Why does a REALTOR® charge commission?

Your REAL ESTATE agent is a self-employed business professional. Their job is to represent you in the transaction of REAL ESTATE. As a licensed REALTOR®, a huge amount of responsibility goes along with the job, not only to serve you as a client, but to help protect you and your interests.

Being a REALTOR® is not a 9-to-5 job. There is no wage or salary check from their employer at the end of each pay period and no hourly rate is determined by a labor board. Your REALTOR® is paid only upon successful close of escrow.

Being a REALTOR® is just like operating your own business. Your agent faces similar “overheads” found in any business venture with a good portion of their commission satisfying these business-related expenses. Depending on the agent and the agency he/she represents, that commission is often split with their REAL ESTATE office to help cover the “cost of doing business.”

Other REALTOR® expenses come in many forms. Advertising your home and their services via magazines and newspapers is extremely expensive. A single page in a “free” publication (i.e., found at the grocery store) can cost several hundred dollars alone each month.  Transportation, vehicle operating costs and rising gasoline prices are also a very expensive portion of a REALTOR’S® business. Office space/facilities and equipment are a monthly expense for your REALTOR®. “Cutting edge” technology costs money and computers, printers, hardware, software, websites, e-mail, cell phones with airtime and long distance, renewal hours and continuing education classes are just some of the things which must be paid by your agent before a commission is ever paid.

When you retain a REAL ESTATE agent, please remember that they are working hard for you and the commission that they earn is typically well-deserved.