“Why are real estate fees to high? If you sell a house for $500,000 at 6%, then you’re making $30,000.”
***ANSWER:
Ah, I wish it was that simple, and profitable.
They typical real estate agent earns about 1-2% of the price when they sell a home.
Here are four the missing pieces of the puzzle:
1. Typically there are two agents in the transaction: the buyer’s and the seller’s agent. Listing agent commission now 3%.
2. That agent typically has to share around 25% of that commission with his broker and national firm. Listing agent commission now 2.25%
3. That agent of course has expenses for marketing, auto, pager, cell phone, dues, overhead, etc. Listing commission now about 1.5%
4. If the house doesn’t sell, the agent makes ZERO. Listing commission now -.5%!
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