On December 6th the Los Angeles Times publish an article that was title "Shaving Real Estate Commission Can Save Sellers Thousands". It highlight's that the seller gets what he paid for. The focus was on compensation. By law real estate commissions are negotiable here in California..
This article has again raise the ugly specter of a REALTORS®.---- getting over compensated for there lively hood. I ask how many other professionals so publicly get their salaries or consulting fee's discussed or challenge.
Consumers are not given insights into the many costs that go into being a independent real estate agent/broker contractor. To often a false assumption is assumed by the consumer that the real estate commission goes entirely to the agent.
In the hopes of clearing up this mystery about a real estate agents compensation I would like to point out.
Compensation
Agent
- Commission is usually divided 50/50 with a selling agent that presents an acceptable offer to seller. (Dual Agency is for a later date).
- Most agents them have a broker split which can range from a flat fee to a percent. Which is paid directly to the managing brokerage.
- Operating cost are:
- MLS Fee's
- Lock Box's
- Signs
- Advertising/Marketing/websites.
- Transportation cost.
- Personal Taxes. (Yes, Uncle Sam wants his fair share.)
- Flyer's-brochure boxes.
- Personal hourly wage.
- Transaction coordinator cost.
- Possible assistant wage/fee.
- Insurance
- Membership fees.
- Phone expense
- Office supplies.
- Fed Ex.
- Educational cost.
- Photo's / virtual tours
- Printing.
Consumers are best served by focusing on identifying and selecting a REALTOR® who best meets their needs and unique situation. The guidance and value a REALTOR® brings to the transaction cannot be determined by his or her commission rate alone.
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