Rebecca was busy getting new listings into the Multiple Listing Service and Nikki was picking up a sign and lockbox, so I drove around Raleigh today picking up commission checks from 3 closings last week. Generally, we have commission checks mailed, but these 3 Attorneys’ offices were close to each other and I had an hour off in between appointments. And I discovered that it’s fun to pick up tens of thousands of dollars in commissions checks!
I hope you’re having that experience – or soon will be J
My goal in each transaction is to provide so much advice, counsel and emotional support that my clients would *gladly* pay me out-of-pocket for my services. Sellers, as you know, do pay us directly – every dollar of commission we earn is money that *they don’t* get to keep! And our commission for helping a Buyer is paid by the Seller but it’s disingenuous to advertise that ‘your services are free to buyers’ – they’re not! In fact, the typical buyer is paying your commission and the interest on it for up to 30 years since that fee is buried in their mortgage.
So be sure – really absolutely positively sure – that the service you’re providing warrants what you’re getting paid!
My typical commission check is 4-10 times what the closing attorney charges in my area. But they went to law school and most likely have multiple well-trained assistants. I went to Business School for my MBA but most real estate agents don’t – are you absolutely positively confident that you’re providing multiples of the value the attorney brought?
Or, from another perspective, the average hourly wage in the United States in July 2018, according to the Bureau of Labor Statistics was $27.05. If the average home price in your area is $250,000, and you earn a 3% commission rate and your real estate agency takes 30%, your typical commission check might be:
$250,000*.03*.7 = $5250, or 194 hours at $27.05 per hour
Now we both know that you’re not spending 194 hours on any single transaction, even if you double count for your time and an assistant. So you’d best be providing *tons of value* to your clients to justify your pay! J