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The Tallest Realtor in Town

Hill Country and Highland Lakes Real Estate Blog by Jeff Spears, 6 ' 7" Tall.
Realtor Income - Not What You Think
6%, a common commission, seems like a lot. Keep in mind there are many expenses when marketing a home. First, a REALTOR and their Broker must maintain offices to serve the public. Advertisement is another very large expense. Brokers must also pay insurance to protect against potential lawsuits and claims, just like a Dr.

Every REALTOR must be sponsored by a Broker (often the owner of the business) in order to practice. The Broker takes a large cut of the commission to support their business. Often, the split is roughly half. And, if you are part of a national franchise, they take a portion as well.

So, between a buyer's and seller's agent in a transaction, each side is making around 3%. Then, they are splitting that with their Broker. A typical agents commission on a sale is between 1 and 2 percent. That agent bears many costs for a transaction themselves, so the take is not what a lot of people think.

You can make a living, but the average REALTOR is just getting by along with the rest of America.

Finally, for every deal that closes, a REALTOR has worked on 10-20 that have not. There is a lot of work that results in no income.

I really love my job, so none of this is a complaint. Just good for people to know that a REALTOR works hard for their commission and is not walking away from a deal with a commission worth several percent of the transaction.
Posted: Friday, September 18, 2009 2:54 PM by Jeff Spears

Comments

Paul Gee said:

Thank you - I am considering a career in Realty in Canada. Although rules may be slightly different, I'm sure the same advice applies. I realized that commissions are not as grand as they seem but didn't realize the extent to which this is cut down. The system seems to reward a little like pyramid sales, in as much that the person at the end (the realtor) does most of the work and pockets little of the money. Irrespective, I'm still interested and, thanks to this information, will tread more wisely.

Thanks again.

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