How much do real estate agents really make?
Posted on March 30th, 2010 in Renting & Real Estate | 2 Comments »
Omega asked:
You see shows like Million Dollar Listings where an average commission on a home is around $20k. Do they only sell a few homes a year? What does the average real estate agent make? Even if you cut that commission to $10k per home, that's still a lot of money. I'm just wondering if it's so lucrative, why doesn't everyone do it?
Sale by Owner
You see shows like Million Dollar Listings where an average commission on a home is around $20k. Do they only sell a few homes a year? What does the average real estate agent make? Even if you cut that commission to $10k per home, that's still a lot of money. I'm just wondering if it's so lucrative, why doesn't everyone do it?
Sale by Owner
2 Responses
New Homes In Houston Texas
You might not understand how the commission structure works. If a house is sold at a 6% commission, the Realtor does not get that entire amount.
That is split between the office that lists it and the office that sells it. Usually they are 2 different offices, but occasionally one Realtor will get both ends of the transaction.
In a simple example, if a house sells for $200,000 at 6% commission, the total commission would be $12,000.
Once the commission comes out of the sale proceeds, each brokerage gets about a portion of it (most often 50/50 per office.) Then each agent gets about half about what is attributed to their office.
So with a $12K commission, $6k would go to each office, and then each agent would have $3k BEFORE fees and expenses.
The agent pays desk fees or other administration fees to his or her office for advertising, office materials, secretarial service, closing service etc.
So from that $12k commission, the agent might get $2000, to $2500.
As an independent business person, the agent pays for MLS membership, advertising, website, mailings, signs, and many other things.
So in answer to your question, if a Realtor sells a lot of homes they can make a lot.
They can also expend a lot of energy and make very little.
marathon fl keys rentals
See above, there can be a bunch of money that comes out of every check we make. That “potential commission” that Million Dollar Listing touts is just that. It never shows the amount they really make, although they allude to the amount they spent on a broker’s open or various other showings. That comes out of your pocket, not your brokerage or your seller. I have spent a ton of money advertising and promoting a listing to never have it sell. If I sold it or not, that is my money spent. That is what much of your potential clients do not understand.