When you listed your home, you were surprised at the projected costs. The agent’s commission, of course, was the largest expense. A close look may help explain, in part, what you are paying for. Competent agents do extensive research prior to meeting with the seller. The process starts with reviewing tax records, permits, the title report and researching current market information. Closing cost estimates and a plan for effectively marketing the property should be presented for your approval. Once listing terms are set, photos are made. Virtual tours may be ordered. The property is submitted to the Multiple Listing Service and other web sites with which the agent participates. The marketing plan commonly includes flyers, print advertising, agent caravans and open houses. Even the sign in front of your home is not free. A complete and effective marketing plan doesn’t happen overnight. For instance, it takes years to engineer websites that get noticed. When a buyer is found, the agent must carefully evaluate the nuances of the contract. They must timely coordinate with lenders, Escrow, the Title Company, termite inspectors, surveyors, home inspectors and insurance agents; there are others if the transaction gets complicated. To this point, the seller has normally paid nothing. Like attorneys who are paid when the client wins, REALTORS® are normally expected to “front” all costs. We get paid when you “win”. Costs, exclusive of labor, quickly run into the hundreds or even thousands of dollars. Public perception is that REALTORS® make lots of money. Truth is, most do not. In 2008, the national median income (half made more, half made less) of a real estate sales person was about $31,000. Sounds like decent pay until you consider that each agent is an independent business entity solely responsible for their own costs, taxes and benefits. By the time marketing costs, commissions splits (normally 4 ways), franchise fees, GE taxes, MLS fees, local board fees, license renewal, continuing education and miscellaneous costs are factored, the agent is lucky to net 1% of the sales price. This could be broken down monthly or hourly but doing so skirts the real issue, which for the seller is, can your agent afford to provide the services you contracted for; can they work for free until your “case is won”!