1. When you work for a brokerage you have to split that commission with the brokerage. Sometimes that split is 70/30 or 80/20. So right off the bat 20% of your paycheck goes to your brokerage where you hang your hat.
2. Then you have to pay Error and Omission Insurance. Average is $30.00 PER DEAL.
3. Then if you are responsible you take out 28% for Taxes and set that aside to pay Uncle Sam.
4. Then if you work for a large national brokerage they usually have MONTHLY FEES, DESK FEES, COPY FEES, and those can be varied. So lets say $100 per month. (NOT PER DEAL PER MONTH)
5. Then all the Gas and Wear and Tear on your personal vehicle, reimburse yourself for that.
6. Then National Association of Realtor Dues, MLS Dues, CE Classes (Average $120 a month)
7. Then your marketing that you want to do, so you can get a future listing or buyer. ($300.00)
The average commission for a Realtor on the Buyer's side is about $7500.00.
7500.00
-2550.00 Brokerage
-30.00 E&O Insurance
-2100.00 for taxes
-200.00 Monthly Dues for Having a Desk and being affiliated with big name brokerage
-250.00 Gas Money and wear and tear
-240.00 Dues / Licencing / CE Classes
What is left at the End of the Day $1830.00
Most Realtors give their clients a Thank you / Housewarming Gift of some amount. No more than $100.00
Then if any other agents helped them with the deal it is customary to give them 30% up front so by the time is all said and done, you probably walk away with $500 in your pocket.
Then if you are a Realtor like me you Discount the Listing Side. I make $1477.50 AFTER the house sells. And there is still expenses after that.
Do not Discount My Livelyhood and what I do.
1. I am assuming all the RISK when I take on your house as a listing.
2. I do not have Paid Time Off (PTO) or Sick Days. If I do not work, I won't get paid.
3. My time management is key. When you are working with Several Buyers and Sellers you will be lucky if you get any sleep.
4. Vacation? HA! If I do not have my lap top with me on Vacation I am out of business. I actually wrote up a contract early in the morning on a long awaited Vacation for Buyers and submitted it. I book my Hotels on the Wifi Connection and feedback of the same because I need to be able to communicate with my clients when I am trying to get some Rest and Relaxation.
5. My Employer is me, my perks and benefits are supplied by me. Sure I get to have lunch with my Power team once in a while, and go to social functions but what I really want is Life Insurance/ Paid Vacation/ Paid time off/ Flex Spending and a 401K with a Match. But this is the profession I chose to do because I love it. And I have to pay for those things too.
But when people discount what Realtors do they really do not know all we go through, and deal with on a daily basis. We can spend weeks with a client or years with a client. We run the risk of losing that client to another agent because of someone we trusted helping a buddy of theirs. Thus taking that paycheck away from me. Yes this happens. But when an agent has a buyer they have spent time getting that buyer ready, learning their wants and needs, hunting for the home, putting in offer after offer and helping them deal with the rejection. It is fun to be a cheerleader for first time home buyers and experienced home buyers. But it is exhausting and rewarding at the same time.
I love what I do, but I am not the uber successful agents on HGTV with my own show. I am just a woman who loves to teach and guide people through the process, look out for them, protect them and given the opportunity represent them to the best of my ability and get them top dollar for their home or find them the home of their dreams in their price range.
IT IS WORTH IT, but do not Discount what I do. And my Goal for 2015 is the same as 2014.
