By Kay McArdle/kaymcardle.com
Generally the public doesn’t know just how our business works and exactly how we do get paid. And I think sometimes people think we make a lot of money for a little work. I myself was surprised when I became an agent nine years ago with how hard we all work 24/7 and how many expenses we have as independent contractors. But, I love being a real estate agent helping people find a wonderful place to live and like most other agents, wouldn’t trade the job for any other.
So let me take a step back and explain just how we are employed. After taking a number of state required real estate courses, we sign agreements to work with a real estate company as an independent contractor ….not as an employee. We are not paid hourly to show clients homes, do open houses, stay up-to-date on current law and practices through required continuing education or to stay on top of market values and trends. Which we all happily do because this makes us more successful. But, we are only paid if we are part of a closed real estate transaction.
Typically, the seller pays the commission and the buyer has no direct cost for their agent’s services and representation. The commission is then split 4 ways between the 2 real estate companies and the 2 agents involved in the sale. It isn’t an equal 4 way split, but generally the listing side retains more of the commission and each agent will have a certain split with their company dependant upon their productivity and company policies.
The seller commission is negotiable, but the services that will be included in the listing may vary greatly. The marketing may only include listing the home on the local MLS or it may provide a video tour, syndication to multiple real estate websites, be featured in an agent blog and Facebook page, be listed in local print media and have the agent hold Open Houses. Agents and their companies have may also have good systems in place to make sure all inquiries about the home are handled promptly and that the transaction from negotiations through inspections and closing are handled smoothly for the client. The co-broke, which is the part of the commission that goes to the agent and broker representing the buyer, can vary and does serve as an incentive for other agents to show the home. Agents can differ on how and how frequently they communicate with clients with showing feedback; on market changes and trends; updates on new comparable listings; homes going into pending status and sales; and suggestions to continue to prepare the home to make it more appealing and marketable.
From the commission earned from a transaction, agents are responsible for a number of small business owner costs:
Car related expenses
Marketing and Advertising
Errors and Omissions Insurance
Multiple Listing Dues
State of Ohio Realtor Licensing Fees
Website Maintenance Costs
Accounting Fees
As one agent in our company says, we are one of the few professions that work with the hope of getting paid. Although Welles Bowen doesn’t often use Buyer Agent Contracts which guarantee a certain commission to the buyer’s agent, we do so appreciate when clients work exclusively with us and not hop from agent to agent.
Kay McArdle, Realtor
Office: 419-535-0011
Cell: 419-654-0059
Fax: 419 535-7571
VM: 419-539-2700 ext. 102
kaymcardle@wellesbowen.com
You can find Kay’s website by clicking here.
