How Much Does a Realtor Actually Make When They Sell Your Home?
If a $750,000 home sells and the listing side of the transaction has a hypothetical 2.5% fee, that equals $18,750.
So does the listing agent simply take home $18,750?
Not necessarily.
One of the biggest misconceptions about real estate commissions is that the gross commission shown on paper is the same thing as an agent’s take-home pay. In reality, a full-service real estate listing can involve brokerage fees, staff and transaction support, professional photography and videography, advertising, technology, insurance, licensing, taxes and other costs required to operate a real estate business.
Here’s a closer look at where that money can go.
A $750,000 Home Sale: A Hypothetical Commission Example
For this example, let’s use a $750,000 Denver-area home and a hypothetical 2.5% listing fee.
Home sale price: $750,000
Hypothetical listing fee: 2.5%
Gross listing commission: $18,750
Real estate commissions are negotiable, so 2.5% is being used only to make the math easy to follow. Actual compensation and expenses vary by transaction, agent and brokerage agreement.
And that $18,750 is gross revenue—not necessarily what the agent ultimately takes home.
1. The Brokerage
Real estate agents generally operate under a brokerage, and the financial arrangement between an agent and brokerage varies.
For this hypothetical example, let’s use a 70/30 split, with 30% going to the brokerage.
Gross commission: $18,750
Example brokerage portion: $5,625
Remaining: $13,125
Actual brokerage arrangements can look very different. Some agents have different commission splits, fees or caps, so this is simply one example.
2. Operations and Client Support
Selling a home involves a lot more than putting a property online and waiting for an offer.
Behind the scenes, there may be people helping with client communication, scheduling, listing preparation, marketing management, email outreach and the dozens of small tasks required to keep a listing moving.
For this example, imagine approximately $420 per week in operational and client support. If the listing takes five weeks from launch through closing, that would be:
$420 × 5 weeks = $2,100
That leaves $11,025 from our hypothetical gross commission.
3. Transaction Coordination
Once a home is under contract, there are contracts, documents, deadlines and other transaction details that need to be managed through closing.
In this example, we’ll allocate:
Transaction coordination: $700
That brings the remaining amount to $10,325.
4. Professional Real Estate Photography and Video
Professional marketing is one of the areas where I believe a listing deserves real investment.
Depending on the property and marketing plan, that may include professional real estate photography, listing video, social media content and other visual assets designed to present the home effectively to buyers.
For our hypothetical Denver home sale, let’s use:
Professional photography + videography: $1,000
Remaining: $9,325
This is one of the reasons comparing real estate agents solely by commission percentage doesn’t always tell you the full story. It’s worth asking what is actually included in the listing and how much is being invested in marketing your property.
5. Additional Listing and Marketing Expenses
There can also be expenses that vary from one home to another.
For example:
Digital advertising: $300
Signage and installation: $150
Print materials and brochures: $125
Client or closing gift: $150
Example total: $725
That brings our hypothetical remaining amount to $8,600.
Every listing is different. A particular property may require more, less or completely different marketing depending on the home, price point, location and strategy.
6. Taxes
Then there are taxes.
For illustration, if an agent reserved approximately 30% of the remaining $8,600 for potential tax obligations, that would be:
Example tax reserve: $2,580
That leaves approximately $6,020 in this hypothetical scenario before accounting for additional ongoing business overhead.
That tax reserve is not meant to represent anyone’s actual tax bill. Taxes vary considerably depending on the individual and their circumstances.
And There Are Still Ongoing Business Expenses
The costs associated with one listing are only part of operating a real estate business.
Agents may also have ongoing expenses such as MLS access, lockbox services, association dues, licensing and continuing education, CRM and other software, errors and omissions insurance, vehicle expenses, office costs, websites, technology, ongoing marketing, health insurance, retirement savings and team or business overhead.
In other words, gross real estate commission and take-home income are two very different numbers.
So What Are You Actually Paying a Listing Agent For?
This is the part I think matters most for homeowners.
When you hire a full-service listing agent, you’re not simply paying someone to enter your property into the MLS.
You’re hiring someone to build and manage the strategy behind the sale.
That can include preparing the home for market, pricing strategy, professional photography and video, digital marketing, buyer and agent outreach, showing coordination, offer analysis, negotiation, contract management, transaction support and problem-solving from the first conversation through closing.
The photographer matters. The videographer matters. The marketing matters. The transaction support matters. The technology and systems matter.
And the agent is responsible for bringing all of those pieces together.
Are Real Estate Commissions Negotiable?
Yes. Real estate commissions are negotiable, and the compensation structure can vary depending on the agent, brokerage, services provided and transaction.
That’s why sellers should look beyond a single percentage when interviewing agents.
Ask what the listing plan includes. Ask how the home will be marketed. Ask who will be involved throughout the transaction. Ask what services and resources are included in the fee.
Ultimately, the better question isn’t simply, “What percentage do you charge?”
It’s “What am I getting for that fee, and what is the strategy for selling my home?”
Thinking About Selling a Home in Denver?
If you’re considering selling a home in Denver or the surrounding metro area and want to understand what a full-service listing strategy could look like for your property, I’m happy to walk you through it.
Every home—and every selling strategy—is different.
Call or text me, Kayla Schmitz, at (303) 249-4118 to talk about selling your Denver-area home.
The figures in this article are hypothetical examples for educational purposes only. Real estate commissions are negotiable, and brokerage arrangements, marketing expenses, business expenses and tax obligations vary.
