How Real Estate Fees Typically Work

Did you know that the traditional Real Estate model of using Real Estate Brokers when buying and selling properties has been in effect for over a century? In fact, America’s gold rush and land booms of the late 1800’s created a demand for someone to maintain an ‘orderly market’ for matching possible buyers with ‘available properties’. Thus, the Real Estate Broker was born.  If we 'fast forward' a hundred years or so, we see many instances where Real Estate Companies have evolved due to the sophistication of Consumers. Many different scenarios exist but the following is intended to give you a general understanding of who gets paid and how much they receive.

Most consumers are familiar with the quote of 6 or 7% as a real estate commission when they list their home for sale.  For our purposes we will use 6% and assume a selling price of $250,0000 dollars.

If a real estate company, such as ours, is a member of the “Multi-List” (a service that shares information with all other members) the 6% commission or in this case $15,000.00 can be split in as many as 4 ways. The company that lists your home for sale is called the Listing Company and traditionally that company would receive 3% or $7,500.00 of the total. The other 3% would go to the Selling Company. In turn, each company will have their own policy that states how much the companies retain and how much goes to the Listing and Selling agents.

In the past, the agent would receive 50% of the total and the company would receive the other 50%. This is still true of some companies today. So as in the above case, the $7,500.00 that goes to the listing company would be split with the listing agent who would receive $3,750.00. If the listing agent also brings a buyer to you then that agent may receive at least $7,500.00. The listing company in this example would also be the selling company. While this can be an expensive solution for selling property, it is not necessarily bad since the Brokers receive no compensation until the property is sold. Also keep in mind that the Brokers/Agent will invest time and money marketing the property.

This information is presented to you without comment as to the correctness or appropriateness of the magnitude of payment but merely to point out the amounts involved. And one of the most important things to keep in mind is that the higher the selling price, the higher the dollar number involved!

A La Carte Real Estate Company offers you the opportunity to buy or sell  property while minimizing the expenses. This can provide more money for your next purchase, help pay the expenses involved in selling your house, or give you additional money to decorate your new home. The key point is to have your home listed in the Multi-List where all members have access.

Please note that the company that lists your home, does not have to sell your home.  That is one of the main benefits of having your home listed in the Multi-List.  Any member realtor has access to sell your home.