Where Do Your Commission Dollars Go?

By
Real Estate Sales Representative with BETTER HOMES AND GARDENS REAL ESTATE SIGNATURE SERVICE

Commission Structure

Most Sellers I encounter have no idea how the Selling Commission is structured or how it is allocated. Many consumers believe their agent's expenses are covered by their Brokerage, but in fact agents are responsible for ALL their expenses.

Here is an excerpt below from my booklet... A Real Estate Guide for Sellers .... where I explain to clients how the commission structure works.

Here is a short video explaining how commission is structured, what it covers, and how it is allocated.

Commission - What It Covers

Real Estate professionals are independent business people who must pay fees to their broker, to their boards, and must cover ALL of their business expenses before they acquire net earnings.

Most professionals receive an hourly fee for services as the work is done, but real estate agents are paidONLY when have successfully completed a transaction.

All work leading up to that point, which might include consulting, fee appraisal evaluations, listing, marketing, showing properties, advertising, prospecting, etc. remains unpaid, until two parties are successfully brought together in a real estate transaction.

How Is It Allocated? 

 

The commission paid to the Listing Broker upon completion of the sale is allocated as follows:

  • 50% is paid to the selling broker, of which the salesperson gets a portion, dependent on what level of " split" they are on at a given time.  Each agent is under contract and the split, varies with the amount of commission earned.
  •  50% is paid to the listing broker, out of which the salesperson who represented the Seller get his portion.  The amount will be dependent on what "split" they are currently on with their respective broker.  Again, this amount varies with the amount of commission earned.

What Expenses Your Agent Is  Responsible For 

  1. Licence Fees - The Ontario Real Estate Association decrees that a realtor must licenced to sell real estate under their jurisdiction and by-laws.
  2. Board Fees - Toronto Real Estate Board, and Mississauga Real Estate Board and any other Real Estate Board the agent is a member of.
  3.  Broker Fees - We are under contract to our broker for holding our licence and being the broker under whom I can trade in real estate.
  4. Advertising - All advertising, which includes newspapers, flyers, newsletters, mail-outs, web sites, feature sheets, personalized booklets, etc. are all expenses the  real estate agent is responsible for.
  5. Office Fees - A fee is paid to the broker to whom we under contract for use of such items as:  office space, computer equipment, software, fax machines,  photocopiers, phones, pagers, stationery, secretarial services, listing sign, open house signs, business cards, and automobile.
  6. Courses - Agents are responsible for all educational courses and real estate seminars.
  7. Insurance - Because we are independent business professionals, we are  responsible for our own medical/dental insurance and personal liability  insurance.

In addition to the above expenses, my commission earned is my pay cheque and also pays for:

1.  My monthly mortgage payment

2.  Groceries for my family

3.  My Car and House insurance premiums

4.  My Electric Bill

5.  My heating bill

6.  My Car Maintenance

7.  My cable and phone bill

8.  Repairs/maintenance to my home

9.  Clothes and shoes for my children

10. My computers, printers and other devices used for my buisness

11. And any an all other sundry items a typical family pays for..

There are many  "discount" agents out there who reduce their commission even before they negotiate an offer for you.  

How well do you think this agent going to negotiate for you at the offer table when he/she crumbles and gives away their hard earned pay cheque at the slightest question?

How hard is this agent going to work for you if he he/she is being paid at a discounted rate? You pay a discounted commission... you typically get discounted service.

There will be minimum effort, and minimum dollars spent if any, to market your property.

Remember, you are hiring a professional...and they should conduct themselves as a professional, as in any other type of business.

Benefits of me

Your Trusted Mississauga

Real Estate Professional

Call Me And Let's Get The Process Started!

A great experience starts with a great agent !

Helping You Make The Right Move since 1987. 

Call me at (905) 896-4622 or direct at (416) 717-6331. 

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Mississauga and Streetsville Real Estate


When you choose me to handle your real estate needs, you choose a real estate professional who cares about you and your family, who listens to your needs and who will put your interests first and foremost. I will work together with you, protecting your interests, to achieve your objectives.

I have been uniting families and homes for more than 31 years.. Let me put my 31+ years of knowledge and experience to work for you when selling or buying your next home.

 

Proud recipient of the Platinum award for outstanding serivce with a rating of 100% voted by my clients!!

A great experience starts with a great agent !

Helping You Make The Right Move since 1987. 

Call me at (905) 896-4622 or direct at (416) 717-6331

 www.mississaugarealestateonline.com    gvalvasori@gmail.com            

              

 

No part of this publication, may be reproduced, distributed, or transmitted in any form or by any means, including photocopying, or electronic methods, without the prior written permission of the publisher.  Copyright © 2018  Gloria Valvasori, all rights reserved.

 

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Rainer
252,814
Ben DeHaven
Haven Realty & Investments - Winter Haven, FL
Proudly serving Winter Haven & Lakeland, Florida

I like the point you make about an agent not being able to negotiate their own commission, how are they going to negotiate for a seller or buyer!

Jan 23, 2018 07:38 AM #1
Rainmaker
577,189
Gloria Valvasori, Accredited Senior Agent
BETTER HOMES AND GARDENS REAL ESTATE SIGNATURE SERVICE - Mississauga, ON
REAL Experience | REAL Commitment | REAL Results!

Hi Ben DeHaven thanks for stopping by my blog and for your comments!

Jan 23, 2018 08:08 AM #2
Rainmaker
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William Feela
WHISPERING PINES REALTY - North Branch, MN
Realtor, Whispering Pines Realty 651-674-5999 No.

I give a break down to anyone whom wonders and it stops the thought of us being over paid

Jan 23, 2018 09:17 AM #3
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Rainmaker
577,189

Gloria Valvasori, Accredited Senior Agent

REAL Experience | REAL Commitment | REAL Results!
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