Do Realtors Get Paid Too Much Commission

T

his article was written to      and commissions is how the money
answer many of the most         is used and where it goes.
frequently asked questions
on this topic. I hope you find        Who Does What With The
this information helpful. I think     Commission?
most of us wonder out loud if         The whole commission does not go
realtors are paid too much            into the pockets of the realtor.
commision.                            Realtors only get a small portion
                                      of the total commission. Below is
The real estate market has been       a usual breakdown of what happens
quite exciting over the last few      to a commission when it is paid
years. Record sales prices,           upon closing.
transactions and astonishing new
construction development has          Suppose you sold your $300,000
brought one and all who is anyone     house this year and paid 5%
into the real estate profession.      commission. At $15,000 total
With numerous realtors and so         commission, traditionally it is
little inventory, rivalry amongst     split between both the buyer's
realtors has grown ferocious.         broker and the seller's broker.
instantly, the customary 6%           Both brokers would gross $7,500.
commissions fell to 5%. then, the     Then, your listing agent and the
5% commissions dropped to 4% and      buyer's agent would each get a
in some cases even lower than         portion of the $7,500 each of
that. I am an champion of             their brokers received. The
competition. I feel it keeps a        portion amount will differ for
healthy market flourishing.           each agent depending on their
Nevertheless, what many realtors      divide agreement with each of
fail to spell out to their            their brokers. An average 60%.
selling prospects when                60% of $7,500 is $4,500. Now
negotiating a listing contract        factor in all the advertising

costs including flyers,               Let's discuss realtors that are
mail-outs, ads in the a number of     easily willing to reduce their
papers and industry magazines,        commissions to get your listing.
open house costs, placement of        You have every right to negotiate
signs, virtual tour costs, etc.       a lower commission for realtor
Suddenly, the $4,500, the agent       services. But what are you
is netting less than $3,000.          actually negotiating? The realtor
Under extremely favorable             commission is split up in so many
conditions, the time it takes to      ways to where nearly 4
list a home, market it to be sold     individuals get a cut and another
and take it to the closing table      large portion goes into marketing
is 50 days. If you do the math,       costs. So, if you are the seller
and based on $3,000 take home for     and usually a seller pays the
the Realtor, they earned $60 per      commission, you are really
day while actively selling your       negotiating away your marketing
home.                                 dollars and a realtor's paycheck.
                                      In other words, you are
If your Realtor is highly skilful     negotiating away the earnings of
and very up to date about the         the expert that is supposed to
market and marketing homes, they      work hard at reaching your
are worth the commission. As an       ultimate goal; selling your
employee, your realtor is             property at the highest possible
responsible for the marketing and     price with the fewest hassles.
negotiations of your home. For        When this occurs your realtor has
most people, a house will be the      no real encouragement to work
largest priced product you every      hard for you and the sale of your
buy or sell.                          house. A realtor might decide not
                                      to market your property as much
Do you really benefit from            as they normally would if paid a
negotiating a lower commission?       higher commission.

                                      level of service and/or results
If a realtor is so easily willing     your realtor has delivered, you
to give up the money they work        should interview several realtors
hard for or accept at lower           before making a decision. If you
commission just to get your           expect commitment and dedication
listing, how easily will they         from your realtor to provide
give up your money that you           quality service, inquire as to
deserve and work hard for in the      his or her real estate sales
sale of your home?                    track record.

The value of a realtor is really      I want to thank you for visiting.
based on the level of service you     Go ahead and look around to find
expect and the results you expect     additional helpful tips and
your realtor to deliver. If you       information.
have been disappointed in the

About the Author:

Sintilia Miecevole loves real estate and invites you to visit http://www.realtorv.com for resources including realtors, find a realtor, real estate and more. Be sure to visit http://www.realtorv.com for further information.