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How Do Real Estate Agents Get Paid?
Where Does That Real Estate Commission Really Go?
Many people outside the real estate industry have a perception that real estate agents take home large commission checks each time they sell a property.  Often times when I've spoken to someone who thinks that real estate agents get paid more than they should to sell a house, I've found out that they believe the agent is receiving a check for 6% of the purchase price.  However, this isn't how real estate agents get paid.

First, let's clear up one common misconception--The assumption that real estate agents are employed by the real estate brokerage they're affiliated with.  This generally is not the case.  Most real estate agents are independent contractors and pay all of their own business expenses, including phone, transportation, advertising and marketing, continuing education, insurance, association dues, office equipment, technology, accounting and tax preparation, administrative staff, etc.  As independent contractors, real estate agents affiliate themselves with a particular brand and work under the general supervision of the brokerage firm.
To illustrate where the real estate commission goes, we'll use an example of a listing agent charging a 6% fee to sell a $250,000 house.
$250,000 x 6% = $15,000 total commission paid by ... more

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