Let's Just Talk About It - Realtor Fees (aka Commissions)

First off, commission is a traditional word used for a fee earned based upon a sale price or a production met.

In Real Estate, the Seller traditionally pays a commission fee (here on in called fee because it's less letters to type) and the listing agent shares that with the buyers agent, also sometimes called the selling agent.

I've probably talked about this subject before, but it's worth talking about again now because some changes are coming on who knows how much who makes.

So, I've always loved numbers. I've always been interested in money. And, with my foot quickly placed in my mouth, I've, in the past, asked many people (of all different employment positions) 'How Much Do You Make?' And, that makes a lot of people uncomfortable. A lot. I got many looks, many people obviously felt it was none of my business. So, I stopped asking.....well, for the most part.

Now, if you ask me what I make, I'll tell you. For each house if you really want to know. How much my expenses are, what my net is, what I pay my broker, etc. I'm an open book.

In November the National Association of Realtors and the U.S. JUSTICE DEPARTMENT'S ANTI-TRUST DIVISION (yup, you read that right), came to an agreement that Buyers Agents fees offered will now be public. And, Redfin is apparently going to be the first disclosing what has normally been kept in just the agent confidential information section on our local MLS.

I'm not quite sure how I feel about that. I talked with my mom about it yesterday and said well, should an attorney, a mechanic, a teacher, a cookie maker, be forced to disclose how much money they make? See? 

I'll tell you one thing that will come up, buyers will be surprised how often Realtors do not get what would be considered a full fee paid. There are plenty. But, it is what it is. Whatever property my buyer is interested in, that's the one we go see.

When I am a buyers agent, I generally get 2.5% of the sale price. Before that even happens though, I've been paying desk fees to my broker on a monthly basis, MLS fees, lockbox fees, car maintenance/gas, advertising, insurance, all my own supplies, time too of course, a LOT of time....honestly, I'm sure I'm missing something because I have everything set to pay automatically. When I close a sale on a buyers side, I'm generally paying between 1 & 2k to my broker for Errors & Omissions insurance, Transaction fee, & an Administrative fee. Oh, and, yes, I pay an assistant to help with my files and provide a flash-drive to my clients at the end. Yup, everything costs money. All the cost of doing business.

So, again, not sure how I feel about it. I'm an open book, but not everyone is. I honestly don't believe that buyers think their agents work for free....see blue comments below.....but, you wanna know, just ask.

While the home seller knows that they have hired an agent on a contingency fee, a home buyer can sometimes be left in the dark, the Justice Department settlement contended. Federal antitrust lawyers charged the NAR with allowing buyer-side agents to misrepresent that their services are free, and enabled listings to be filtered based on commission fees.

In reaching the settlement, the NAR admitted no wrongdoing, and noted they were “not subject to any fines or any payments.”

Questions? Thoughts? I'd love to answer them and hear your thoughts!

~ Lauren@KeepYourWitz.com / (661) 313-5470 ~