How Much Do Real Estate Agents Make

When people say Realtors make too much money…. Have you ever wondered How Much Do Real Estate Agents Make?

I see this going around and I just don’t get it. I don’t see any other business owners posting “my business has expenses and is hard work please pay what I ask you to”. Do you think it would help your business to post this?
Before you go and ask for a discount on the commission paid to a Realtor for helping you sell your home, please understand what you’re truly asking for them to do … and ask yourself this question: If your boss came to you and asked you to work overtime, but wasn’t going to compensate you for doing so, would you still do it?
Another day, another person who says realtors are overpaid and an unnecessary part of a transaction. I’m assuming that those who think this have either been watching too much Million Dollar Listing or think they know how to do it all on their own.
A few things to consider:
Real Estate Agents don’t get to keep all the money they make on deals. You see 3% on a $600k home as $18k. The agents sure don’t.
That commission is paid to them:
✓ Before taxes
✓ Before broker splits
✓ Before marketing
✓ Before board dues
✓ Before office bills
✓ Before professional photographs on your home
✓ Before professional staging on your home
✓ Before all the other costs of doing business
Out of what’s left of their checks after all this, they can then begin paying for everything else. But wait, that’s not all!
They don’t get afforded a lot of the things you enjoy at a 9-5 job.
They don’t receive:
✓ Employer healthcare
✓ Employee matched retirement accounts
✓ Paid vacations
✓ Weekends off
✓ Nights off
✓ Maternity leave
✓ Bereavement pay/leave
✓ Company car
They pay for all of this out of their own pockets. Every single penny.
Yes, there are some realtors married to people working company jobs who receive some of these benefits. But the vast majority of real estate agents support their families on what’s left after their benefits are taken out and spoken for.
Yes, they did choose a career in real estate. It’s a career that they love and it allows virtually uncapped growth and income potential. But often they have to be available at any time of the day. Whether it’s showing homes at 7pm, writing offers at 11 pm or doing final walkthroughs at 6am. They are there, available to help their clients when they are needed.
So before you tell another one of them that they make too much money and aren’t really needed anymore, I encourage you to do the following …
Get your real estate license, start lead generating on your own, find clients who like you and trust you to help them with the BIGGEST purchase of their lives.
Make sure you know what goes in the blanks of the contracts, but also what the promulgated parts of them say. Learn the legal steps of what happens once you write a contract, and what business partners are a good fit to help your clients and who’s a scam.
Try and keep deals together when they’re about to go south with critical thinking skills all while staying within legal parameters.
Educate your new homeowner clients about what’s going to happen after they close and what to expect in the couple years to come.
Then listen, repeatedly, as others tell you the money you’ve been paid is WAY too much and they could do what you’ve done for much, much less.
Exhausting, isn’t it?

In contrast to other professionals who charge their clients by hourly rate, real estate professionals are paid at the close of a sale transaction. If the real estate agent works with buyers or sellers for months or weeks without the resultant transaction and they don’t get paid to compensate them for the time they spend. The real estate agent commissions are earned from the sale price of the property and they’ll receive the commission only after the deal is settled.

What is the average amount real estate agents make?

Commissions can be negotiated with listing brokers and clients. What is the average amount an real estate agent make? It is contingent on the value of the home. If the property is sold for $400,000, the commission of 5% would amount to $2000.

In many instances the commission is divided among the buyers agent as well as the listing agent However, there are times when the split is not negotiated evenly. For instance the seller might accept the buyer a 5.5 percent commission split so that the listing agent gets 4% while the buyer’s agent gets 3 percent of the sale.

What is the method by which real estate agents get paid?

While some real estate agents are also brokers or associate brokers–positions that require extra training and licensing–commission payments go to the broker who manages the real estate brokerage where the agent works.

The commission is split equally between the broker and real estate agent according to the agreement. The split of commissions varies between agent to the next as new agents may end up receiving a lower percentage of commission than more experienced agents or agents who are successful and have more sales of homes or expensive properties.

The commission is divided at the table of settlement between the brokerage of the listing agent and the buyer’s agents brokerage and the agents are compensated by their brokers.

Who is the person who pays this commission?

Technically speaking, technically, the real estate agent is paid by the seller of the property at the time of settlement, at which point the fee is deducted from the proceeds from the sale of the house.

However, buyers will consider the commission paid by the agent into consideration when determining the selling price. In a way buyers pay the commission as they’re buying the home.

Contracts as well as commissions

The exact amount in that real estate agent’s payment (or commission) should be specified within the listing agent’s agreement in the contract with the vendor. This will ensure you that your listing agent receives a payment if the property is sold regardless of who buys the property.

The listing agent and the broker are paid time and money to market the property, advertising it, and preparing the property to be sold, so what the real estate agent gets paid is to cover the costs of those services. Buyer’s agents usually are bound by a contract with their clients and are paid after the buyer has completed an acquisition, even if the buyer found the property independently.

If you’re a buyer, or seller, the expert support of an experienced real estate agent who represents your interests ought to be worth every cent in commission.