As I’ve mentioned, my house is for sale, listed on the MLS via a boutique agency that provides little more for us than the listing. For the investment of a few hundred dollars, we figured it was an approach worth trying. At some point we may list with a typical (or is it best to now say “full service”) agent. But it’s dizzying to think about the amount of money we will pay in commission.

As a buyer, there’s little regard for the commission built into the price, but as the property owner and lister…ouch. As a seller, it’s painfully easy to imagine your agent walking away with a large wad of cash that might have been yours. Once more with feeling: ouch!

I have a friend who’s an agent, Beth Morgan of Prairie Shore Properties in Evanston, Illinois. I’ve heard her say that an agent’s commission is not all it seems, so I asked her to break it down for me to share with readers of the Roost Blog. Here’s Beth’s take on her take.

Let’s say the 6% commission is $15,000, a figure that’s close to what a listing agent would get for my house.

Beth said that amount is typically is split 50/50 by the listing agent and the buyer’s agent, so $7,500 each. Not bad for a day’s work, but the thing that Beth, and I’m sure every other agent out there, wants to communicate is that there is much more than a day’s work involved in a house sale, especially in this down market.

First, the brokerage takes its piece.  The percentage varies by agent & company. For a newer agent, this might about 50% of the seller’s agent $7,500, or in our hypothetical case, $3,750.  Beth cautioned me that this split varies depending on experience, production, or whether an agent brings in a lot of new business like a big development.

Still, even for a month’s work, the $3,750 might not be too bad. But then Beth reminded me that, like other law-abiding citizen and corporation, she pays taxes and has business expenses. I realize these are tax deductible, but as my independent businessman father often reminds me, deductible expenses are still expenses.

Beth told me that some brokerages that pay out a high percentage of the commission may charge a monthly ‘desk fee’ to cover phone, desk, receptionist, copier, and other office expenses.

And then there are things like MLS dues, association memberships (national, state, local), fees for things like lock boxes, advertising, lead-generation, postage for mailings, enrollment fees for continuing education, extra car insurance, sign installation and removal, loads of cell phone minutes, internet access, pay for an assistant….

Beth’s list goes on.

And on.

And then she reminded me about paying out of pocket for health insurance as well as the lack of paid sick or vacation days.

I get her point. The golden egg of a commission that stands out in my mind is more like Humpty Dumpty by the time everyone gets their share. This is something for all sellers to reflect on, especially ones like me.