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Dutchess_III's avatar

How much is the "house take" on commissions a Realtor makes?

Asked by Dutchess_III (42442points) January 21st, 2016

I’m going to be jumping through hoops to get my Realtor’s license beginning in February. I will be working with an established Realtor under his company.
He said that for all Realtors the “house take” is normally 50% of the commissions.
Does this sound right?

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15 Answers

Dutchess_III's avatar

That’s exactly what I was looking for. Thank you!
So it reads 60/40. But the graph is blurry. What was that 6% $200 at the bottom of both sides?

chyna's avatar

A friend of mine took the test and had to study for a few weeks to take it and that cost her around $75.00 and the license was around 300.00. There were a lot of start up costs that she wasn’t aware of too like signs, business cards, advertising. Be sure you are clear on all the costs before you jump in.
The commission was not going to be much once it was split with her company and the other agent. So commissions here are 7%. The listing agent gets 3.5 and the company you work for could take half of your 3.5%. Make sure you are clear on this also before you get too invested.

LuckyGuy's avatar

@Dutchess_III Maybe this image is more clear. In their example the $200 on both sides goes to the respective franchises.

Dutchess_III's avatar

Much better @LuckyGuy. thanks. I am the buyer’s / seller’s agent, correct? So I should get 60%. The broker, who is, I assume, the guy I’m working for gets 40%, and out of that he has to pay 6% to the franchise. Am I reading this right? Or do I have it backward.

Cruiser's avatar

Here in Chicago area the split is usually 50/50…50% to the company/broker and 50% to the agent. I have also seen brokers who are sales agents for a company and top selling agents negotiate a higher split. I have seen commissions be as high as 6% but the norm is hovering at 5%. I have also seen no frills listing with MLS agencies as low as 3% but you pretty much only get an online MLS listing and that is it and you have to host all the showings on your own. You will also see reduced commissions sometimes negotiated with previous FISBO sellers. There are some companies where Brokers will work for a franchise like REMax and they get to keep all of the commissions minus a percent franchise fee I think that is around 10%

In @LuckyGuy‘s flow chart the Company/Broker gets the 40% minus the franchise fee and the agent get 60%

jca's avatar

@Dutchess_III: If you click on the image, it will be clearer.

Dutchess_III's avatar

I got it @jca. Thanks.

So I was reading it right. So 50/50 is about the norm. Thanks for the info @Cruiser. Very useful.

Thank you all.

Cruiser's avatar

@Dutchess_III I had a Realtor license for 12 years and a Brokers license for 10. Both my parents were Realtors and my mom worked as a residential ReMax Broker for 40 years and was quite successful at it. If you ever have any questions feel free to ask.

zenvelo's avatar

In California, the Commission on the sale is generally 6%. The buyer’s agent gets 3% and teh seller’s agent gets 3%. Out of that 3%, they pay a share to the office.

The office’s share is negotiated between the Agent and the office, because some agents bring in a lot of sellers that attract buyers to the firm. The couple I had that sold my house could almost open their own office, but liked the affiliation with a known quality office in the area. They averaged selling over 3 houses a month.

Dutchess_III's avatar

I will remember that Cruiser! And I’m sure that I will have questions. Thank you.

Thanks @zenvelo. It’s 6% here too.

Judi's avatar

I have some realtor friends that just pay desk rent to the Broker. It’s high (about $2500 a month when we talked about it 10 years ago) but they are responsible for all their own expenses including forms, copying, signs, advertising, and errors and omissions insurance. In California commissions are always negotiable. I think they probably are everywhere since if they weren’t it would be price fixing.
Most people aren’t prepared to understand that selling real estate is like opening a business and requires a substantial investment.
Even if you get your first listing on the first day and sell it within a week you still have 30–45 days to close and lots of expenses in the meantime.
It can be a great profession but in your average real estate firm 10% of the agents get 90% of the business.

jca's avatar

Real estate always seemed like a cut throat industry to me.

Judi's avatar

@jca, it reminded me of the mean girls in high school. If you loved highschool you’ll love Real Estate.
I did go on to get my brokers license but I went into Property Management where the grown ups were.

Dutchess_III's avatar

I’ll keep you in mind too, @Judi.

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