Boy...this is the kind of topic that gets everyone feeling awkward. I mean, nobody talks about what they make or what they spend because it's really a personal matter. But I'm finding out more and more that clients don't know how real estate agents make their money. And of course, nobody wants to ask. But, if you are using someone's services, wouldn't you like to know how they get paid? During a recent conference a co-owner of my company went to, there was a panel of people that were asked a lot of different questions about real estate. Each person had recently purchased a house and the people at the conference were all interested to hear about each one's experience. But, when asked, "How does your real estate agent get paid?" the answers were...well, lets just say, interesting. So, here is the skinny. Real estate agents work for a company but each agent is actually an independent contractor. This means that agents do not make a salary at all. Real estate agents all work for commission only. And everything that is done by each agent that costs money, is paid for out of his or her pocket. So things like photos of a home, those open house signs, flyers and mailers, associations fees and dues, and all other expenses come straight from a personal bank account. When we sell a home, the commission comes from the sale of that home and is split between the two agents that worked on that sale together. That is, the listing agent and the buyer's agent. So if you are working with an agent and he or she is doing a good job, stick with them rather than switching to someone new part way through your search. Chances are, they've put a lot of their own time and money into helping you with your home search and if they are doing a good job, then they should be able to finish that job and see you all the way through a purchase.
So then, you may be wondering, why does an agent work at a particular office or any office at all if they are not paid? Well, there are a number of different reasons to work with a particular company over another. Here are some of the reasons I chose the company that I work for: For starters, I really like the branch manager. This is the person you go to with any questions or concerns you may have about a transaction. I really want to make sure this is someone I can trust and feel free to go to anytime with any questions I may have. Also, we have to split part of our commission with the company we work for so you want to work at a company where you think your money is going into worthwhile projects. My company puts a lot of effort into staying on top of what is going on in real estate and staying very current with things like social media and new apps and websites. They are tuned into how to market our company and agents with today's clients which are using the internet and new industry advances like QR codes to find information. They make sure their website is up to date and looks sleek and professional as well as being easy to navigate. My company also holds monthly meetings where we can learn about architectural styles and designs. We also have a terrific PR person who makes sure our company name gets out to the public a lot and that our agents shine with their marketing pieces. So I hope that answers at least some of the questions you may be wondering about your real estate agent or just the process of how we work. I love writing about things that people may be asking about or the hot topics of real estate today so if you have any suggestions or questions, feel free to let me know and I will be sure to put it on here.
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