Many people don’t understand how a Realtor gets paid. They can do the math pretty quick though. Sell my $300,000 house and you’ll earn $18,000!? Wow, I have to work a lot harder and a lot longer to earn that! How much are you going to reduce your earnings by, Jeff?!
Here is the real truth behind real estate commissions. 95% of all sales are what’s called a co-broke deal which means the 6% commission is split 50/50 with another company so the agent you’re working with is only capable of earning a portion of half the total…the average agent has a 50/50 (or 60/40) split arrangement with their broker so they will earn 50/60% of that half…do the math. 60% of 50% of 6% of $300,000 is $5400 athe realtors are independent contractors meaning taxes aren’t taken out of their earnings…they need to set some aside…35% is required so of the “take home” from a $300,000 sale is roughly $3500!! I ask, how much of that do you want Mr. or Mrs. Seller?
Yes, we have a higher split with our broker…we have earned it which means we have done significant business and have “tons” of experience from years in the business…so we will earn a bit more of the 50% but that’s our reward for being successful…how would you feel if you went into work tomorrow, your boss pulled you into his office and said “you’re doing a great job! Best around in fact and you’re indispensable to this company! We’re going to cut your pay by 1/3 or more?! You may just walk out, right?
Realtors (successful ones) work very hard and long hours…spend thousands of dollars to make phones ring and to sell your home…the buyers agent you hire fills their gas tank every day at times touring you around town looking and they deserve fair compensation. When you actually “do the math” maybe next time you’ll think twice before asking for a commission reduction, or at least we hope you will. This is our livelihood and what we chose as a profession, we are good at it for a reason and we deserve to get paid. Would you hire a brain surgeon, heart doctor, dentist according to the credit they would give you from their fee?! Don’t you want the best service money can buy?
Real estate commissions have not gone up in decades…home values have. Adjusted for inflation we make very little in comparison and being asked (expected) to pull money out of our pockets, hurts. In truth the “BIG” commission you see is far more than what we actually “make” but it’s far less than what we “earn”
Maybe this will help, maybe it won’t…but it’s worth a thought, ey?