Why is your fee based on the cost of the home? If you work the same amount to sell a house for $200,000 and one for $2 million, why do you get $6,000 for the former and $60,000 for the latter? In fact, it may be easier to sell the latter. I never quite understood the reasoning behind that.
In fact, sometimes we work
harder to sell a $60,000 condo than we do to sell a $400,000 home. I think it's just one more "progressive" method of passing on the cost of doing business to those who can better afford to pay for it.
I like to say that Realtors have to shoot with an elephant gun in order to make a living. The "elephant gun" being the commission. In our market, a good Realtor is charging somewhere around 4.5% commission to sell a home, no matter what price range the home falls in, of course. Out of that 4.5%, the Realtor is paying 2.5% to 3% to the Realtor who brings the buyer to the Realtor who brings the eventual buyer to the property. That leaves 1-1/2% to 2% for the listing Realtor -- out of which, most Realtors are paying 50% of that to their broker. So, on a $300,000 home, the listing Realtor is actually getting $2250 to $3000 after all is said and done.
The Buyer's Realtor (the one who brings the client who eventually buys the home) will make, probably, $7,000 (at 2.5%) and give half of that to their broker...so after all is said and done, THAT Realtor will make about $3,500. That Realtor (usually) has been working with the buyer for up to a year (maybe longer) and will show, maybe, 50 or more homes to their client before they actually buy...
if she stays with that buyer from start to finish. (My highest number was 85.)
For the money he/she earns, he will be available virtually 24/7 to serve his client. I've taken calls at 5:30 AM during the contract period as my clients begin to freak out about their deal (especially so with Sellers). The work is grueling...the stress is unimaginable.
A Realtor makes nothing if he doesn't sell property. No health insurance, no car expenses, no nothing. His broker
charges him for office space, telephone and advertising. He gets nothing from his broker. When I was selling aggressively, I grossed about $110,000 a year after having paid my broker $23,000 of my commissions (That was the most I had to pay...most Realtors never reach that number, so just pay their broker 50% of their commissions all year long.) The expenses involved in being a Realtor, joining the real estate board, renting your key card, etc., etc., probably amount to $1,500 a year.
I don't know why I'm telling you this -- you didn't ask. Ha! I just thought it might be interesting. Most people don't understand how Realtors get paid and how much they earn. The greater majority of Realtors probably don't earn $45,000 a year after all's said and done. And the number of Realtors who get their licenses and fail is staggering.