A few weeks back, I started this little series on how real estate agents get paid. “Realtor Dirt: How I Get Paid (Buyer Side)” appeared here on Feb. 24 and now for the second part of this series.
Realtor Dirt: How I Get Paid for Selling a House
Compared to the buyer’s side, this is a lot more straight-forward.
The payment amount is established the day the listing contract is signed. The seller invites me into their home and we talk for a bit about their needs and desires from this transaction. And I tell them what I can do to help them and then we establish a “fee” for my services.
Usually this is a percentage of the sale price, or in some cases it is a set amount. Then we decide how much of that amount should be made available to the co-op (buyer’s) agent.
Then when the transaction is finished the agent gets paid.
For example, saying a 5% commission; 3% co-op and a $100,000 purchase price.
- Purchase Price: $100,000
- Commission: $5,000
- To Co-Op Agent: $3,000
- Selling Brokerage Amount: $2,000
Again here is another break-down of the money that is dictated by the agreement between the agent and the broker. In my case - as a relatively new agent - the split is 50/50. So in this situation, I’d earn $1,000 on the sale of this home.
If your household income is a combined $50,000 that translates to about $25 per hour. So I just worked your job for 40 hours — yet the Delaware County average days on market is 135 days.
Looking at it that way, for a little more than the price of an extra-value meal, you are listing your home with a professional Realtor. Granted, I’m just 1/5 of the cost of the transaction, but I think that on a daily basis I provide more than five-times the benefits of a Big Mac.
But then that’s just me.
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