Commission tends to be a dirty word, so I will try to clean it up a little bit here. I am always amazed at how people think commission works, but I am going to give it to you straight…. at least as straight as I can, because Real Estate offices are changing their models somewhat.
In a typical office……… New Traditions Realty is what I would consider a typical/traditional office.
If I or any one of our Realtors would list your home, and we charged a 6% commission (this can be negotiable as well) on the sales price, a $200,000 priced home would be charged $12,000 in commission. The listing side of the transaction would typically receive 3% of the 6%, and the buyer’s agent (his/her brokerage) would receive the remaining 3%. Once the brokerage receives the commission after closing, it is split between the brokerage and the agent. I know that no one likes paying commission, and it does seem like a lot of money when a home is listed. It is. Realtors, however, do work as independent contractors, so they pay their own social security taxes, health insurance, and have no benefits. When they receive their portion of the commission, they still have many expenses to pay.
That is a very short explanation of how it works, and as I mentioned, some brokerages are going in to different models and developing different options for agents. If you would like more detail than this short description, let me know – my door is always open.
Real Estate looks like a lot of fun to people, and it is!! I enjoy about 95% of it, but it is certainly not an easy job. A good Realtor will go thru all the ups and downs of the process with you, and try to make your experience the best it can be. The truth is, it takes a lot of steps to get to the end result and have a happy and satisfied client. THAT IS ALWAYS OUR GOAL!
Thanks for your continued support!