Average Realtor Commission

[Ashley Mikulik]

Can anyone give me an idea of how much the average Realtor makes in commission for a property?

(I know it depends on how much the property sells for... but can you guys give me an approximate % of sale price or dollar value?)

[Franklin Lee]

My mother, who is a real estate agent, made 2.1 million during 2006 which was a good year. She was definitely a top realtor in the area and probably number one.

I would say between 5 - 9 % is the average for each house.

[Account Closed]

In Tucson AZ, the ones I've been talking to recently--over the last several months-- want 6% and more on a SFR.
If there is to be more than one transaction (sell, then purchase) a few will consider dropping .25 or .5 but not much more. Here, it's not regulated by state law.
For sales, many agents have been insisting on 6 mo to year listing agreements, but are willing to negotiate somewhat.
ofgift

[Jon Holdman]

6% seems customary. That gets split between buyers agent and sellers agent then each agent gives their broker some split.

[Chris Jacob]

In Maryland, many of the realtors that I talk to have been asking 6%, however as the times have gotten tougher for some, a few are starting to be very negotiable, accepting 4-5% (buyer and seller agent together)

[Josh Green]

Originally posted by Nebulus Lee:
My mother, who is a real estate agent, made 2.1 million during 2006 which was a good year. She was definitely a top realtor in the area and probably number one.

how did she do in 2008?

[Mark Yuschak]

6% is customary for the collective amount of commissions paid. That amount is typically split equally between the buyer and seller's agent broker. From there, it's whatever split the agent has with his/her broker, if any.

In Michigan, I've actually seen the contrary with commissions. The wise sellers are offering higher commissions to help their listing stand out from the thousands currently in the MLS.

[Franklin Lee]

Originally posted by Josh Green:

Originally posted by Nebulus Lee:
My mother, who is a real estate agent, made 2.1 million during 2006 which was a good year. She was definitely a top realtor in the area and probably number one.

how did she do in 2008?

I'm sorry...it was 4 mil in 2006 and 2.1 in 2007. 2008, she was barely surviving this market but I don't know the exact figures for it. I'll look for it on the newspaper the next few weeks.

[Jon Holdman]

Made $4 million, or sold $4 million worth of properties? Assuming a four way comission split, with a net of 1.5% to each person, that means she sold something like $266 million in property. Even with million dollar properties, that's very impressive. That's one every work day.

[Franklin Lee]

Originally posted by Jon Holdman:
Made $4 million, or sold $4 million worth of properties? Assuming a four way comission split, with a net of 1.5% to each person, that means she sold something like $266 million in property. Even with million dollar properties, that's very impressive. That's one every work day.

No, I meant she sold 4 mil of properties. Hope to clarify that for you.

[J Scott]

Originally posted by Jon Holdman:
Assuming a four way comission split, with a net of 1.5% to each person...

Just for reference (my wife is an agent for the purpose of handling our real estate investments), the typical agent will keep between 2.0% and 2.9% of their 3% commission, even after paying their broker.

Most major brokerages take 30% or less of the commission, and some take much less (my wife's brokerage, which has several thousand agents, only gets $40 per transaction).

Of course, there are desk fees, MLS fees, NAR fees, etc, but they can be pretty minimal as well if you're generating lots of transactions.

So, if you shop around, you can keep a good bit our your commission...

[Ashley Mikulik]

Wow. thanks for all the input. I had no idea I would get so many people participating in this discussion.

You have all been a huge help! Thanks again!!

[Bill Gulley]

Customary commission in my area is 6%, 3 to the listing agent and 3 to the selling agent. Agents split commission with the broker responsible for them. That can be zero with a big selling/listing agent with actual flat fees paid, like 20K or what ever to 50% for beginning agents. Commonly in my area the agent split is 20/25% to the broker.

As pointed out, you'll have other expenses, Realtor dues, continuing education and your own business expenses...cards, flyers, adertising expenses, gas, auto, and office expenses, copiers, coffee fund and little things that they can dream up...etc.

Many net about 65 to 70% of the commission, lucky to hit 50% with all expenses, not counting advertsing, which is a variable cost with a listing. SOme brokers provide ads, some make you pay something, some have you pay it all.

In your area, look at the median home price as a basis, assume 6% and look at half of that as income, IMO. You need to sell a million to make a living, IMO.

[Kevin C.]

You'll need to sell multi-millions to make a decent living.

Assume you net out 2% of all your sales, with one million in sales, that gets you 20K - not much of a living there.

[Bryan Balk]

I'm an agent and very surprised that agents are still getting 6% to split. In Chicago the market has pushed Realtors down to 5%. We offer huge bonuses to Realtors to get them into our homes. 5K bonuses on houses worth anywhere from 150-100k. This really gets the Realtors to show the property when there looking at a 7%+ commission just on there side. Obviously were flippers and Realtors so we don't pay a selling commission which helps us offer these huge rips. But buying agents are a huge resource that you can't get cheap on.

[J Scott]

Originally posted by Bryan Balk:
We offer huge bonuses to Realtors to get them into our homes. 5K bonuses on houses worth anywhere from 150-100k. This really gets the Realtors to show the property when there looking at a 7%+ commission just on there side.

We do the same thing. On a typical $120K resale, we'll offer the selling agent 3% + $1500, which gets agents in this price range VERY excited...

Like you said, Buyer's Agents are worth every penny and not someplace you should skimp...