Realtor's are overpaid for what we do. I am reminded of this often. One of the things that enticed me as it does many others to the business was those fat commission cheques I heard about.
Let's take a look at how money flows in the business of Real Estate compared to most businesses where employees receive a pay cheque at the end of each week. That pay cheque most receive as a salaried or by-the-hour employee is their portion of profits generated after all of the expenses incurred in generating that profit have been looked after.
When a Realtor receives a commission cheque, many of those same expenses and a few other industry related expenses are incurred as well, but unlike your cheque which is yours to do with as you wish by the time it reaches your hands, the Realtor still has all of these expenses to pay from his or her cheque.
Consider the following: The Real Estate industry across Canada is represented by around 100,000 licensed Realtors. In addition to Realtors, there are well over one million people in Canada who earn their livelihoods off of those very same Realtor commission cheques. Administration, management, Brokers, teachers, trainers, coaches and various other staff are paid from those Realtor commissions.
Our Canadian Real Estate Association, each Provincial Real Estate Association, the Real Estate Council, the MLS (Realtor.ca) and each of the hundreds of local Real Estate Boards, their utility costs, taxes, staff plus the cost and upkeep of the bricks and mortar they work within is paid for out of the Real Estate commission fee that you negotiate with a Realtor to have them represent your Real Estate sales and purchases.
Let's take a look at how money flows in the business of Real Estate compared to most businesses where employees receive a pay cheque at the end of each week. That pay cheque most receive as a salaried or by-the-hour employee is their portion of profits generated after all of the expenses incurred in generating that profit have been looked after.
When a Realtor receives a commission cheque, many of those same expenses and a few other industry related expenses are incurred as well, but unlike your cheque which is yours to do with as you wish by the time it reaches your hands, the Realtor still has all of these expenses to pay from his or her cheque.
Consider the following: The Real Estate industry across Canada is represented by around 100,000 licensed Realtors. In addition to Realtors, there are well over one million people in Canada who earn their livelihoods off of those very same Realtor commission cheques. Administration, management, Brokers, teachers, trainers, coaches and various other staff are paid from those Realtor commissions.
Our Canadian Real Estate Association, each Provincial Real Estate Association, the Real Estate Council, the MLS (Realtor.ca) and each of the hundreds of local Real Estate Boards, their utility costs, taxes, staff plus the cost and upkeep of the bricks and mortar they work within is paid for out of the Real Estate commission fee that you negotiate with a Realtor to have them represent your Real Estate sales and purchases.
Every Real Estate office you see as you drive around, in any town or city, every Real Estate advertisement you have ever suffered through, from the bus bench on up to that 30 second spot during the Superbowl is paid for from those real estate agent commissions.
Consider as well that a Realtor is essentially managing and paying for a business within a business, complete with its own lists of hard and soft costs. Real Estate advertising is a multi billion dollar industry in Canada from newspapers and magazines, radio and TV to bill boards, mail outs, promotional trinkets and online marketing, all of it paid for by Realtors from their Real Estate commission cheques.
Yes those cheques can look generous and tempting at the beginning of the line as compared with the salaried employee cheque received by the time it gets through the line, and yes, they can feel good in the hand for the few minutes one gets to hold them.
Of the people who enter the business this year, more than two thirds will leave the business to go back to working for a weekly cheque. Others will stick with it and a few as in any profession will shine.
Yes those cheques can look generous and tempting at the beginning of the line as compared with the salaried employee cheque received by the time it gets through the line, and yes, they can feel good in the hand for the few minutes one gets to hold them.
Of the people who enter the business this year, more than two thirds will leave the business to go back to working for a weekly cheque. Others will stick with it and a few as in any profession will shine.
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