Information For Sellers

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!!

Selling Your House? Choose Your Words Carefully!

Certain phrases pop up again and again in real estate listings, and these keywords offer a good indication of the prices a property will command. A listing promising a “once-in-a-lifetime opportunity,” for instance, has an average price of $3.4 million, while a “cute little bungalow” asks around $62,000, on average. Quirky terms pop up in local markets, too: You’ll never guess what one of the top phrases in San Francisco is.

After sifting through its 4.5 million-property database, has released a new study naming the real estate listing phrases that appear often in the highest- and lowest-priced homes.

As might be expected, most of the phrases that fill out the highest-priced listings evoke magnificent estates; in fact, “magnificent estate” is one of the top 10. (The average listing price of a magnificent estate: about $3.6 million.) The priciest phrase of all is “parlor floor,” which corresponds to an average property price of $4.9 million. “Parlor floor” is a common descriptor for luxurious townhouses in New York City, which is notorious for high real estate costs. Even the 250-square-foot shoeboxes under consideration by a space-squeezed city government would start at $940 a month to rent in NYC. (“Shoebox,” by the way, is not a term you’re likely to see in real estate listings.)

The phrase “highest level” — another example of urban market-speak — corresponds to a $3.4 million price tag, but most of the other terms imply more spacious surroundings: “formal gardens,” “paneled library” and “motor court” all make the top 10 list.

More specific phrasing seems to be a better bet for sellers: Trulia found that specifying oak or bamboo rather than just saying “hardwood” in reference to the floor corresponded with a higher listing price.

At the other end of the pricing spectrum, listings warning about defective paint or a “mold-like substance” clocked in with average listing prices of around $45K. When there’s a lead paint warning, the average goes down to $40K. Buyers looking for a starter home or investment property probably don’t want to spend much, and listings with those terms only average about $65,000. The lowest average price — $27,569 — turned up on listings with the phrase “minimum commission applies.”

Then there are the phrases that demonstrate the quirkiness of local markets around the country, where specific features or amenities seem to be popular with buyers (or at least the folks writing up property descriptions). St. Louis is the top market where “stained glass” is mentioned, for instance, followed by Pittsburgh. The word “lanai” — a kind of open-air porch — is a top term for listings in Honolulu, while “mirrored closet doors” are popular in Ventura County and Orange County, California. And hey, San Francisco: Trulia’s research upholds your city’s food-snob, health-nut reputation. The phrase “Whole Foods” popped up 10 times more frequently in San Fran than anywhere else in the country.

“Sellers need to know the local lingo in order to appeal to buyers, and buyers need to know which hyperlocal features they should look for,” Trulia chief economist Jed Kolko said in a statement. Buyers should also keep in mind that descriptive, flowery verbiage is a key sales tool — and not let those “cute” or “magnificent” words distract them from finding the best house for them and negotiating the best price possible.

“From a buyer’s perspective, listing words can be a strong clue whether a home might be overpriced or underpriced,” Kolko tells TIME. “An expensive listing described with words that usually appear in lower-priced listings could indicate it’s overpriced – or could indicate that the listing description is underselling the home’s features.”

Time Magazine: by Martha C. White March 1, 2013


4 Orchardside Dr, Cranbury

4 Orchardside Dr Cranbury, NJ  Recently sold in Cranbury, NJ – 5Br 6 Ba Colonial on 4+ ac. 4100 sq ft with 2400 sq ft finished basement.  Listed at: $1,099,000  Sold at $876,500 on 12/27/2012


3Ryan Rd., Cranbury, NJ

2 Ryan Road, Cranbury, NJRecently sold in the “Cranbury Estates” neighborhood- 3BR 1.5 BA split level home with beautiful updated kitchen, exp. MBR, 3 car garage with walk-up attic. Walk to town location. Listed at $459,900 Sold on 11/20/2012 $422,000 177 Days on Market

Cranbury Market Stats 09-10-12

While the market in our surrounding area continues to be very active

Cranbury’s demand is lagging. Pricing it right from the start is the key!

Cranbury Stats 09-10-12

Source: Middlesex MLS

Cranbury Real Estate Market Snapshot week of 7/23/12

Here is the weekly market snapshot for Cranbury:

Properties currently on the market:  22

Properties “Under Contract” in the past 30 days: 0

New Listings in the past 30 days: 3

Absorption rate (in months): 22

Properties reduced in price in the past 30 days: 5 or 23% of the total properties for sale

On June 25th, there were 25 properties on the market and 3 had gone “Under Contract” in the past 30 days resulting in an 8.33 month absorption rate.

Absorption Rate measures the health of the local market. It shows how many months it would take to sell all the properties available (if nothing new came on). A “regular” market is an absorption rate of 5-6 months. Anything higher is more of a buyer’s market and lower than 5 months is a seller’s market.  It can also be even more “price specific” to gauge the demand for properties within a specific price point.

Year-to-date, there have been 13 closed sales in Cranbury with a list-to-sale price ratio of 95.5% and average of 87 days on market.



Source: Middlesex MLS

Cranbury Market Update
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