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:

 

why do real estate agents make so much commission

Courtesy of Visual.ly

By |2018-10-09T17:00:05+00:00October 8th, 2018|

About the Author:

Jason Fox - Real Estate Marketing Business: We build WordPress Real Estate Websites with IDX Me: #GoHawks, #BringBackTheSonics, #MaybeNextYearMariners, #ILoveMyKids #SeattleSunLover #SeattleWaterLover #BFF Blog: Focuses on Wordpress Websites, Content Management, SEO Services, SEM Campaigns, Social Media Marketing, Email Marketing, Beautiful Design, IDX, and more.

3 Comments

  1. San Diego Real Estate February 22, 2013 at 5:31 am - Reply

    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.

  2. David the ghostwriter October 20, 2018 at 1:10 pm - Reply

    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?

    • jasonfox October 20, 2018 at 3:13 pm - Reply

      David, I could see the comparison. It is also an issue we run into with web development.

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