The general public really has no clue of what all costs are involved with being a real estate agent. They think we all drive Benz’s and are grossly overpaid. Nothing could be further from the truth. It’s very costly to have your own real estate license. We HAVE to charge 6-10% in order to cover the costs of doing business.

The average agent makes under 6 figures per year selling real estate. Most agents don’t even sell 5 homes per year. With that in mind, there are tons of monthly costs that must be covered, whether we sell a home that month or not. 

To inform the general public and show them that it’s not all fancy cars and mansions in the lives of agents, I’ve listed 10 things real estate agents blow their commission checks on which the public has no idea about. 

Lockboxes:These little guys who hang on your door, when your home is for sale, are not cheap. Think about it, these are boxes that are destruction proof and operate by satellite. Not to even mention the expensive supra key that you have to buy and have a subscription to, in order to unlock the boxes. Agents who have 10+ listings have 1000s of dollars in lockboxes alone. 

Signs: An agent can’t sell a home without a sign. Signs aren’t free. Much like lockboxes, when an agent has dozens of signs, they have lots of money invested. The design and shipping alone is 100s of dollars. Agents use yard signs, open house signs, location signs, sold signs, pending signs, and in the HOA controlled neighborhoods, designer signs. It adds up very quickly.

NAR Dues: It’s one thing to have a real estate salesperson license, but if you want to sell homes, you have to belong to NAR. NAR is the association that acts like a lobbyist/union for all the real estate agents. NAR, or National Association of Realtors, is how an agent goes from being just an agent, to being a Realtor. They want money every month. And they don’t take IOUs. 

MLS Dues: On top of belonging to NAR, you have to pay monthly to have access to the MLS. The MLS is the source that lists all the homes for sale. Trulia and Zillow don’t have near as much info as the MLS. The MLS charges a hefty monthly fee to list and sell the agents homes. Without paying for the MLS and agent might as well suggest their clients to be For Sale By Owners. 

Marketing Materials: The agent’s main job is to market. They market properties and themselves. Between websites, business cards, flyers, and belonging to sites like Zillow and Trulia the average agent will spend almost $1000/month on marketing materials. A big time agent will spend $10,000+ in marketing each month. It’s not cheap to spread the word about a multi hundred thousand+ dollar asset for sale. 

Advertising: Running paid ads, adds up as well. [pun intended] Whether it’s on the baby seat in a shopping cart, a billboard or online, ads cost money. Ads are the lifeblood of a good agent. You want to hire an agent who spends money on ads. That’s how they sell your home. By advertising it. 

Website Hosting:If you’re going to sell real estate in 2016, you need a website. You’ve got to have a place for your prospects and clients to come and search for homes. That website has to feed into the MLS (another fee to do that) and the website has to be responsive. The average website costs $5000 and comes with a monthly charge of $200. You starting to see the pattern here?

Open Houses: You may think that we agents just sit in your home using up your free wifi. That’s not the case, we have to get food, balloons, signs, run ads, network, stage the property and everything else that it takes to make the place look like a million dollar home. I’ve even paid to have someone mow the yard and trim the bushes before an open house. I didn’t have time to wait on the owner to take action.

Closing Gifts:A good agent sends a gift to the clients after they do business with them. What most don’t know is that they usually send one to the title company and the mortgage officer as well. When everyone puts in hard work, the agent wants to reward them so they continue to do so. You may view it as frivolous, but you can never be too nice to title companies and banks. When you need a favor, gifts go a long way. 

Office Space:Most people think that agents have a job with an office. They don’t realize that the broker charges for the office space and the furniture that occupies it. Just know this: Noting is FREE in the real estate game. Not even a place to do your work. Agents are nickled and dimed to death. And as you know, commercial office space isn’t cheap.

So next time you’re thinking about hiring an agent, and you think their fees are a little high, think of what all is on this list (just a fraction of what is really paid for) and how it benefits the client and helps them buy/sell the home they want faster. Plus, if you hire the right agent, they can sell your home at a premium high enough to cover their commission costs. 

It’s not easy, cheap or always fun being a real estate agent, but the smile we see on our client’s faces when they buy a new home or profit from selling their old one, makes it 100% worth it. Share if you agree.

*If you liked this post and sell real estate, I encourage you to check out my personal site www.hardcorecloser.com which is a top 20,000 website in America and is top ten sales blog on the web. -Ryan Stewman