant and incapable of judging what things are important, whether a person is qualified, etc. And they can "fish you", and by that I mean they tell you they have something, but it's really just to get your resume and other facts about you, put into their database, and then nothing ever happens except maybe a series of future contact attempts about gigs that just happen to have a few buzzwords in them, but you otherwise very clearly would not be interested in or available for. Again, this is my rule of thumb based on experience with most of them. I also think their profession, at least in the software industry, is going to die out, due to all the cheaper, better, smarter alternatives to sourcing and vetting.
Sometimes we are helpful as middle-men, being the "bad" guy for the negotiations (upping the salary in negotiation based on X, Y, Z). ~20% avg fee for $80,000 vs $102,000 is a difference of $4,400 to the company, and an extra (lets say 15% commission) $660 to the recruiter. However, that is way too high of a spread at that point of the negotiation to be a feasible discussion (the candidate should have been submitted at $90-$105, or $95-$110,000).
If the company is sold on the candidate, it is feasible for the recruiter to negotiate another $10,000. If the company has other options or isn't clamoring, you may lose the offer.
But, most recruiters are bunk, and the difference between $80,000 and $95,000 can be a breakdown in the offer being pulled, ergo the "real estate" example of closing the deal at a lower price (salary) and cost of losing it all together. The cost of losing it isn't worth the extra $3,000 / company and $450 / recruiter.
With a recruiter, if you let them know your top-end range, they will typically be blunt with "that is too far out of the range of the position."
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Of course, the take-home lesson is that if you aren't comfortable setting a high anchor point for your salary you shouldn't deal through recruiters. Which probably helps to explain why companies seem to love using recruiters.http://news.ycombinator.com/item?id=3501730
Companies can sway this the other way, with using the recruiting firm as the "bad guy" of "well, he/she was submitted at $85,000, why are they pushing back for another $5 (or $10),000. This happens as well (incorrectly "getting a candidate in, and we'll renegotiate up, you don't want to price yourself out!" or, submitting too high, resulting in an immediate dequal.
Ug.
Edit: many companies don't necessarily have a sense of fairness, hence asking for salary history, to offer you the lowest possible (or even lateral) salary.
