In our current market, many people think that agents get rich off of seller commissions.
Today I’ll illustrate where those commission funds go during a real estate transaction.
For the sake of easy math, let’s imagine the commission fee is $1. Out of that $1, the traditional listing agent will give back half to the buyer’s agent. Of the 50 cents left, the agent will then give half to their broker.
This leaves the agent with just 25 cents left from the original commission. Out of that 25 cents, the agent is paying for their own health insurance, retirement fund, gas/insurance for their car, and self-employment tax.
For RE/MAX agents, that 25 cents is split up a little differently. This goes towards a monthly management fee, the costs of travel, marketing expenses, office rent, health insurance, signs/lockboxes, and more.
With all of the out-of-pocket expenses agents pay, there isn’t much of a profit left over after everything is said and done. It’s easy to see that agents like myself are in this business because we want to help you succeed with your real estate goals. It isn’t about the money—it’s about serving our clients.
If you have any other questions or would like more information, feel free to give me a call or send me an email. I look forward to hearing from you soon.