When people think of Real Estate, they think of big commissions and easy work. But how much do Real Estate Agents really make? On average, it is not as much as you think.
Last year the Toronto Regional Real Estate Board reported over 66,000 licensed real estate brokers and Agents in the GTA (Greater Toronto Area). They also reported 74,140 residential sales. That’s just over one sale per agent per year. Of course, the golden rule in the industry is that 20% of Realtors® do 80% of the business.
Let us break it down. Each sale transaction has two sides, a Listing Agent and a Selling Agent and they split the commission, usually 5%, on the property. The average selling price of a property in Toronto in 2022 was $1,189,850. That works out to be between $29,746-$59,493 in commission. Considering the brokerage fee, license fees, tax, and expenses, it does not leave much.
There are some agents who make some money, but most make no money after expenses. They are part-timers or, at best, a do-it-yourselfer.
What's the Message for Buyers and Sellers?
Your first question when hiring a Real Estate Agent should not be "What is your commission fee?" but "How many properties have you sold last year" Who do you want working for you, someone who’s a seasoned professional, or someone who does this once per year?