WHAT SHOULD I PAY IN AGENT COMMISSIONS?

Many opinions and advertisements cause confusion on real estate agent commissions. Here is a simple break down of commission structure, and common expenses that real estate agents and brokers incur.

LISTING AGENT

1. Supra lockbox for front door: $200 plus $15/month to keep it active
2. Sign post installation: $60 - $100
3. Signs: $100 - $250 each
4. Printing: $50
5. Photos: $500 - $900
6. Staging: $200 - $1500 (based on level needed)
7. Social Media and print marketing: $100 - $1500 (based on level)
8. Firm share of compensation: Flat fee, or range of 10% - 50%
9. Income taxes are not deducted from commissions and must be paid independently quarterly up to 35% of commissions.
10. Home warranty packages.

BUYER’S AGENT

1. Supra box monthly fee: $15/mo
2. Firm share of compensation: 10% - 50%
3. Lead referral fees (agents, Zillow, Realtor, etc.) 25% - 35%
4. Fuel expense for meeting buyers (varies)
5. Income taxes are not deducted from cmmmissions and must be paid independently quarterly for up to 35% of commissions.
6. Buyer must sign an agreement with the agent agreeing to pay commission if the seller does not pay. This often leads buyers to skip listings offering no compensation.
7. Home warranty packages.

EXAMPLE

$700,000 price x 2.5% commission = $17,500 less deductions of $6125 - $14,925 = $11,375 to as low as $2575 net before taxes! (Buyer broker)

$700,000 price x 2.5% commission = $17,500 less listing expenses up to $4000 and firm fees of at least $4375 = $9125 net before taxes. (Listing broker)

BENEFITS OF USING A LICENSED AGENT

Registered with the FBI and has exclusive access to lockboxes. Training, marketing, and negotiation skills for the toughest situations. Independent contractors supervised by a designated broker with a legal burden to the State of WA and regular audits.