The Real Estate Encyclopedia
Are Real Estate Agents Worth What They Are Paid?
Category - Home Selling Questions - Agent, Offer & Commissions FAQ's

A professional real estate agent is usually worth the commission they are paid. Clients must remember that an agent’s many hours of dedicated work are only compensated upon successful sale of the property and often many hours are spent on a transaction that does not happen.

Thus an agent could provide many hours of service and have applied his/her expertise to guide the client through the maze of requirements involved in the sale of a home, while carrying expenses out of his/her own pocket (e.g., advertising; MLS membership fees; traveling expenses; office supplies, etc) without being compensated if the house does not sell. According to a survey conducted by the National Association of Realtors® the typical Realtor® worked 46 hours per week, while one in five worked at least 60 hours per week.

Important to note is that the commission paid out is a gross amount, which is shared between the listing brokerage and the listing agent, the selling brokerage and the selling agent. Also to be deducted from the commission are the amounts payable to franchisors, the MLS, sometimes a referral fee, marketing expenses and advertising related to the sale of the property, and of course all the normal overhead and administrative costs associated in running a business.

According a survey conducted by the National Association of Realtors® in 2005 the median personal income earned by a Realtor® was $49,300. This was during the height of the housing boom.

Moving ahead to 2012 and a recap of the industry will show that home values have depleted by approximately 50% so if we are using the data from the height of the real estate market, we will have a greater understanding as to why a true Full-time Realtor is worth every penny.

Most sales today are derived from foreclosures or short sales, new home construction and traditional home sales make up a very small percentage of homes for sale today.

One good thing that has manifest as a resulted of this market is that most part time Realtors are no longer practicing, they are back to working a traditional 9-5..


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Home Selling Questions - Agent, Offer & Commissions FAQ's
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