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Originally Posted by 784caroline
I am no favorite friend of Real Estate Agents but Im not sure you really have a true understanding of RE Commissions. ON a $500,000 house say you pay 6% commission to sell thats $30,000. However the listing agent in most cases does not get that $30,000. Most homes are sold today through mutiple listing service so if another agency sells your house, immediately the $30K is split in half. Of the $15K on your agents side he/she has to split it with the Broker and depending upon the prior experience and sale history of your agent it could be 80/20 or even 60/40. Say its 80/20 then your agent will get 80% of the $15000 or $12,000. From that he/she has to buy advertising for your property which can mount up in cost depending upon how long the property is on the market. Some brokers make agents pay for everything like the FOR SALE sign that is posted in front of your house, the flyer that are printed up or the sales brochures that are on your DR table when prospective clients walk through the door. The professional Video of your property that is posted on the web sites such as realtor.com, and others all cost the broker money that comes out of the ($12000) commission.
When all the stars align where an agent sells his own listing, then he/she makes out GREAT but to be honest with you I would never want that job where you are always on call weekends, you can spend hours with a client and they simply call someone else to make the buy. When times are good, the job pays well, but in times like this you really do need a good agent and a good agent will earn his/her 5 of 6%.
OH and from what I have always been told you missed the Number 1 reason why a house sells..............LOCATION, LOCATION, LOCATION!!! Also to meet your goal of 120-160 days to sell a house, sellers must be realistic in setting the price of their house. This is easy to say, but when its you in the drivers seat few of us are willing to think our house that we lived in XX years is now worth only this amount. There are alot more lookers at $300-400K properties than $800- million homes. Today people need cash for down payments and again you are likely to have first time buyers who have been saving who have accumulated the downpayment whereas the buyer of the $800-million home most likely has a home to sell before they can buy yours unless they are foirtunate enough to be part of a corporate relocation program.
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Caroline, as a retired Real Estate Broker, I'd like to thank you for clarifying some of the misunderstandings about the massive amounts that real estate agents make. You have an excellent understanding of the way the "system" works.
If the real estate commission on a house is $12,000, normally the listing agent's office would get $6,000 and the selling agent's office would get $6,000. Depending on commission split within the office, it is quite possible that the listing agent will end up with $3,000 LESS expenses, which can be considerable. Gas, cell phone, signs, and a massive amount for color advertising. And for that amount, an agent gets to work nights, weekends and be on call 24/7. No company benefits, no pension, no pay for sick time or vacation.
Oh, and don't forget that many people insist on starting with a very high listing price .. the "we're not giving our house away" position. So an agent takes the listing in good faith, spends personal funds to promote it and advertise it. Then the owner becomes angry because it doesn't sell. So they cancel the listing, get a new agent, and lower the price. Trudy, I don't think you figured in the listings where the agent actually loses money!
I'm glad I'm retired from my 80 hour work weeks.