Tuesday, May 09, 2006

Agents - Tell Us Where Your Commissions Go

I know that agent-bashing is a pretty common sport on this blog. It's obvious that most readers don't hold agents in high regard. One of the reasons for it, I think, is that they believe that the dollar amount of agent commissions is higher than their work warrants.

So agents, here is your chance to let us know what happens to your commission. Where every penny of your commission goes, starting from the sale and ending as dollars in your pocket.

This is going to open the eyes of many readers that are not familiar with the commission structure of most real estate agencies and franchises. While you are free to post under your handle or sign your replies, I'd suggest that you answer anonymously.

A big thank you goes out to those who helped me understand the commission structure as well as compile this survey.

- Are you contracted/employed by a traditional broker or discount broker?

- How many years have you been in the business?

- What real estate company do you currently work for?

- What is your current commission split with your broker?

- What was your split when you started as a new agent?

- Are there franchise fees charged in addition to the broker split?

- Does the broker charge additional fees for company generated leads?

- Are you charged a desk fee?

- Are you charged for office supplies?

- Are you charged for business calls?

- Are there any other miscellaneous fees/expenses?

- How much does your typical ad campaign cost for a home you have listed?

- What percentage of advertising for home sellers does your company cover?

- Who pays for the costs of brochures/flyers/handouts, agent or company?

- Who pays for signs and business cards, agent or company?

- Are you reimbursed for any expenses?

- Does your broker contribute to travel expenses for handling buyers?

- Who pays for your errors and omissions insurance, agent or company?

- Who pays for your local board memberships and license fees?

- Who pays for continuing education if you decide to pursue another designation?

- Are there situations where your commission split is penalized?

- Are there any financial incentives to selling an “in house” listing?

- Are there any financial incentives to sit an Open House?

- Are there any financial incentives to market other services within your company such as mortgage, title, home owners insurance, or selling a product such as a home warranty?

- What does your broker do with their side of the commission split other than paying for operating expenses?

- Is there a mandatory or expected commission charged within your company to home sellers?

Caveat Emptor!
Grim

22 Comments:

Blogger Metroplexual said...

I hate to open the dialogue up, but when I last sold the agent who is a friend of my wife said the commission was going directly to her dues. Which in my opinion seemed onerous.

5/09/2006 07:50:00 PM  
Anonymous Anonymous said...

Grim;

what about this listing?

2272932

Are there obvious problems with this house, how long it has been on the market? price reductions?

isn't it a little less pricy compared to other warren listings?

5/09/2006 09:05:00 PM  
Anonymous Anonymous said...

and this one?

2254157

5/09/2006 09:06:00 PM  
Blogger rymingrealtor said...

Are you contracted/employed by a traditional broker or discount broker?
Traditional

- How many years have you been in the business?
4

- What real estate company do you currently work for?
A Small local company

- What is your current commission split with your broker?
50- 50

- What was your split when you started as a new agent?
same

- Are there franchise fees charged in addition to the broker split?
No

- Does the broker charge additional fees for company generated leads?

No
- Are you charged a desk fee?
No


- Are you charged for office supplies?

No
- Are you charged for business calls?
No

- Are there any other miscellaneous fees/expenses?
E & O insurance

- How much does your typical ad campaign cost for a home you have listed?
It is totally paid for by the broker, the only expenses I incur are whatever I do at home print flyers listings etc.

- What percentage of advertising for home sellers does your company cover?
ALl of it - unless it is in a town that is not one of the areas we advertise in, then the agent place there own ads.

- Who pays for the costs of brochures/flyers/handouts, agent or company?
If done at the office, its paid for by the broker, if done at home for my own convenience then I pay

- Who pays for signs and business cards, agent or company?

I pay for cards broker pays for all signs

- Are you reimbursed for any
expenses?
My expenses are tax deductible

- Does your broker contribute to travel expenses for handling buyers?
No

- Who pays for your errors and omissions insurance, agent or company?
I do - Agent

- Who pays for your local board memberships and license fees?
I do - Agent

- Who pays for continuing education if you decide to pursue another designation?

I do - Agent

- Are there situations where your commission split is penalized?
No

- Are there any financial incentives to selling an “in house” listing?
No

- Are there any financial incentives to sit an Open House?

No- if the house is sold you get the sale, you can also get customers.
- Are there any financial incentives to market other services within your company such as mortgage, title, home owners insurance, or selling a product such as a home warranty?
No

- What does your broker do with their side of the commission split other than paying for operating expenses?
??? Other than operating expenses why would I know? That would be her salary?

- Is there a mandatory or expected commission charged within your company to home sellers?
No - All commissions are negotiable - we do not charge less than 4% and rarely more than 5%

KL

5/09/2006 09:15:00 PM  
Anonymous UnRealtor said...

My beef with realtors is not necessarily their commission, but that can get in the way of a deal.

Once you see the look in the eyes of a greedy listing agent, willing to sell out the owner in a second, you know you can get a better deal on your own.

For someone listing a house for sale, it probably makes sense to use a listing agent, but tell them NOTHING, they are not your friends, and will sell you out in a heartbeat.

(Now, our RhymingRealtor is obviously not like these greedy agents, but he/she seems to be the exception.)

5/09/2006 09:32:00 PM  
Blogger Grim Ghost said...

2272932 -- it has a septic tank, well water and there is a driveway easement.

2254157 -- not that cheap, and it has a sewage easement. [ Those can cut through the middle of the plot, reducing the valley of the land greatly]

5/09/2006 09:51:00 PM  
Anonymous UnRealtor said...

Does a "sewer easement" mean you can't build on top of it, or that if you do build on top of it, they can destroy your house to get access?

The latter is slightly better, if you're willing to take the risk, but I'm not sure which scenario is correct.

5/09/2006 10:30:00 PM  
Anonymous Anonymous said...

Also as a broker you are not provided with health insurance.
You have to secure that on your own, and as we all know, that can get quite expensive.

AND let's get another thing straight...commission is also split with the other broker. So if the commission is 5% (typical these days). 2.5% goes to the listing agent and 2.5% to the buying agent.
Then, of that 2.5%, each gives 1.25% to their brokerage...so each broker ends up with 1.25%.

And, of course, since you are self employed, don't forget the taxes - esp the self employment tax, which is quite heavy.

5/09/2006 10:31:00 PM  
Anonymous Anonymous said...

Anyone interested in a $900,000 condo?

http://www.realtor.com/Prop/1059225205

5/10/2006 12:41:00 AM  
Blogger minutesfromNYC said...

I have my real estate license, but I only got it because of unethical realtors I have dealt with in the past. I have a "day job" and a steady source of income :D

5/10/2006 06:43:00 AM  
Anonymous Anonymous said...

- Are you contracted/employed by a traditional broker or discount broker?

Traditional broker

- How many years have you been in the business?
4

- What real estate company do you currently work for?
Weichert

- What is your current commission split with your broker?
*supposed* to be 70 agent /30 company

- What was your split when you started as a new agent?
50/50

- Are there franchise fees charged in addition to the broker split?
4% fee
(makes the above two really today 66agent/34company and 46 agent/64 company

- Does the broker charge additional fees for company generated leads?
If we except a company generated lead we pay 35% referral fee, then the 4% franchise fee, then the remaining gets split 50/50 (regardless of what your cut is supposed to be) works out to really getting a 30 agent /70 company split


- Are you charged a desk fee?
no

- Are you charged for office supplies?

no

- Are you charged for business calls?

no

- Are there any other miscellaneous fees/expenses?

yes - theres a mandatory fee for company designed listing presentations, mailings, client follow up cards, and even uploading pictures for mls
-health insurance is out of pocket

- How much does your typical ad campaign cost for a home you have listed?
When it was a fast market little advertising was needed. Now that the market is slowing advertising expenses are increasing, one quarter page ad is a couple hundred bucks.

- What percentage of advertising for home sellers does your company cover?
Next to none - only company paid print advertising is done if seller will hold an open house or if it appears in the home guide they publish

- Who pays for the costs of brochures/flyers/handouts, agent or company?
agent pays company tech 25 bucks for every 25 copies

- Who pays for signs and business cards, agent or company?
agent

- Are you reimbursed for any expenses?
we are offered a small matched marketing amount

- Does your broker contribute to travel expenses for handling buyers?
no

- Who pays for your errors and omissions insurance, agent or company?
agent

- Who pays for your local board memberships and license fees?

agent

- Who pays for continuing education if you decide to pursue another designation?
agent

- Are there situations where your commission split is penalized?
yes- there's an admistration fee of $150 that if waved for client comes out of agent's pay
- if agent reduces their commission during the transaction the sale is not counted towards agent production -

- Are there any financial incentives to selling an “in house” listing?
no

- Are there any financial incentives to sit an Open House?
no, just possibility of new clients

- Are there any financial incentives to market other services within your company such as mortgage, title, home owners insurance, or selling a product such as a home warranty?
no

- What does your broker do with their side of the commission split other than paying for operating expenses?
It's not put towards print advertising for home sellers, or incentives for buyers or sellers since that's illegal in NJ. Since most of the marketing expenses come out of agent's pay, I guess that leaves some rather large paychecks

- Is there a mandatory or expected commission charged within your company to home sellers?
yes - need permission to go below 6%

5/10/2006 06:45:00 AM  
Anonymous Anonymous said...

Everyday it is relentless Housing Inventories Piling Up

5/10/2006 28,660 houses for sale

5/9/2006 28,587 houses for sale

5/8/2006 28,471 houses for sale

Relentless.
And this does not include FSBO. WOW!

BOYCOTT HOUSES!!!

Booooyaaaaaaaaa!

Bob

5/10/2006 07:06:00 AM  
Anonymous Anonymous said...

GSML Listings going up Everyday!

BOYCOTT HOUSES!

Insultingly Overpriced.

Boooooooyaaaaaaaa

Bob

5/10/2006 07:08:00 AM  
Anonymous Anonymous said...

is there a way to ban bob?

5/10/2006 07:12:00 AM  
Anonymous Anonymous said...

"A full 29% of people who took out mortgages or refinanced in 2005 have no equity or negative equity in their homes, according to Christopher Cagan of First American Real Estate Solutions, a data provider"

Be a fool buy a house at the top.

BOYCOTT HOUSES!

Boooooooyaaaaaaaa

Bob

5/10/2006 07:13:00 AM  
Blogger grim said...

Let's keep this thread focused on the questions I asked.

Please, no replies here unless you are an agent responding to the survey.

grim

5/10/2006 07:25:00 AM  
Blogger rymingrealtor said...

To Anon 7:45 Am

Thanks I'm glad I work for my local broker! I was enterntaining working for a big name... no thanks

KL

5/10/2006 07:53:00 AM  
Anonymous Anonymous said...

Why would ANYONE want to work at Weichert? They sound horrible.

5/10/2006 08:54:00 AM  
Blogger PN said...

It always seemed to me that RE commissions should use a sliding scale.

For example, 6% of the first $200,000, 5% of the next $200,000, etc

Does anyone use this kind of fee arrangement?

5/10/2006 09:32:00 AM  
Anonymous Anonymous said...

BOYCOTT GAS!

Insultingly Overpriced.

Boooooooyaaaaaaaa

Bob

5/10/2006 10:18:00 AM  
Anonymous Anonymous said...

Now, now...if you do have a paying job, please tell me how much you make per year/week/day/hour. Also disclose what you bring into the business that cuts you a check and what percentage of that you make. Unless you are someone, like the great majority out there, who gets paid regardless of what happens in the marketplace, their earnings not directly tied to their performance, having a Big Brother carry them from the craddle to the grave. How very, very grim...

5/10/2006 02:23:00 PM  
Anonymous Anonymous said...

For someone listing a house for sale, it probably makes sense to use a listing agent, but tell them NOTHING, they are not your friends, and will sell you out in a heartbeat.
........No kidding - Our "friend" sold our home, brought in a buyer we 1st suggested may be interested in offering it to. He talked us out of doing that, did not tell us about an exclusion. The day he had the listing he brought our potential buyer over. He told them our personal information, presented a low offer and expected full 6% commission.
He is a complete snake, and is partial owner of his office in Sea Girt.

5/10/2006 09:49:00 PM  

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