Do real estate brokers work for commission?

Answer 1

tax_man provides a clear, concise and accurate answer. as the broker owner of a real estate company with a ton of experience, to tell you the truth, the ONLY way that brokers and agents that list and sell real estate of any type via the commission that gets paid upon closing (settlement). it takes a long time, sometimes, for a deal to close.

sometimes a contract falls apart for reasons nobody could foresee. that means death, because that means you have to sell again to make any money AT ALL for the work you put out to make that deal. now you have to work twice, do two deals, one of which closes, just to make the money that you should have made for two deals.

i am certainly not chagrined or irritated. but i want to say the truth. most of the public does not know the truth. the truth is that not one penny of the expenses that agents and brokers put out, just to stay in business to help people meet their real estate needs and goals, is reimbursed to us as expenses of doing business. we are independent contractors. so, for example, i buy a form for you from the board. they charge me $0.10. i do not charge you for that form. nor would i charge you for a special sign for a large parcel that i listed from you. it may cost me $1,000, but i will not get that money from anyone at all. i rely upon selling your real estate in order to be reimbursed.

the public has no idea of the expenses and their costs that we must put out of our own pockets just to perform our business, which is only ONE THING:

real estate sales is just service, service, service for people, people, people who want location, location, location. that is all it is. we don't manufacture anything, we do not retail items, we do not do anything other than SERVE YOU, the public.

the best of the best people in this business are those that have stayed with THE PEOPLE for years on end. they didn't ever see the dollar signs of the commissions in front of them, they saw PEOPLE, people with needs and wants. so they undertook to serve them, to give them 100% of their energies and time necessary to sell their parcels or to guide them through the purchasing process.

the reason the public has a jaded opinion of real estate salespeople or brokers is:

1. they think that people buy and sell real estate as often as they go to the grocer's to buy a loaf of bread.

2. they have no idea of how markets affect whether we live or die in any given year, yet we push on until we really do die.

3. some agents make the mistake of projecting themselves as ten godzillion a year earners, what with 10 phone and fax numbers, clothing from saks, brand new porsches, of course including yet another telephone, do dads like gps's, when they all know the hoods by the back of their hand, so they really don't need them. but behind that facade are many that are being sued by their condo association for failure to pay assessments. okay, when they close a deal, they pay, so they keep themselves out of court, but the condo suffers and hates them.

just know that we have professional fees, multiple listing fees, desk fees, personal assistants salaries (if we make enough or share one just for a facade), our share of advertising expenses--one of the highest costs of the industry, signage fees, anything else that the company does not provide, like that $0.10 form, or paying for your lunch, auto expenses, errors and omissions insurance premiums, higher than normal limits of insurance on our cars to drive you around, blah, blah, blah.

did i personally ever care? no, not me. i spent many thousands in my career going all over the country to attain knowledge that was strictly to help my clients.

the question is this: how fast do they throw out my business card or forget my name, and even my face, after i close them? that shouldn't happen to the good ones that work for you. you should reward them by sending them your friends. you should go to them when you sell, first, because they worked so hard for you. and i do mean that: in residential, we are usually up at the crack of dawn (i am), with my coffee, strategizing, like playing chess, what moves are available for you to make and what the other guy might do given any of them. then it's off to the office to catch up. then it's out to open houses. then it's back in the office to make our calls, to engender business. then it's out at night, when most purchasers have the time to look.

so kindly spread the word. and if you are thinking of becoming an agent, write to me at the address provided on my profile to give me a means to answer a specific question pertaining to your goals.

whatever your reason of asking, please do not hold it against us that we too have families to raise and food to put on the table--in other words, that we too have a life.

be well in all your endeavors.

Answer 2

sort of. real estate agents work for real estate brokers. you could be both the broker and the agent, as is the case with many mom and pop companies.

agents meet with clients and negotiate commissions. these commissions are paid to the broker at settlement, who then pays the agent the agreed upon percentage. at some brokerages, this split may be 50/50, or 60/40, or whatever is agreed upon, while other brokerages (remax) charge desk fees (monthly dues) to the agents in exchange for a higher (up to 100%) split.

let's say you're an agent, and you negotiate a typical 6% commission with your client to list their house. let's also say that the buyer is working with a different agent (a buyer's agent). the house sells for $200,000, so the commission is $12,000, total. this commission would first be split between the buyer's and the listing agent's brokers, $6,000 each. each broker would then pay their agent the agreed upon split, say 50/50, so $3,000 to each agent and each broker. the broker uses the money to pay for the office overhead and the agent uses it to pay for the costs of selling the house, plus profit.

so, brokers are managers, and essentially are paid either via desk fees or via commission when their agents are productive.

Answer 3

yes, they do work for commission. everything is based on commission in real estate business.

Answer 4

Yes, their percentage is based on experience and the broker that they work for.

Answer 5

Yes, they usually do. In my area the going rate is between 6 & 7% of the selling price of the home.

Answer 6

You forgot the Seller's Closing expenses.