Quote:
Originally Posted by topfiverecords
What is the % range of commissions that go to the brokerage? What other types of fees and expenses are incurred by the realtor.
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Depends on the company. It can be as little as 0% with some brokerages that just charge a small monthly fee to the agent and can be upwards of about 30% to the brokerage at others.
A lot of them are tiered so the agent gives a certain % up to say $100,000 gross commission and then it drops after that.
If you're with an international brand, there's fees that go to the global company too.
Other fees are typically marketing stuff, ordering documents for strata properties, listing fees charged by the local real estate board, insurance we have to carry, print items, maybe staging, sometimes extraordinary marketing items like featuring the property in a magazine or things like that.
Then there's recurring fees like assistants, websites, signage, professional marketing materials (headshots, branding), office rental, CRM systems, maybe bus bench ads, mailers, complex accounting fees, subscriptions for things like docusign, dropbox, mailchimp, hootsuite.
These are not direct to any 1 client, but can be significant and become a large part of the expenses of the job.
I've had run rates over $20,000/month some years when a had a big team, and those costs are before any guaranteed sales.
I agree wholeheartedly that a lack of transparency is an issue in the industry.
Commission can be very high, but I think if clients are shown how much of these expenses some agents carry, it starts to look more reasonable.
Gross commission is not Net take home commission.
I think agents do a poor job of explaining these items to consumers and it comes off like they're taking a $10,000-$30,000 commission straight to their chequing account.
It really is running a small business and there's many expenses.
Sellers in particular should ask agents to break down some of their expenses, where the commission goes and make sure they're feeling value before hiring that agent.