DO YOU NEGOTIATE YOUR PAY?
How would you react if your boss wants to negotiate your pay cheque this week ? It’s not that you haven’t done a good job. In fact, you performed your job very well. Just like most people you probably a mortgage to pay each month. In addition , you have utilities to pay and probably car and house insurance. Of course there are groceries for your family, property taxes to pay, and income tax.
Have you ever wondered what your real estate commission covers? OR how it is allocated?
Do you assume, like many, that all the agent’s costs are covered by his/her Broker and that the agent pays nothing, therefore he/she is readily prepared to offer you a lower commission?
NEGOTIATE YOUR PAY EACH WEEK
What would you think, if your boss came to you and rather than pay you your normal wages, wanted to negotiate your pay that week? What if he asked you to accept a pay cut of 1-2% that week, even though you had performed your job well, or exceeded his expectations?
Real Estate agents are independent contractors
As realtors we are responsible for all expenses related to performing out job as a real estate agent. This is in addition to the common expenses we all incur like you, such as paying our mortgage buying groceries, etc.
Most Sellers I encounter are not familiar with how the Selling Commission is allocated, and what it actually covers. Here is an excerpt from my booklet… A Real Estate Guide for Sellers
How Commission Is Allocated … and What It Covers
Real Estate professionals are independent business people who must pay fees to their broker. Annual dues to real estate boards are also payable by the realtor to gain access to the MLS service. We must cover ALL of our business expenses before net earnings are attained. We also pay for our For Sale sign, open house signs and business cards. Marketing fees and use of office space, photocopying, facing etc., are other expenses.
Most professionals receive an hourly fee for services as the work is done. This is not the case for real estate agents . We are paid ONLY when we have successfully completed a transaction. All work leading up to that point, which might include consulting, fee appraisal evaluations and such are also expenses we incur. We also incur expenses when listing, marketing, and showing properties. When we meet a Buyers we pre-qualifying them, arrange appointments, advertising, prospecting, etc.. All of these activities are in advance of the property selling and we remain unpaid, until two parties are successfully brought together in a real estate transaction
HOW COMMISSION IS ALLOCATED
- 50% must be paid to the selling broker, of which the salesperson gets a portion, dependent on what level of ” split” they are on at a given time. Each agent is under contract and the split, varies with the amount of commission earned
- 50% must be paid to the listing broker, and the salesperson who represented the Seller gets a percentage after the Brokerage takes their share. The amount will be dependent on what “split” they are currently on with their respective broker. Again, this amount varies with the amount of commission earned.
WHAT DOES COMMISSION COVER
Real Estate Sales people are considered to be self employed contractors, working under the umbrella of their brokerage. As independent contractors we are responsible to pay a variety of fees and expenses. Here is a sample of some of things we have to pay for from the commission we earn….
- Licence Fees We must be licensed to sell real estate under OREA jurisdiction and by-laws.
- Board Fees: Toronto Real Estate Board, and Mississauga Real Estate Board and any other Real Estate Board the agent is a member of.
- Broker Fees: A portion of the commission earned goes to the brokerage.
- Franchise Fees: We are required to pay a monthly franchise fee.
- Advertising: All advertising, which includes newspapers, flyers, newsletters, mail-outs, web sites, marketing on social media, feature sheets, personalized booklets, etc. are all expenses the real estate agent is responsible for.
- Office Fees: A fee is paid to the broker for items as: office space, computer equipment, software, fax machines,. We also pay for phones, pagers, stationery, and secretarial services. We purchase our own listing and open house signs, business cards, and automobile.
- Education Courses: Agents are responsible for all educational courses and real estate seminars. Continuing education courses are mandatory for all agents.
- Insurance: We are responsible for our own medical/dental insurance and personal liability insurance.
- Vehicle: Our insurance premiums are higher as we are required to have a business policy.
- Repairs: We pay for all vehicle repairs, maintenance and gasoline used.
All of these deductions/expenses are taken from the total commission real estate agents earn.
WE WORK DILIGENTLY
Real estate agents work hard to get your house sold to achieve the highest dollar amount possible. We do this with as little stress as possible to you and in the quickest time possible. More than 80% of people who try selling their own home soon realize what is involved. They realize how much work that is truly involved. In addition they realize that much time and money is involved to market the home. Most soon entrust the sale of their home to a professional and knowledgeable real estate agent. The process can become complicated. It can also involve legal issues. This could result in the expense of a lawyer to sort out the problem. We work hard for you in the sale of your home, and don’t feel it is fair to have to negotiate our pay if we do a good job.
SELLING YOUR HOME
Selling your home is more than putting a “For Sale” sign on the lawn. It’s more than posting it on your local Real Estate Board MLS system. There is much move involved in the process. The clauses in an Agreement of Purchase and Sale can be confusing if you are not trained to read them properly. One word could change the meaning of the entire clause and be detrimental to you. This could cost you thousands of dollars you were not anticipating. I will be there to protect you and look after your best interests when negotiating the sale of your home. I will continue to be here for you before, during and after the sale for whatever you need.
LEAVE IT TO THE PROFESSIONALS
Leave it in the hands of a professional. The sale of your home is probably one of the most expensive transactions you will make. Hire a professional realtor to handle the most expensive asset you own. Hiring a realtor has many benefits. Realtors are great negotiators, and only bring qualified buyers. This saves you the time of pre-qualifying the buyer. We ensure the offer you receive does not contain anything that will affect you negatively. You may realize that hiring a realtor will result in it costing you less in the end.
I live and work in STREETSVILLE and have a vested interest in property values here. Are you considering buying or selling? Do you know anyone who is? Give me a call for a free evaluation of your home in this changing market. (416) 717-6331. Your home may be worth much more than you realized.
Your STREETSVILLE Real Estate Agent
Experience, Service and Integrity in Every Real Estate Transaction
Call me at (905) 363-4622 or direct at (416) 717-6331.
For information on buying or selling real estate, please visit my website: www.gloriavalvasori.com
For information on Buying Real Estate: https://gloriavalvasori.com/buying/
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