WHERE DOES THE REAL ESTATE COMMISSION GO FOR EVERGREEN COLORADO REAL ESTATE
Last time we spoke about how the Real Estate industry creates the Real Estate market and today let’s talk about how the market is paid for. When a Real Estate company receives a fee it is split four ways. Let’s say the commission on a $216,000 home, which is the medium home price in America, is 6% or $12,960.00. One quarter or $3240.00 is paid to each of the procuring brokers. So the listing agent and the selling agent on average will receive $3240.00 each. Out of this they must pay for all their expenses like car, phone, yearly license and insurances, continuing education, web site, advertising, their part of franchising fees, MLS fees, cell phone and text equipment and monthly fees, 100 % of FICA tax (remember your employer pays half but an agent pay 100%), medical insurance, federal-state-local income tax, and supplies like signs, contracts, stationary, business cards etc. Expenses generally come to over 50% of the commission on the first 25 sale per year then the cost become a lower percentage as gross income rises. Of course, you tax bracket then starts to climb and cuts deeper and deeper into you income.
The Office for the buying and selling agent also receive $3240.00 each. Out of their percentage they need to pay commercial lease fees, commercial phone and utilities which are much more expensive than residential rates. The office décor and furniture must be paid for, secretaries, franchise fees, Real Estate Commission filings and storage for audits, book keeping for escrow accounts, salary for the managing Broker responsible to the State for all employed Brokers, the office web site, office advertising, accounting, taxes and name promotion. It usually takes between 50 and 75 transaction a year to start to make a profit.
Next time we’ll talk about how your agent saves you money. A home is a hard asset and is historically the best investment in inflationary times. Not only will you make money but You can live in your investment, while you will enjoy special income tax treatment. We are MARK ENGLISH REAL ESTATE and DISCOUNT MORTGAGES SERVICES (www.aloan2own.com) and are Your one stop shop for all Your EVERGREEN COLORADO REALESTATE and CONIFER COLORADO REALESTATE. We are also an EVERGREEN COLORADO CUSTOM HOME BUILDER and are looking forward to serving You with all Your Real Estate needs. Please, give us a call at 303-674-0148, Email us at markenglishrealestate@msn.com or visit us on the web at www.evergreencoloradoliving.com . Don’t forget to register for Your FREE BUYER INCENTIVES.