Blog Wayback Series Continued –

From January 2007 – Transparency in Real Estate Fees:

Realtors don’t make tons of money. Seriously. Take for example what happens when I accept a referral from a relocation company.

Say, for example that the Seller is offering 3% commission on a $250,000 house.

$250,000 x 3% = $7500

If I made that much, that would be great.

Now, take the referral fee off the top –

$7500 – 35% = $4875.

Still, not so bad.

Now, split it with the Broker –

$4875 – 50% = $2437.50

Now, from this, take out taxes (being an independent contractor, there is no withholding, etc.), Realtor dues, all marketing expenses … and do you still think that Realtors make a lot of money all the time?

Prices of properties and sales volume certainly help offset the potential negative income when dealing with referrals, as does the repeat business when those buyer referrals contact me to market their homes … but … there is at least one (big) company from whom I never accept referrals because their agreement stipulates that once I work with someone whom they referred to me, all future transactions with that client must send this particular company a 35% referral fee.