What REALTORS® Are Paying

Fivewalls: What REALTORS® Are Paying

Sellers, Buyers, Real Estate Agents
Last Updated: Jan 25, 2019

Home buyers and sellers, especially first-timers, do not always necessarily know what costs are involved and who their money is going too. Understanding contracts and not being afraid to ask questions will make buying or selling your house so much easier. Real estate does not have to be a complicated headache. So, let’s break it down.

Advertising Costs

First, when you are selling your house and you hire a real estate agent, you are paying them to advertise your house. They are your marketer who is ultimately trying to make you as much money as they can by advertising through different platforms:

  • Their website/profile
  • Facebook
  • Twitter
  • Instagram
  • Magazines/Newspapers

The platforms are endless. It may take a while to advertise on all of them, but it pays off in the end. And, let’s be honest, you are paying them to do it so it saves you the headaches from trying to do everything yourself!

what your agent is paying for, costs to hiring an agent, your agent is spending money too, real estate agent feesThe Agent & Broker     

Second, your agent works for a brokerage. All the fees you are paying for and listing agreements you are signing are passing through the brokerage first. When the home is sold, the agent and their broker will split the amount. In some cases, the agent is given a portion of the profit and is also paid a flat-rate fee by the broker.     

The sellers are typically the ones paying for the fees since it is added in their home sale price. Although buyers may think they are getting these services for free, they are the ones paying for it as well when they buy the home. You may be wondering if you really have to read through all those pages in the contract before you sign them and yes, you do. Each case varies, so in order to understand the contract you are signing and what you are paying for, always make sure you read it first.

Your REALTOR® Is Spending Money Too

Ultimately, your REALTOR® will not get paid until they have successfully sold or purchased a new home for you. They are even investing their own money into:

  • Office space
  • Training courses
  • Insurance and Registration

There are multiple training courses they have to complete first before even getting their registration:

Course 1: Real Estate as a Professional Career

  • $575 Course

Course 2: Real Estate as a Professional Trade

  • $600 Course

Course 3: The Real Estate Transaction & General Residential Real Estate Transaction

  • $450

Course 4: The Commercial Real Estate Transaction

  • $450

Course 5: Real Property Law

  • $550     

Having finished all the courses, the total will be around $2,625.

They will also have to pay for their license and registration, which are a yearly cost ranging anywhere from $4000-$5000. REALTORS® also have to rent out office space, which varies in cost.

Do not forget those marketing materials either. Depending on what they are using to advertise, they could be spending $5000 or more, a study suggests, View Studies Article. They are doing this all for you.

Buyer & Seller Costs     

Closing costs, paid by both buyer and seller, may include:

buyer and seller cost, hiring an agent, what your real estate agent is paying too, costs for real estate agents

  • Inspection fees
  • Appraisal fees
  • Lender fees
  • Home Warranty
  • Legal fees
  • Property Insurance
  • Taxes
  • Other settlement charges

Of course, costs and services vary, and some can be paid ahead of time. Being a first-time buyer, or seller, is intimidating and nerve wrecking, so do not be afraid to ask questions. That is what you hired a REALTOR® for; to help you understand all the steps involved. If you do not ask questions about the contract and what you are paying for, you may end up in an unnecessary predicament.

Understanding contracts and not being afraid to ask questions will make buying or selling your house so much easier. Real estate does not have to be a complicated headache. Finding the right people to work with and for are the keys to your new home!


Check for certified Fivewalls agents here:

Lisa S. Realtor Profile Photo

Agent Name: Lisa S. | View Agent Profile>>

Serving Area: Toronto

"In addition to her real estate services, Lisa is an active property manager for a portfolio of income properties on behalf of landlords across the GTA."

Laurie O. Realtor Profile Photo

Agent Name: Laurie O. | View Agent Profile>>

Serving Area: Brampton, Burlington, Etobicoke, Halton Hills, Hamilton, Mississauga, Oakville, Toronto

"This story is all about you: my client. I plan to make you and your needs my number one priority from the start."

Noella I. Realtor Profile Photo

Agent Name: Noella I. | View Agent Profile>>

Serving Area: Brampton, Etobicoke, Hamilton, Mississauga, North York, Scarborough, Toronto

"Since being introduced to real estate over 10 years ago, I knew I could make a difference in people's lives."