Ahhhh…. yes. Money. It’s why you clicked! You want to know…. how do I get paid?
It isn’t hourly. isn’t salary. It isn’t a set amount. And, of course, it varies.
Let’s go over the basics…
I am either 1 of 3 agents….
- Buyer’s Agent– I represent you, the buyer, and assist you in finding a home, making offers, negotiating, mediating [and plenty more] in the purchase of your new home.
- Seller’s Agent– I represent you, the seller, and assist you in listing and selling your home. I handle the photographs, staging, signs, calls, showings, open houses, negotiating…. all things “House for Sale”.
- Dual Agent- Where I not only prep and list the home to sell, but I represent the buyer, also. This is not a realtor-favorite, because the slopes can get a bit slippery. When you promise your seller that you have their best interest at heart, but accept a dual agency… they often feel as if the representation is swayed in another direction. Would you want your agent to have your back, or everyone’s?
A buyer’s Agent…… I’m free! My advice and work for you is free.
Of the many things a Realtor does, this time it comes at a price. One thing that is negotiated during pre-listing is the commission paid to the real estate professionals involved in the transaction. (sellers/buyers agents) Sometimes it’s a set fee, 5.5-7%, and sometimes there are variable rates. (this gets confusing, ask me for details!) BUT, whatever the commission is… the buyer’s agent gets an automatic 2.4% commission out of that. In this case, the seller’s agent walks away with anywhere between 3.1-4.6% when the transaction closes.
Remember when we talked about being a dual agent? You get both sides of the commission, so in this case, the entire 5.5-7%. BUT…. you win some, you lose some. You lose the integrity of your Realtor name because you are representing both sides. It’s very hard to battle against yourself, while maintaining your loyalty…
[[[ As a buyer, your closing costs (explained in the CLOSING COSTS EXPLAINED blog) are usually $3,000+, so the last thing you need is to pay a commission. ]]]
** MATH EQUATION TO HELP ** The house is $250,000. I am representing the buyer, so my commission is what…? 2.4%. $6000 is my commission. Now… out of that $6,000 you have broker fees. Mine is 15%, so my take home is now… $5,100. Make sense?
[[ – LETS ALSO NOT FORGET TO MENTION HOW I FELT WHEN I GOT MY FIRST COMMISSION CHECK….. I literally cried. August 2017-]]
I have been working with 1 client since April. We are in the middle of a quadruple deal, and nothing has closed yet. We are hustling to get things done and contingencies removed, but things have just not been in my clients’ favor. I will be working for 6-8 months for free, until, and IF, the houses close. As of current, I am under water in this particular transaction. Travel expenses, storage units, window replacement, listing photos, and my time… have all added up to quite a bill and I have yet to pay myself.
This is what’s hard about my job. I love it. I am passionate about it and I have so much stinkin’ fun I hardly feel like it’s real life. BUT. This is the hardest part. Not knowing if and when I’ll get paid. Knowing I could lose money in a deal, such as this one currently. It is a gamble, and a scary one, at that.
“Everyday is a feeding frenzy and if you don’t kill, you don’t eat.”
Wishing luck to all of my realtor friends, and thanking all of you who continue to tune in.