This is something I get asked about from time to time and always a topic “of discussion.” Believe it or not, most Realtors are way underpaid and technically speaking – the industry hasn’t really seen a “raise.” The NAR has said that from the beginning of time, Realtors typically have earned 6% commission (that’s 3% for Buyer’s Agent and 3% for Listing Agent.) Sure – cost of homes has gone up – so in that respect maybe there has been a raise – but the cost of doing business has also gone up. You do need to understand that the commission is NEGOTIABLE and NOT SET at a fixed rate (because that would be illegal.) However, any of the Realtors who are worth their services – are also worth the commission.
Just discussed was “the compensation structure for Realtors” and this is an interesting tid-bit that might help the public to understand more of why a Realtor is unwilling to discount their commission, of the Realtors polled:
Percentage Commission Split–70%
100% Commission–17%
Commission Plus Share of Profits–3%
Salary Only–2%
Salary Plus Share of Profits/Production Bonus–3%
Share of Profits Only–1%
Other–4%
Basically, the Realtor does not get paid unless the deal closes. So while many clients become frustrated with the process (especially now with all the changes) you can see that the Realtors also get caught when the deal does not close.