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The Tallest Realtor in Town

Hill Country and Highland Lakes Real Estate Blog by Jeff Spears, 6 ' 7" Tall.
Why Do Real Estate Commissions Seem High?

Ask a Local REALTOR - What’s Your Question?

This week’s question comes from a Beacon reader that asks, “Why are real estate commission fees so high?”.

This is a common misperception.  Frankly, before I started my real estate career many years ago, I had the same feeling.  Many people believe one or two agents walk away with the entire percentage of commission at closing.

In fact, all agents are sponsored by a Broker, whom is responsible for the agents actions.  In most transactions, there are two agents, one representing the seller and one representing the buyer.  Each of these agents must split their portion of the commission with their Broker.  So, in most transactions, the total commission is split four ways.

Running a real estate brokerage is very expensive. Offices and marketing expenses make up the bulk of the costs. Good companies will stretch their marketing costs to the maximum to give the best and most exposure to their client’s listing. Additional costs include licensing fees, liability insurance, support staff, equipment, and more.

Agents bare high costs in addition to their Broker. Many agents pay their own office rent and the bulk of marketing costs.  Agents are independent contractors versus employees and receive no benefits by law.  No paid vacation, sick leave, retirement benefits or health insurance are permitted. The success rate of agents is actually similar to that of restaurant owners.  There is a high rate of failure.

However tough it may be, there are many successful agents and brokers that truly love their jobs. The business models of Broker versus agent costs vary widely. Some believe beautiful offices drive business.  Others prefer modest offices and spend more on marketing. You deserve to work with successful agents for your own benefit.

Please submit questions by email at jeffbspears@gmail.com, or feel free to give me a call on my direct line at 325-248-4369.  

Jeff Spears is a Licensed Broker in the State of Texas.  Each Office of Keller Williams Realty is Independently Owned and Operated. If you have a contractual relationship with another Broker, this is not a solicitation for your business. Statistics are based on information provided by the Highland Lakes Board of Realtors MLS.

Posted: Sunday, August 16, 2015 2:15 PM by Jeff Spears


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