Real Estate Commissons

A lot of people think Real Estate commissions are out of control! Think about it; a standard commission paid by someone selling their home is 6%. That means a $100,000 home would cost $6,000 to sell. A $300,000 would cost $18,000. A $500,000 would cost $30,000. That's a  lot of money!

Let's take a moment and look at where those commissions go:
1. Photographer - any decent agent is not going to take the pictures themselves. They will hire a professional photographer to get the job done right. The majority of buyers start their search online and good photographs make the difference.
2. Sign Fee - Yes the signs cost money and most agents have to pay for their signs. If they don't put them up themselves, they pay someone to put them up and take them down for them.
3. Transaction Coordinator - there are a lot of papers in a real estate purchase. These papers are to protect you. If you do a real estate purchase and there is less paperwork than when buying a car, you might be in trouble. A transaction coordinator makes sure all the paperwork is in order and copies go to the people that need them.
4. Transaction Fee - Brokerages often charge a basic transaction fee to the agent for essentially "legally" supervising the transaction. It's a base fee regardless of the size of the transaction.
5. Broker Split - A broker split is a % of the commission earned by the agent, paid to the broker for supervising the transaction.
6. Buyer's Agent - if the agent listing the home isn't the one that found the buyer, the commission is usually split between the two 50/50.
7. Lock Boxes - Supra boxes will actually keep track of who enters the home, when and how often. It is a good indicator to help in the sales process. You can also control the time people are allow to enter etc. It is an excellent tool and it is expensive.
8. MLS and Licensing Fees - here in Utah it costs about $2k to get your license. Every two years the license has to be renewed.
9. Business Expenses - many agents have to pay for all of their business and office supplies and expenses.

Don't think an agent on a $100,000 transaction will pocket $6k, or on a $500,000 transaction will pocket $30k. It's not going to happen. In fact, because of the costs a lot of agents won't take listings under $100k. Do what you want to pinch a penny, but I earn my commissions.

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