How does $100 in marketing expenses justify a $60,0000 commission?

An argument you'll often hear in defense of the commissions charged by real estate agents is that their costs of doing business has risen dramatically in the past few years. If you watched the piece from 60 minutes, you heard the agent talk about the increased cost of postage, gas, printing, etc. that eat into their profits.

I could see her point. Walk by the parking lot at the Kingsway Royal Lepage Branch and you'll see a very significant collection of Europe's greatest automakers --- BMW, Audi, Mercedes, Porsche to name a few. With gas at a buck a litre, you can see how these poor people are clearly suffering.

But let's get back to the marketing full-service agents do. The so-called marketing plan that our agents put together for us included a 360 degree virtual tour of our home. They made it sound like it was some kind of super-costly value add that they offered. Truth be told, these virtual tours generally cost the agents about $100. Click here to see an online price list for a company that produces these for real estate agents. They also cobbled together an amateurish looking brochure with very poor quality photos they took themselves. Estimated cost for this piece of marketing wizardry -- $50 tops.

Our house sold for about $1.2 million. At a 5% commission our super-star agents shared $60,000 for a few hours work. Mind you, we have to factor in the cost of the virtual tour, printing a dozen colour brochures, a sign for the front lawn, and a few other incidentals which probably added up to about $300. Which leaves a very modest $59,700. That's tough.