Cranbury News

How Real Estate Agents Get Paid

How Real Estate Agents Get Paid

For my real estate friends who don’t quite know how to explain commission to their clients, here is my take on it. I have a bit of a background, having been a real estate agent for 25 years. Although people understood that I worked on commission, some still thought I got a paycheck or could get advances in tough times. Some thought that I got paid for every hour in the car or on the phone and got a bonus if something sold in my office.

Real estate agents do not typically make a salary. They receive a commission if one of these three things occur:
1. A buyer buys a house through the agent and it closes escrow.
2. A seller sells a house through the agent and it closes escrow.
3. A buyer or a seller uses an agent whom their agent referred. If this happens, their agent receives a referral fee (commonly 20-25% of the commission) from the agent who actually did the deal.

An agent does not receive monetary compensation for doing a market analysis, for showing property, for listing a property that does not sell (even if it is over-priced by the seller), for giving advice, for helping clients find a needed professional such as a contractor, for holding an open house, for taking “floor time”, or for any other service, except the three instances mentioned above.

Commissions are paid upon sale, from the proceeds of the sale. The seller agrees to the amount of the commission when they put the house on the market. The rate can vary, usually a percentage of the sales price. The most common commission rates are between 5% and 7% although they can be as high as 10% and as low as 1%. The seller’s agent offers a split of the commission to an agent who procures a buyer. Sometimes the split is equal, and sometimes one agent or the other receives a higher percentage. Agents also split commissions with their broker, the manager/owner of the office they work in.

Here is an example of a typical commission and how much ends up in the agent’s pocket:

Sales price $250,000. Commission 6%, split equally.

In this scenario $7500 would be given to the buyer’s representative and $7500 would be given to the seller’s representative. This starts with funds going to the broker’s office.

If the office is a franchise, a fee is taken from the top of the commission, a common amount is 8%. This would be $600.00, leaving a balance of $6900.00.

After the franchise, the broker/agent split occurs. A common split is 60/40 although top producing agents may receive 80% or more. Let’s use 70/30 for our example. The agent receives $4,830.

We are not done yet. From this amount, the agent is responsible for self-employment tax as well as income tax. Assuming a rate of 30% for both taxes combined, this amount would be $1449. The net to the agent, after taxes is $3381.

From this amount the agent pays all the costs of doing business (which may lower their taxes to some degree) and their living expenses. They fund their retirement account and pay their own medical insurance. Agents have numerous expenses. They write checks for licenses, dues and fees, for education and continuing education, for photographs, promotional materials, mailers, postage, advertising, desk fees, copies, forms (like contracts), insurances including errors and omissions as well as an upgrade on car insurance, gas (for showing property), a decent car (if possible), professional clothing, internet placement, glossy magazines, newspaper ads, flyers, signs and posts, gifts, client appreciation parties, snacks for open houses, keys and lockboxes, assistants and/or transaction coordinators, seminars, and more. Many agents end up paying for a host of other things to satisfy their clients such as staging, cleaning, snow removal, landscaping, and minor repairs.

Yes, a real estate agent can make good money. One big sale can change their life. Yet, they have a different salary from the executive with what appears to be the same salary. Real estate agents write checks before they get checks. They build relationships with everyone they meet, not just their “higher-ups” and their “subordinates”. They take calls at 4 am from a seller who can’t sleep because they are worried about their urgent need to move or a buyer who is scared because they have never spent this much money on anything in their life. They get to know people on such a personal level, helping them find a home, that they develop lifetime friendships. They get happy, slobbery kisses from the kids of their clients. They become a part of the families of each and every client they help. Real estate agents don’t do this job for the money and they sure don’t do it for the free time. Real estate agents do this job because they love helping people live the American Dream. Real estate agents do this job because they love you.

Thank you – Shahri Masters of Incline Living –


Princeton High School rated #2 in state for SAT scores

The List: Ranking the Top 10 Open-Admission High Schools by SAT Scores
Colleen O’Dea | February 9, 2015
Recently released results from School Performance Tests help draw a bead on New Jersey’s top public high schools

2. Princeton High School — 1867 total SAT
This used to be considered a regional school, accepting students from both the borough and the township before they merged to form a single school district in 2013. Home of New Jersey’s Ivy League university, Princeton is both a well-educated and wealthy community. Eight of 10 students who took the SAT scored at least 1550. The school had 1,460 students last year.
Source: NJ

Comment: Cranbury Township send it’s students to Princeton High School – which has been a terrific arrangement for Cranbury’s students.

If you’re curious, Millburn High School in Essex County was #1 with scores of 1897.





4 Wynnewood Drive SOLD!

4 Wynnewood Dr Sold photo  This is the 9th home sold or marketed by Katherine in this neighborhood! Obviously she has a following of buyers looking for homes in this lovely neighborhood.  If you’re considering selling and live on Wynnewood or Woodview Drs, she’s got buyers waiting for homes to become available!!

A positive outlook for the upcoming real estate market-

Message received today from Jim Weichert:

I told you last week that I believe 2015 will be the best year for real estate in a while. I outlined the unique selling situation we are in, highlighted by interest rates still near their all-time lows, a better selection of inventory than we’ve had in a long time and buyer confidence at the highest level since 2007. On top of that, gas prices are very low, which helps consumers and the economy, plus we’ve had much less snow so far this year!

Here are some numbers which will help you see just how favorable current conditions are, compared to even just a few years ago: 




Gas per gallon (NY area)




Stock market (Dow Jones)




Avg. 30-year fixed rate




Consumer confidence rating




Household income




Unemployment rate






1,369 ,405



Welcome Cranbury’s newest residents!

IMG_1516  Vito Ciancia and Gwendolyn Champion, and their 2 children Tyler 3 and Parker 7 months have just purchased 4 Wynnewood Dr. in Cranbury.  They have great plans to renovate the house and make it their own.  After seeing their previous home renovation,  I can say with certainty it’s going to be beautiful.!

Happy new home!!

Great Article on Cranbury from The New York Times!

What a great article about our lovely town! This is the first time Cranbury has bee featured in the NY Times in many years – please read and understand what a great place it is to live in!

Cranbury, N.J.: One Town, Many Personalities

Affordable new listing in Cranbury!


126 Plainsboro Road, Cranbury, NJ

Terrific 4BR, 1.5 BA colonial backing to preserved farmland is now offered for sale. Well-maintained, with hardwood floors throughout, an updated Kitchen with corian countertops, and updated baths.  Walking distance (really!!) to historic village with lovely restaurants, shops and ice cream stand. Cranbury Elementary School is a Blue Ribbon designated school and students attend Princeton High School . This is also an very easy commute by car or train.   offered at $435,000

What’s up with Brainerd Lake in Cranbury??

My cover photo is of beautiful Brainerd Lake in the center of Cranbury. Many non-residents are not aware of what is planned for the lake, and I thought I’d share this article for their information:

Cranbury moves closer to $3.5 million restoration of Brainerd Lake Dam

Anthony G. Attrino/ By Anthony G. Attrino/NJ.comThe Star-Ledger on February 14, 2013 at  8:00 AM, updated February 14, 2013 at  8:15 AM

Last summer officials lowered the water level in Brainerd Lake to decrease the pressure against the dam.

CRANBURY – After years of intense study and investigation, $3.5 million worth of repairs to the leaky Brainerd Lake Dam are about to begin.

Middlesex County will spend an estimated $1.5 million to replace and rebuild portions of the earth-filled structure, while township taxpayers will foot the other $1.5 million, officials say.

An agreement between the county and township was signed back in 2009.

“Nothing gets done overnight,” resident Bobby Marlowe said recently.

Marlowe’s home at 11 North Main Street filled with four feet of water during Hurricane Irene. She’s hoping the repair work might prevent future flooding.

But officials say while the work will repair leaks and make the dam stronger, it’s mostly a cosmetic undertaking, not a flood-control project.

“We’re doing repairs to make the dam last longer,” said township Engineer Bill Tanner, who has worked for years to get the work started.

Repairs will include expansion of the dam’s spillway, replacing the upstream wall and cap, and laying concrete blocks covered in soil to help with erosion, according to Tanner.

The dam serves as a road for North Main Street, also known as County Road 539. The construction is expected to reduce traffic in the area to one lane.

Last summer officials lowered the water level in Brainerd Lake to decrease the pressure against the dam, Tanner said.

Township committee member David Cook – whose own home near the dam has flooded in the past – said repairing the dam will not prevent flooding to nearby homes. To stop flooding altogether, a project upwards of $10 million would be needed, Cook said.

“The cost was astronomical,” Cook said.

The township went with a less expensive plan to fix up the dam so it would work – i.e., hold back water from Brainerd Lake and Cranbury Brook – for years to come, he said.

For now, township residents are invited to attend a public hearing on Feb. 25. Engineers from Najarian Associates will discuss plans to repair, rehabilitate and fix up the old dam, which was first built in the 1600s.

“We’re talking cosmetics,” Tanner said. “Lights, trees in pots, the color of the façade. What’s it going to look like now.

“As far as the hydraulics of the dam – that’s already been figured out.”

Community welcomes Jack’s Candy Shack

Jacks Candy Shack Article

Cranbury Cupcakes Opening Soon!

Cranbury Cupcake Shop 032311

Cranbury Market Update
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