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As a reminder, here is an example of an average $200,000 sale breakdown:
Quote:
Originally Posted by Apple Annie
The Realtor's commission has absolutely nothing to do with the sale price of a property. We need to get that nice and clear everyone. Usually, this is how commissions are split in most offices; and I will use a 6% commission. (There is no "standard" commission in the country, it is usually what is the common charge in a given area. Some in CA are 7%, some in the northeast are 5%).
Sale price of home: $200,000
Commission: $12,000
Listing office: 3% $6,000 anything lower is up to the Manager
Selling office: 3% $6,000 " " " "
This is where it varies according to agent's contract*,
Listing or selling agent: *depends on length of experience or incentives
{high} 60% of the 3% after desk fees: $3,480. (agent A)
{low} 40% of the 3% after desk fees: $2,420. (agent B)
Sale price of same home at $210,000
Commission: $12,600. 3% = $6,300.
Agent A $3,660. Difference: + $180.
Agent B $2,440. " + $20.
These are approximate commission splits between offices (the office always keeps 3% or half of what comes in ). These are also averages, and are not written in stone. Just an example.
So based on these examples, why would any agent compromise his or her valued license, integrity, honesty, reputation for those "difference" amounts. I also gave the home a $10,000 increase which is a big difference just to point out the increments. It's ridiculous to say there is any incentive for an agent to boost a price for his own gain.
As far as getting the buyer the lowest price for the home, no way. The agent, even the buyer's agent, has a duty to responsibly negotiate in the best interests of each party according to law. A good buyer's agent will do a CMA for the buyer showing what like kind properties in the area have sold and closed for and if he knows, what the intracacies of the sale included. There usually are variables in "the price" as well. It is up to the seller to accept or reject an offer.
Now a scenario where there is no co-broking with two agencies involved:
The listing office still keeps 3% or half of what comes in to the office, and the two agents within that office still do a similar split on the commission. If the listing agent happens to be the selling agent as well (rare), he will get the remainder after fees. But don't forget, he is also doing the job of two agents at that point.
Now let's see how the agent is getting wealthy on these sales:
Take the commission, divide it by the number of hours, and then deduct the agent's expenses (from the 1st dollar), put aside at least 25% for Uncle Sam, and see what you think the agent is actually going to net. If you still want to gripe about agents making too much money, shame on you.
The only way to make a better living in the real estate business is to work work work, and increase your production of sales every year, thereby increasing your experience and referral system. Not many folks want to work 60 or 70 hrs. a week to put up with the mistrust of the public.
You have ABSOLUTELY no idea what you're talking about. Do you know that a Realtor who sells a million dollars a year in real estate qualifies for food stamps? Think about it...one million x 6% = $60,000 divided by 4 (Seller's Agency/Seller's Agent: Buyer's Agency/Buyer's Agent) = $15,000. Could you feed a family on $15,000 a year?
If most Realtors you know live well and own more than one home I'm happy for you but that doesn't mean they all do. You need a reality check.
Why does it bother you anyway what someone else earns? Nobody cares what you earn.
I DON'T FEEL IN THE LEAST BIT SORRY FOR REALTORS IF THEY ARE GETTING FOOD STAMPS. You are right I don't care.
Out of that commission the Realtor has to pay for their own health insurance, self employment taxes, fica, mls fees (nearly $1,000/yr per mls, here in Charlotte most of us are members of NC and SC so that number is doubled), annual license fee (both states), continuing education classes, desk fees to our agency. And, we get NO paid vacation, no holiday pay, no overtime pay.
I've never walked away from a closing feeling guilty about the check I was carrying.
If this was true than you would not see a surge of new realtors trying to hack at the pie to get a slice. sorry but its huge. and again no one feels sorry for the poor rea;tor out there. You should work hard and get little. Its not like you built the damn house. LOL
Exactly. The general public has no idea how expensive it is to be a Realtor. And in addition to all the things you listed, they also don't know that most of us have to pay all of our own marketing materials (postcards and postage, business card, signs, newspaper ads, etc.). Plus, if the transaction go smoothly, or at least has the appearance of going smoothly, the public has no idea what really goes on behind the scenes with coordination of services and paperwork.
I don't feel guilty either. I work hard for my money.
oh boy, dont over emphasize what you are doing... its simple its called sales. buy something for a dollar and sell it for two... However as a realtor you don't even share the risk of buying the home... that was the sellers risk, remember? personally I think you are overpaid. just MHO
There are so many getting licenses out there because they think it's easy. They are not up to the personal attacks and haven't heard about the venom out there, which is actually jealousy in disguise.
The odds of their success is slim, and they soon fall by the wayside.
You know what you lose when you attack any profession with a broad brush ?
I couldn't agree more. And that's where we really earn our money. A true professional will not go whining to the client when there's a problem but instead will just fix it. The transaction has the illusion of going off without a hitch, and unfortunately for our profession, the sellers get the impression that selling a home is an effortless process, and we get the bad reputation of being overpaid just because a lot of our work is done "in the shadows".
uhem! cant you get a realtors licence from home? No college degree needed right? overvalued just like the homes out there.
sorry to break up the love fest but you should be asking the buyers and sellers out there what they think of you not each other.
There are so many getting licenses out there because they think it's easy. They are not up to the personal attacks and haven't heard about the venom out there, which is actually jealousy in disguise.
The odds of their success is slim, and they soon fall by the wayside.
You know what you lose when you attack any profession with a broad brush ?
Credibility.
LOL!!!
I'm not a realtor and I always said that I could spot one a mile away (this was back in the 80's when big hair, lots of makeup, long Cadillacs were the "norm" for some) but the majority of the crap "gotcha" is spewing is garbage. I'd LOVE to know what HIS profession is???? Come on, tell us or are you afraid? Ashamed? Would also love to know if "gotcha" has EVER bought a house? To me he sounds like all talk and no action.
And don't forget his experience in real estate. Has he EVER bought a house at all? Highly doubt it.
Yeah, I'd really like to know where the hate for Realtors is stemming from? Does he have the same disdain for other professions as well or just people in my line of work?
I've found that people usually dislike a profession for one of two reasons; they have tried the profession, failed at it, and then convince themselves the people still in the profession are the ones with the problem or the have had a bad experience with someone in that profession. Since I HIGHLY doubt it's the first choice, I'm going to go with the idea that he had a bad experience.
Maybe we'll be "lucky" enough to find out the answers.
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