Broker Salaries & Commission
How do brokers who work in a large firm, i.e., Brown Harris Stevens, Corcoran, etc., get paid? Do they have a regular salary in addition to a commission? How much of the commission on a sale do they have to give to the company?
How do brokers who work in a large firm, i.e., Brown Harris Stevens, Corcoran, etc., get paid? Do they have a regular salary in addition to a commission? How much of the commission on a sale do they have to give to the company?
once a lit lawyer takes the case
s/he is at least ensured of either
winning or losing.
IOW you arent in 4 different courts fighting the same case with 4 seperate law firms, and deciding which firm to accept based on the outcomes.
which is exactly what happens to brokers.
offers get tendered declined renegotiated accepted, but
wait never mind we found something else…thru someone else…
but thanks for your time !
that’s just the way it goes…..
Hi,
I’m a real estate agent. One person, the real estate agent, is typically in charge of doing 100% of the work. This is how we don’t really make any money:
Most agents make 50% of the broker fee. The other half goes to the office. If a deal is co-broked, that’s down to 25% of the total percentage earned (1.5% instead of 6%).
Whatever money the agent earns, s/he must set aside 50% to cover taxes (federal, state, city, AND social security), none of which are covered by the employer. This means that the agent makes just .75% of the deal if the deal is co-broked or 1.5% if the deal is not co-broked.
The agent incurs the following expenses which must be taken out of the .75% or 1.5%:
Transportation
Flowers
Refreshments
Color copies and printouts
Huge cell phone bills
Other business expenses often include advertising (very expensive), business cards, etc.
In terms of time, the agent spends at least 5-10 hours compiling information for a potential seller. This does not mean that s/he will make any money for this work. If a contract is signed, then the agent has the responsibility of 1) fielding calls at all hours of the day and night, 2) doing open houses (2 hours of prep per open house plus the time it takes to do the open house itself), 3) showing the apartment to people who couldn’t make it to the open house, and 4) marketing the apartment (1 hour to take photos, 3 hours to make flyers, 30 minutes to write a good ad, and 30 minutes per week on other advertising endeavors). Once you sell the apartment, you oftentimes spend 10-15 hours per week calling lawyers, management companies, board members, and clients. It’s just nuts!
I just sold my first apartment apartment and made just $4100 (the total broker fee was $8200) – half of which will go to the government. I spent $1000 on expenses and probably spent about 120 hours on marketing, fielding calls, negotiating, and showing the apartment.
I probably made about $9 per hour. Needless to say, I am reconsidering my career choice.
Exactly 5:11. The attorney that I used to sue when I filed an EEO complaint against my employer did not take any money up front. I agreed that he would take one third if he won my case. He took 100,000 and I got 200, 000. I didn’t complain considering that I didn’t have the money or knowledge to win the case on my own. I would hate to fork over $59,000 to a broker but I also would not want the aggravation of trying to do it myself. I would do it though as long as I get to walk away with the number that I want.
i’m not a huge fan of brokers, but i must admit that i think our broker was worth every penny of the 6% commission he earned. he priced our place appropriately (i would have priced it lower) and — unlike the apt who rec’d an offer in 10 hrs — he marketed it well, showed it continually and until we had a good offer (a month & a half). with 2 kids and another on the way, there was no way i was going to be able to do all of that — it was hard enough keeping the place clean for showings.
and, fwiw, attys working on contingency fee basis (i.e., they get paid if they win) *can* make a LOAD of money — there are a handful who are some of the richest people in the country b/c of their cut of outrageous jury verdicts. but those attys are pretty rare. and i don’t think, on a general basis, they earn more than hourly attys. on why attys don’t do as well as brokers on non-corporate real estate deals — the work they’re doing isn’t as significant to the transaction, imo. they’re documenting the deal, not actually brokering it and, quite frankly, the work is a bit repetitive. (my husband and i are attys, btw.)
Yes- you’re absolutely right… other people do work that way…. and anyone that operates like that is going to charge a high split… it just wouldn’t make sense to do it for a normal wage. And it is fair because they only get paid for actually performing.
Actually, a lot of litigation attorneys do work that way – on different types of cases – they get paid only if they win. And they tend to earn a lot more than those who charge by the hour, like those who do residential real estate.
And many sales people, in all kinds of fields, work on commission. Like with real estate – some do well, most don’t really.
Your contract with your real estate agent… it reads in a particular way…and it is unfair… I want to say inaccurate to look at the number without considering the terms of engagement. Basically it says… “If you make me $300K (or some very large amount)… I’ll agree to give you a split.â€
So if the agent performs for you they get a big payout. But they also take a big risk… the risk of getting nothing. They also often split that big pay out 4 or more ways in order to get something (two firms co-broke.. and sometimes there is more then one agent on each side).
Try telling your attorney that you will pay him 4x his fee “if and only if he procures a dealâ€. Your attorney will turn you down. Most non gambling professionals will turn you down. You would probably turn me down if I made you an offer like that at your job. This is what it looks like… say you work for a paper company in Scranton… Instead of a salary… we say this to you…
Come to work… try to build some clients who want to buy paper… if and only if you sell paper… we will give you a split. You may spend a year or two putting in long hours here only to find you made nothing… but if you can land the big client… if you make us X… we will give you 50% of X.
yeah, 3:43, I’ve wondered the same on the difference between attorney and brokers fees. Made me realize (again) that any business where you get paid by the hour – v. a percentage of the deal – isn’t likely to earn you as much, relatively speaking.
—-
As to negotiations, you still have to evaluate offers, and communicate to the buyers, whether your do it through a broker or not – your broker can’t read you mind, you have to talk to them all through the negotiations.
And if you are selling a coop in a self-managed building, with your typical non-professional board, which has no incentive to cooperate with getting information on the building to your potential buyers’ attorney and answering the due diligence questions of the buyers’ attorney, then you sure do want to provide the information to the buyers’ attorney so they can get into contract, and their attorneys will call you, because otherwise their client won’t be able to get into contract.
3:43 here again.
10:24pm or others – Can anyone explain to me how the broker’s service is worth tens of thousands of dollars (or in my case a possible $59k) whilst the attorney is worth only 2 or 3 thousand?
I admit we were lucky in that we only showed two separate parties around and the first caller and viewer made an offer and after we countered they accepted.