Blog by Christine Pearson

<< back to article list

Why are Real Estate commissions so high?

This is a very common question that comes my way. The plain and simple truth of it is this. Real estate commissions are confusing because it appears to be a large sum at first glance, however, once the full picture is revealed the take home pay is very different.

Often, the commission gets split in half between the “Sellers Realtor® and the “Buyers Realtor”®.  For instance; if the commission is 7% on the first $100,000 and 3.5% on the remainder this gets split between the two Realtors. ®

So for example: 3.5% on the first $100,000 and then 1.75% on the remainder.  From that, a Realtor® needs to pay for Licensing fees, Association fees, continuing education, vehicle, maintenance, gas, insurance, phone, and office, marketing and advertising costs. We haven’t even talked about how many hours and weekends Realtors® dedicate to their profession. Many months can go by without seeing a paycheck. Someone in my office jokingly said to me that once they factored the hours and money spent, they could have made more at 7 eleven that year.

However; I look at it as a long range business plan. I believe in solid ethics and that integrity pays off. The best advertising is word of mouth and a good reputation. There are close to 50 licensed Realtors® in Nelson. Between May 15/2010 – May 15/2011; eighty three homes sold in Nelson. That is a pretty tough statistic to swallow.

People are intrinsically the same. We all want to have a decent life, a decent place to raise our children, and to have the means to plan for a decent future. The fantasy depicted on HGTV of Realtors® is just that, fiction.

If you would like to contact me, please e-mail me: christine@christinepearson.ca

Commissions