• Are all real estate agents making a lot of money?

    Contrary to the belief of money, most real estate agents are not millionaires, quite the opposite. The realtors who work with Robert Floris and Sean Howard must be extremely ethical. Have we refused to work with certain agents, you betcha! We thought we would demonstrate how a real estate transaction is calculated.

    Example: sale of a property of $700,000 with 4.5% sales price.

    The commission is split evenly between the listing agent and the agent representing the buyer.

    $700,000 times 4.5% equals $31,500

    Listing agent: $15,750

    Buyers agent: $15,750

    For this example we used an agent from Coldwell Banker who just represented a buyer. at her office, she gets to keep 60% of $15,750 equals $9450. It gets worse as the following fees are then taken off:

    • Federal taxes
    • HST
    • Office rent
    • Office supplies
    • Gas and car expense
    • Marketing ads

    This can add up to 30% or $2835. So we are down to $6615 [$9450 – $2835].

    Now I know what you must be saying, is that agent sell a lot of homes.

    Let’s look at the city of Toronto between November 2015 and November 2016. There are over 40,000 agents [yes that is correct] and review the statistics:

    20% of registered agent sold zero homes

    52% of registered agents sold between one and six homes

    14% of registered agent sold between seven and 12 Holmes

    10% of registered agent sold between 13 and 24 Holmes

    2.5% of registered agent sold between 25 and 50 homes

    0.4% of registered agents sold between 50 and 99 Holmes

    0.1% sold more than 100 homes

    Let’s take the 52% of registered agent who sold six homes and apply this to Hamilton:

    Gross: $15,750×6 = $94,500

    Net: $6615×6 = $39,690

    Real estate agents are professionals who put in many hours of effort without pay. But as the article clearly points out, very few make it to the top. If they have they have put in many years, paid the price, and spent many dollars marketing. If you believe that making $100,000 per year while not having set hours, think again.

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