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SHOCKED? How much commission do real estate agents keep.

By Emilio DiSpirito, Realtor with DiSpirito Team at HomeSmart Professionals emilio@dispiritoteam.com

Real estate agents often get the persona of salespeople who rake in the money! We all know a real estate agent or two who drive a flashy car, live in a large home and sport the latest fashion trends and priciest outfits! So, what does it take to “ball out” when selling real estate? How much commission do these agents keep? You may be shocked!

First things, first! Let’s look at the median priced home in America being at approximately $310,000 according to the National Association of Realtors (August 2020). Now let’s take an expected commission rate of 6% of $310,000 ($18,600) to give us our total to start with, for our example.

Let’s take the $18,600 commission and show you bottom line what is left for your agent:

Keep in mind, many items here will change depending on agent, approach, business model and circumstance. We are using a generalized approach here off what we see on average.

Attracting Buyers Agents:

  • 3% (many times half of total fee) or $9,300 offered to a buyer’s agent as incentive to attract other agents to bring their buyers to your home.
  • Subtotal = $9,300 to agent

Brokerage Fees:

  • -$3,255 to brokerage. The average agent from our estimations coughs up 35% to their broker on each transaction.
  • Subtotal = $6,045

Basic Marketing and Transactional Expenses:

  • Professional Photos $350
  • Professional Video $150
  • Yard Sign Install $55
  • Printed Materials $50
  • Transaction Coordination $400
  • Subtotal = $5,040

Self-Employment Taxes:

  • 15.3%
  • Subtotal = $4,608

Other Expenses:

  • Federal Income tax
  • State Income tax
  • Health insurance
  • Office rent
  • Website
  • MLS dues
  • National Association of Realtor dues
  • Local Association of Realtor dues
  • Monthly brokerage fees
  • Zillow, Trulia, Realtor, Homes, etc. subscription fees
  • CRM
  • Various syndication subscriptions
  • Errors and omissions insurance
  • Social media marketing and ads
  • Google SEO
  • Print ads
  • Directional, yard and open house signs
  • Business cards and stationery
  • Listing brochures
  • Buyer and seller information packets
  • Media advertising
  • Vehicle milage, lease, maintenance
  • Cell phone/internet
  • Computer
  • Office supplies
  • Floor plans
  • 3D Walkthrough tours
  • Postcards
  • Etc.

The list carries on and on!

At the end of the day, real estate agents profit roughly 15% to 25% overall of the original $18,600, leaving them with an estimated whopping $2,790 to $4,650.

The next time an agent offers you a “discount” on commissions, ask yourself… when there is nothing in it for them… will they perform for me?

_____

Emilio DiSpirito

If you would have asked me what I wanted to be growing up, little Emilio would have told you “an archeologist” or “an architect” despite the fact that at age 8 I had my first lemonade stand, landscaping business and was recording my first “news show” on my boombox!  Well, I never was much good at trigonometry and did could not see myself traveling for months and possibly years at a time, so becoming an architect or archaeologist clearly did not happen!

Fast forward 26 years later and I’m running a team of the finest residential real estate professionals, own a media company and host my very own radio news show about real estate!

In September of 2017, I married my best friend, Jaclynn, and we have two wonderful children, Destinee and Emilio, V.  We have 3 dogs, one of which is a rescue and live in lovely Rhode Island. Jaclynn owns a high-end hair salon in addition to an on-location hair and makeup business!

For 7 years straight it seemed that I had put in more hours than the day had to give on my real estate business. 7 days a week, 14 to 16 hour days, without a break! Why? My friends and family did not understand the sheer magnitude of moving parts and services we offer to our clients during a transaction! One slip up or one missed call could mean make or break for someone’s dream home or even a lost deposit!

Running a team of like-minded, highly qualified and capable professionals has allowed me to offer a very streamlined, simplified and efficient approach to the sales process for our clients and allowed me to earn personal time again with my family while not missing a beat for my clients!

When I’m not working, I’m with my family, riding my mountain bike, eating at a number of local restaurants, enjoying live entertainment, hiking, skiing or reading!

Contact:  emiliodiv@gmail.com

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