Why Do Real Estate Agents Make So Much Commission? [Infographic]
Why Do Real Estate Agents Make So Much Commission?
They Don’t!
According to this infographic.
The 1 line in the closing documents that we would love to remove, the Agent Commission. The thinking goes something like this, “$6,000 commission for what? I could have put a sign out in the front yard!”
I do think that the author of this graph is a little bit biased toward the Real Estate Agent, however it does a great job of helping us understand why the commission structure is what it is. The illusion that the Listing Agent simply puts a sign in the front yard and makes a couple fliers just is not accurate.
I don’t know about you but I am ok with paying a Real Estate Agent $29 an hour to sell my house.
Costs You May Not Have Thought Of:
- Brokerage Fees
- Marketing Costs (trust me this is more than you would think)
- Operating Expenses
- Training and Licensing
- Taxes
- Certifications
- Time Spent (Communication, Presentations, Open Houses, Showing, Monitoring Showing Feedback, Inspections, Analyzing Comparables, Transaction Handling, Title and Escrow)
- Negotiating
*I am a real estate broker
Enjoy the “Why Do Real Estate Agents Make So Much Commission” Infographic:
Courtesy of Visual.ly
post contents
Why Do Real Estate Agents Make So Much Commission?
They Don’t!
According to this infographic.
The 1 line in the closing documents that we would love to remove, the Agent Commission. The thinking goes something like this, “$6,000 commission for what? I could have put a sign out in the front yard!”
I do think that the author of this graph is a little bit biased toward the Real Estate Agent, however it does a great job of helping us understand why the commission structure is what it is. The illusion that the Listing Agent simply puts a sign in the front yard and makes a couple fliers just is not accurate.
I don’t know about you but I am ok with paying a Real Estate Agent $29 an hour to sell my house.
Costs You May Not Have Thought Of:
- Brokerage Fees
- Marketing Costs (trust me this is more than you would think)
- Operating Expenses
- Training and Licensing
- Taxes
- Certifications
- Time Spent (Communication, Presentations, Open Houses, Showing, Monitoring Showing Feedback, Inspections, Analyzing Comparables, Transaction Handling, Title and Escrow)
- Negotiating
*I am a real estate broker
Enjoy the “Why Do Real Estate Agents Make So Much Commission” Infographic:
Courtesy of Visual.ly
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Written by : jasonfox
Jason Fox - Real Estate Marketing
Business: We build WordPress Real Estate Websites with IDX
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A real estate agent is a professional and knows more than you do about buying and selling properties. It’s what he/she was trained to do. So by hiring one you would get access to all that information and experience. So unless you think you can learn everything about real estate without effort before you selling or buying your home, it would be much easier to simply hire a professional.
It’s a lot of work to be a real estate agent, and people don’t realize how much. Real estate agents do well for themselves, but they won’t get rich selling “average” homes (except maybe in Vancouver or Toronto).
I get the same reaction from prospects when they want us to write a book for $2,000 or $3,000. That would be less than minimum wage , considering how labour-intensive it is.
In the end, it boils down to two questions:
Can I do it myself, and well enough to be satisfied?
Which is scarcer: time or money?
David, I could see the comparison. It is also an issue we run into with web development.
Thank you for sharing this insightful post! It really sheds light on the true value and behind-the-scenes work of real estate agents. Many people don’t realize the time, effort, and expenses involved in the process. From marketing to negotiations, the value of a real estate agent’s expertise and hard work becomes clear. I completely agree — paying a fair commission for the service provided is definitely worth it for the peace of mind and expertise they bring to the table.
Thank you