A small number of my high end listing agent clients are now charging their clients a “listing set-up fee” of $500 to $1,000. This covers the initial photography and basic print flyer costs for the agent and is refundable at closing. If the home owners aren’t willing to commit to the fee it’s usually a pretty good indication that they’re not fully committed to selling their house.

In the last month I have asked two different home owners both putting multi-million dollar homes on the market
where they were moving to and each replied “Oh, not sure really. We thought we’d just list our house and see if it sells….”

I’ll let you guys take a wild guess if their homes were priced realistically or not…..

Hey…I’m all for getting the most I can for my work, but our fees are directly related to what the competition in our area dictates, and what the agents will pay. If we don’t like that we find another handle.

I am just entering this market and found your article to be informative and provided a good base line for where I could start looking at pricing realistically but competitively. In my eyes, for the service I would be providing, $100 – $200 seems a little low but time will tell.

Thanks for the great information and keep it up.

The theory is probably quite different for apartment real estate…correct? How would you ballpark that? Or…say it was for a property management company dealing in apartment/townhomes? As rentals?

My other question is on usage (off topic?)…if the later were true, when would be good for usage end? calendar year?

I’m not buying that. I don’t know of a single real estate brokerage that takes 50% of an agent’s commission on every transaction. And then a separate “desk fee?” Yikes! Time to find a new brokerage.

Nowadays, the 5% – 6% commission is split between the listing agent and the selling agent. Sometimes it’s 3% to the listing agent and 2% to the selling agent depending on how the listing agent has worded the listing agreement. Then the agent’s brokerage will take a cut from the agent’s commission. For some brokerages this is a fixed percentage for every listing. 15% for example. If your brokerage is taking half of every single transaction then you are being ripped off in a big way. Seriously. It’d be cheaper to start your own brokerage.

Other brokerages will take half of the agent’s commission until the agent has paid their “desk fee” for the year and then the agent gets to keep their full commission on all remaining transactions. For example, Windermere’s desk fee is about $25,000 a year. They take half of your commission on every transaction until you’ve paid them that amount for the year. Once you’ve paid your “split” then you keep 100% of your commissions until a new year begins.

Some brokerages will take a percentage of every commission and then charge a separate “desk fee” but it’s usually only a few hundred bucks a year and it’s usually the less successful brokerages that do this because most of their agent’s aren’t doing enough business to take a desk fee out of their commission.

So on a $500,000 home a listing agent might get $15,000 in gross commission (3%). Then the brokerage takes their cut: maybe $1,500 (if they’re taking 10%) or $7,500 (if they’re taking half), leaving the agent with $7,500 to $13,500. For our calculations let’s say $10,000. A decent real estate photographer costs $250 – $500. For our calculations let’s say $300.

So hiring a decent real estate photographer will cost you 3% of your net commission on a single $500k sale. So is it worth it? I’m not going to comment, suffice it to say that an agent’s answer to this question says a whole lot about his/her business acumen….

There are four parties to each real estate transaction. Listing agent, listing agent’s broker, buyer’s agent, buyer’s agent broker.

Divide the gross commission by four before you start your calculations.

Also… each real estate office has “desk fees” that vary from 1% – 5% of the gross commission. Desk fees account for payments to National chains, use of telephone, office equipment, etc.

Also keep in mind that we only get paid when the home sells. It could take months… so any money paid out for a listing would be a loss, if the home doesn’t sell, or expires and another agency picks up the listing.

Rebecca

That commission, usually around 4-5% now is actually divided 4 ways – it’s split in half between the buyer and seller’s brokers, then the broker splits it with the agent depending on the size of the agent’s split which can be anywhere from 48% to 80%. Then out of those commissions they pay E&O insurance, Local MLS Dues, State MLS dues, National MLS dues, they now have to update their education in many states which means more fees, most advertising and websites and well just about all their phone and technology is out of pocket, health insurance… all out of pocket. They will usually lease a car because that helps with tax write offs after the gov’t takes their HUGE chunk out of their teeny checks. Trust me, unless they are married and have a second income, in this market, most aren’t making all millions – 2% usually do most of the business!

So if they complain about all the fees- that’s why! And guess what! They don’t get paid unless the house sells! If it doesn’t it’s pretty much charity work! lol