Amount of Commission that Realtor looses to Brokerage?

**SamanthaM** · 05-05-2012, 05:10 PM

Lets assume the commission rate is 6%

The realtor in this case represents seller side. The commission now splits into 3% each for buyer and seller side.

Of that 3% the listing broker will probably take 20-40% of that original commission. Plus the realtor has additional expenses to pay such as: gas, advertising, omissions insurance, transaction coordination fees, office space etc.

Is the above an accurate break down of how the commission process for the realtor?

**maui** · 05-05-2012, 07:02 PM

Originally Posted by SamanthaM

Lets assume the commission rate is 6%

The realtor in this case represents seller side. The commission now splits into 3% each for buyer and seller side.

Of that 3% the listing broker will probably take 20-40% of that original commission. Plus the realtor has additional expenses to pay such as: gas, advertising, omissions insurance, transaction coordination fees, office space etc.

Is the above an accurate break down of how the commission process for the realtor?

You forgot about taxes, which can be quite significant. The tax man is always waiting for their share, so after the brokerage gets their split and disburses compensation to the agent, then that agent will be responsible for paying applicable taxes.

**SamanthaM** · 05-05-2012, 09:30 PM

Yikes, seems like after everything is said and done your lucky to get 1/4 of the original commission no?

**Tony Yeh** · 05-05-2012, 11:26 PM

my answer is going to be "it depends"

20-40% commission to the brokerage. Sometimes even more for a new realtor. some split can be high as 55%.

the smaller the brokerage, the less fee is going to take.

But again, everyone's case is different, that is why you need to sell a lot of houses or do HIGH DOLLAR deals.