Realtor Commissions Explained

Realtor Commission Rates Explained

Real Estate Professionals get paid on a commission split when a property sells you maybe surprised how much they can make off the sale of your home. 

 

Gross Commission (Based upon selling $600,000 Home)

Full service traditional Realtors charge  7% 1rst 100k and 2.5% on Balance .  The gross agent commission paid to the brokerage would be $19,500.  Realtors who are self employed with their brokerage pay a deal fee or percentage slip of the commission. 

 

Marketing Expenses

Think of your home like a product, you need to market it to sell it. Some products require different marketing than others.  This stays true for your home as well. Some homes may require a significant amount of marketing and resources while others may require very little.  Market statistics don't lie, ask your Realtor to bring them along, or even have a few realtors bring you some market data so that you can verify all the facts. If the majority of homes sell with marketing on realtor.ca only, then why even use the other forms of marketing?


Internet Marketing $150
Flyers $100
Gas $100

 

subtotal: $350

 

Average Days of the market for a sale at 90 Days 

Open houses = 16 hours

Contracts/Closing = 6 hours
Showings =8 hours
Research= 3 hours
Staging = 5 hours

 

Total 38 Hours

 

Calculating How Much Realtor Fees Paid By Hour

$19,500 - $250- $350 / 38 hours

= *$497 per hour with one agent 
= *$248.68 per hour with commission split 2 agent

 

*If property does not sell, the seller pays the Realtor zero dollars.

 

All marketing costs and time are not reinbursed by the Seller. 


Selling your home is one of your largest financial transactions, you must find a Realtor your can trust. Commissions may seem to be high, but in reality when you break down the commissions charged for Realtors here in BC, Realtors don't actually get paid very much money. One must also consider the same output of hours for properties that don't end up selling. Currently the active to sales ratio is 40% for detached homes which means approx 60% percent of the homes marketed are not sold. The next time you think a realtor in BC makes alot of money, just read this post or forward this to a friend.

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