Re: Becoming a Real Estate Agent
Posted by:
2 Feet in the Grave
()
Date: January 12, 2012 01:50PM
Depends. Commissions are negotiable and splits with your broker can vary. But in full-service firms, assuming a 6% commission, an individual agent would end up with 1.5% (1.5% to the listing agent, 1.5% to the listing agent's broker, 1.5% to the buyer's agent, and 1.5% to the buyer's agent's broker). If the same agent handles both sides of the transaction, he/she then would get 3% . . . but that's pretty unusual in this area.
So: 1.5% of what? If you're selling $200,000 condos, that's $3,500 per sale. $500,000 single-family homes and that's $7,500 per sale.
How many sales? One a month (12 a year) would bring you to $42,000 using the condo example, or $90,000 on the single-family home sales. A beginner isn't likely to sell 12 in his/her first year, but it could happen.
But that's the gross amount. Subtract membership dues to NAR, VAR, and NVAR. Subtract the MLS membership. Subtract the Sentrilock (lock box) fee. Subtract fees for mandatory continuing education. All that's at least $3,000. Subtract your marketing expenses. Subtract auto expenses. If you don't have a spouse with health insurance (and you want/need health insurance), subtract that. Insurance--including errors & omissions)--subtract that. Subtract educational expenses for any certifications or designations. Travel and registration for VAR and NAR conventions, if you decide to attend. Very roughly, you're probably looking at about 30% overhead.
Bottom line: You could end up around minimum wage. Or you could do quite well.