Understanding Commission
There are two sides to almost all real estate transactions. One is called the listing side and the other is called the buying side. Using easy numbers, the following is a breakdown of how the commissions are paid.
Traditional Model of Real EstateFor our example let's say the house was sold for $300,000 and the seller agreed to pay the listing company 5% of the selling price. It was also agreed that the listing company would offer half of the commission, or 2.5%, to the company that produced a buyer and keep the other half, or remaining 2.5%, for their services. When the house closes both companies will each receive $7,500.
$300,000 x 5% = $15,000 commission.
$15,000 x 50% = $7,500. Listing Company's commission
$15,000 x 50% = $7,500. Buyer's Broker commission
Of course, the Realtors involved would like to get paid some of those commission dollars. Dave, the listing agent, worked out a 60/40 split with the company when he was hired. This simply means that whatever money he makes for the company, he is allowed to keep 60%; the remaining 40% will stay with the company. In this case Dave made $4,500 and the company kept the remaining $3,000.
$7,500 x 60% = $4,500. This is Dave's commission.
$7,500 x 40% = $3,000. This is the Listing Company's commission.
Sue, the buyer's agent, has a 50/50 split with her company. In this case the commission would be cut in half and both Sue and her company will each receive $3,750.
$7,500 x 50% = $3,750. This is Sue's commission.
$7,500 x 50% = $3,750. This is the Buyer's Broker's commission.
Select A Fee Real Estate System
Keeping consistent with the above example, if the seller hired Select A Fee Real State, the commission would be $350 and 2.5% for a total of $7,850 on our Bare Bones Program.
Bare Bones Program: $350.00
$300,000 x 2.5% = $7,500. Buyer's Broker's commission.
This would be a total savings of $7,150.
$15,000 Traditional commission
$ 7,850 Select A Fee Real Estate System
$ 7,150 Total Savings
Keeping consistent with the above example, if the seller hired Select A Fee Real Estate, the commission would be $995 and 2.5% for a total of $8,495 on our Full Service program.
Full Service Program: $995
$300,000 x 2.5% = $7,500. Buyer's Broker's commission.
This would be a total savings of $6,505.
$15,000 Traditional commission
$ 8,495 Select A Fee Real Estate System
$ 6,505 Total Savings
Select A Fee Real Estate System Also Offers a
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