Good afternoon, everybody. This is Chris Berger, local real estate agent, Hudson Valley Region. It’s time for a Berger Point.
I wanted to fill you in a little bit about how commissions actually work and how they’re paid out because there’s generally so much confusion and everyone thinks that the real estate agent makes so much money and it just gets thrown out of whack.
So I just sort of wanted to fill you in and how the system works.
Well what happens is that the listing agent when they go to the seller will make a percentage of the deal.
Let’s say normally it’s 5% so they will charge a 5% commission and of course the length of the contract is generally anywhere between three months and six months.
So at this point let’s take a $500,000 house.
So at $500,000 and a 5% commission when the house is sold, the broker will receive 5%, which is a total of $25,000.
Now, that broker will send half of that amount, which would be $12,500, to the other side of the deal, which would be the buyer’s broker.
That $25,000, it goes to the listing agent broker.
He then issues a check to the buying agent’s broker.
So therefore, at that point, each broker pays their agent the agreed upon amount that is due them.
And that’s pretty much how commissions work.
So I did have just a quick story with that.
One time I worked with a great couple and she fell in love with this house and she
had to have this house. However, it was in foreclosure.
And we made offers to it and the banks turned us down.
So I made the suggestion, go get your mortgage through that foreclosure bank.
And that’s what they did.
So that was the process. They started it.
Well, about a year later, they finally did get the house.
They loved the house. It’s been over 10 years.
And I’m very, very happy for them that we were able to put that deal together.
***
I wanted to tell you, too, today why I’m wearing my blue hat.
And it’s just a plain blue hat, but actually it belonged to my wife.
And on every third of each month, I wear this in honor of her.
So that’s the Berger Point of the day.
We all keep going. We all keep fighting and enjoy your day.
-------------------------- Hello! I'm Chris Berger and I'm sharing my 40+ years of experience as an NY & FL realtor, home renov & prop mgmt. Yankees fan. Concert goer. Dog lover. Granddad.
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