Despite Mortgage Realtors Have To Work Harder in Light of Falling Commissions

Patricia Eisenhauer's picture
House for Sale

We are in a national market place where realtors are doing more work and getting paid less. Real Estate commissions from home sales are falling.

If you consider the truth that over the years while housing prices have escalated and then deflated, the average real estate commission (our paycheck) has remained static. Understand that the banking industry is salaried. Mortgage companies, appraisers and various office personnel earn their paycheck as they work nine to five. Whether or not a sale is consummated, they get paid.

The “new” market of REOS and distressed properties offer less than the usual brokerage. We realtors spend more money on advertising, gasoline, web pages, licensing and insurance and yet we receive less when a closing is actually accomplished! Of course investors historically offer even less to realtors. They naturally are interested in their bottom line. According to recent national statistics investors are buying fewer properties and selling off their investments in a ratio of 2 to 1.

The national average sales price of homes (including REOs, short sales, distressed properties and move-in ready homes) is $190,475. That means $5,330.00 to my office. Depending upon the commission split I earn, I might expect $3,500.00 to $4,000.00 in my pocket at closing. This translates into possibly $2,000 net after expenses. Therefore I need to close two or three sales each month or “get a job!”

California leads the nation in shortest time on the market (5.3 weeks). My home state of Florida averages 9.4 weeks. We need to add to that time the 30 to 45 days to closing.

I need to get busy with my market plan (with budget) or move to California!

Add new comment