For as long as I have been in real estate, commission has been the most hotly debated topic among consumers. The biggest issue I think lies in the notion that all real estate agents are exactly the same and how each one sells a house has no difference. It’s pretty easy to think that because agents don’t typically talk much about where their commission goes and it keeps the consumer guessing.

I’ve decided to break down where the commission I charge goes for you to get a better idea of what the true costs of being a successful real estate agent are. When I talk about a successful real estate agent I am talking those in the top 1-3% who have an established track record of servicing clients and are the people you want representing you when you buy or sell your home.

To make this as authentic as possible I will be using my estimated Gross Income of 2016 which is $300,000.


Brokerage Fees: $25,500 (8.5%)

I work for the largest real estate company in the world with the best training in the world. I’ve worked for three other brokerages in six years and none of them come close to the level of quality that Keller Williams offers. The education, the level of guidance and respect my brokerage has for the industry directly translates into how I conduct business with consumers and my ability to see real estate in a way that gets me beating industry averages.


Office Space: $4,200 (1.4%)

“Hey Jim, how about you come into my basement and draft up that $800,000 offer with me? You will have to excuse my two kids and barking dog but I promise, it’s totally professional”. Who wouldn’t want to work with me?

I rent office space in my brokerage, where I have access to my personal office, two private offices and our board room… and of course our wonderful admin staff. When I am working, I don’t get distracted by anything and I am focused on servicing my clients.


Administrative: $30,000 (10%)

Overall I am quite happy I was only born with two hands, two feet and one head… but in real estate you need at least two people to truly be effective. If I were to respond to every single e-mail, show every listing to a MLS buyer, stage every house or host every open house I wouldn’t possibly be able to do it alone.

You need an administrative assistant or someone filling in the gaps to truly be on top of your game and I guarantee you will notice the slip ups from a realtor who is trying to wear too many hats at once. I know… I have been there.


Listing Expenses: $30,000 (10%)

Great agents never just put up a sign and expect a sale. We include photography, listing videos, pre listing inspections, staging and handyman services… trust me, real estate agents aren’t one size fits all.

The reason why 20% of us do 80% of the business is because we know what it takes to attract the right buyer to your house and we have the stats to back it up. We operate on a la carte services as well and if you don’t need a specific service, we don’t charge you for it.


Marketing: $30,000 (10%)

Marketing is not only about marketing your listing, it is about gaining recognition so that when we get your listing, we can expose it to as wide an audience as possible. This is done through various outlets, whether it be through blogging, social media, paid advertisements, magazines or charity and community events. We always need to be front and centre because when we build our personal brand we build relationships and a trust level with consumers, which is essential in this business.


Vehicle: $6,600 (2.2%)

Now don’t go thinking I’m driving some brand spanking new Benz at your expense, because I’m not. But I do drive a hell of a lot of kilometres and do have regular repairs and maintenance on my 2006 A4. This fee will go up in a year when I get a new car.


Board Dues: $3,000 (1%)

I am a member of the Toronto Real Estate Board, The Oakville and Milton District Real Estate Board and up until this year was also an access member of the Real Estate Association of Hamilton and Burlington.

Being a part of a local board is important because it allows you to see all the active listings and allows you to list your properties on each board. What you see on Realtor.Ca is different than what local realtors are looking at. If I put up a listing in Hamilton and only load it onto the Toronto Board, Hamilton agents won’t see it as easily and it won’t get as much traction.


Health Care and RRSP: $30,000 (10%)

One of the downsides to being in sales is that we don’t have a company health plan or have any type of incentives like matched pension contributions. I have two kids and know there are highs and lows in this business and if I was working any other job I would have this level of security and it is important to treat my work like a business and that includes treating me like a highly productive employee that has benefits.


My Gross Income: $140,700 (46.9%)

Let’s get this out in the open right away, if I hit my numbers this year I am making a pretty darn good income. I’m not going to sell myself short and say that I don’t work my ass off for it, because I do and there are a lot of things that go on behind the scenes you might not be aware of but you can check them out in this blog article.

This past Christmas Eve I was up at 6 am so I could drive to a listing my clients put an offer on so I could go into the attic and get vermiculite samples to drop off to a lab before 10 am to test the samples for asbestos. These are the type of things that come with being a real estate agent. I’ve never worked a 40 hour work week and I put up over 40% of my projected income without earning a single dollar. All of that doesn’t matter to me though, because I love what I do.

I completely understand that selling a home costs a lot of money and hopefully this provides some insight into what makes up real estate commission and you can understand that a true full service professional cannot do it for any less.

  1. Extremely informative!! We have our home up for sale (too far to hire you unless you can represent Florida residents) and often think commission is ridiculous but it’s nice to see where majority of it goes!! There’s a lot home buyers are not aware of behind the scenes…. Thank you!!

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