What real estate company will you associate yourself with? One company gives you all "your" commission but you pay through the nose monthly for their fees. If you don't sell anything you still owe them monthly. Some companies pay you "your" commission in gradual steps, 50% of the commission until you sell XXX amount and then you get 55% of "your" commission until you sell XXX amount and you get 60% of"your" commission until you cap. My company gives all agents (New and Old) 70% of "your" commission until you cap at XXX amount and then you get all of Your commission. As with all companies on your annual date you go back down to the beginning commission level.
Then how well are you going to market yourself. Nothing worse than a Secret Agent Realtor. You have to be able to afford a marketing campaign to get your name out there to the public. Then you have to afford to be able to send out mailings in bulk asking for business. How many Realtors are there in your local association? What will make you stand apart from all of them so that a seller will list or a buyer will buy with you as their Realtor? Check to see what the fee for membership to the local real estate association or the MLS carrier will be.
If you need a paycheck your first six months then you should talk to other Realtors that may need to hire a buyer's agent or a listing agent and go to work under that Realtor. My advice would be that in this market if you do not have any prior life experience such as you have lived and worked in Cuyahoga Falls longer than 25 years OR if you have work experience in a field such as marketing, business, self employed, banking, legal, PR, etc., then I would work under someone else to get the real estate training and experience without having to pay all the dues alone. The real estate training you get to take the exam to become a Realtor in our area is not the training that you need to actually be a Realtor. Be prepared also, Realtors are always taking classes and learning so don't be mislead that you only have to "pass" the exam to become a Realtor. Those days are long gone.
On a positive note, it is a great industry to be in. When you get that first time homebuyer in their house and see the excitement they have.... or when you sell a property that someone desperately needs to sell to move to another town because of a job transfer or because they are older and need assistance in living.... or when you sell a small home for a couple who then buys a bigger home because the baby needs more room.... it is a worthy place to be.
- Younger agents are being washed out: less than 20% have 3 or fewer years of experience, compared to more than 25% last year. Median gross income of Realtors with 2 years or less experience was $8,600.
# 75% of Realtors donâ€™t have a second job whereas 25% state real estate is not their only occupation.
# Under 50% of Realtors surveyed noted real estate is their primary source of household income.
73% of Realtors reported being â€œvery certainâ€ theyâ€™ll remain int he business for at least two more years (therefore, 27% reported uncertainty of being in business for that long)
Median gross income for Realtors fell 14%.
Annual Income of Realtors in 2008 (Gross Income Before Taxes):
* - Less than $10,000: 22% of Realtors
* - $10,000 to $24,99: 17%
* - $25,000 to $34,999: 10%
* - $35,000 to $49,999: 13%
* - $50,000 to $74,999: 13%
* - $75,000 to $99,999: 9%
* - $100,000 to $149,999: 8%
* - $150,000 to $199,999: 3%
* - $200,000 to $249,999: 2%
* - $250,000 or more: 3%
Higher earning Realtors more frequently have a website, hold at least one designation, have been at their firm longer, and frequently have a bachelorâ€™s degree or higher.
# Realtor Transaction Sides, 2008:
# - 12% of Realtors had 0 transactions
# - 31% of Realtors had 1-5 transactions
# - 21% of Realtors had 6-10 transactions
# - 13% of Realtors had 11-15 transactions
# - 7% of Realtors had 16-20 transactions
# - 13% of Realtors had 21-50 transactions
# - 3% of Realtors had 51 transactions or more
# Amount Realtors Spent To Maintain Their Website, 2008:
# - 22% of Realtors spent no money to maintain their website
# - 18% spent less than $100
# - 30% spent between $100 to $499
# - 18% spent between $500 to $999
# - 13% spent $1,000 or more
The most common info on the websites (according to NAR) is the memberâ€™s own listings.
# -Realtors who spent no money on their website had a median of 0 inquiries.
# -Realtors who spent less than $100 had a median of 3 inquiries.
# -Realtors who spent between $100-$499 had a median of 4 inquiries.
# -Realtors who spent between $500-$999 had a median of 6 inquiries.
# -Realtors who spent $1,000 or more had a median of 14 inquiries.
I am not sure if you are reading the right post.
Several people including myself offered the most realistic suggestions. A measure of what you make is how much you get to keep.
That first year has a lot of one time expenses that will eat into your income. I like to think that my advice is like my Real Estate philosophy.....Underpromise and Overdeliver!
If he makes a profit in year one, Kudos to him. He should also know that the failure rate for Realtors in the first 3 years is somewhere around 70%. I would have to investigate further for the actual number, but it is high!!!! He should know that too.
Also, most brokers (and agents) will tell you that it usually takes 3-6months to get your first sale (in some cases even longer) Add to that that once you have a deal signed, you won't actually see any money untill closing, which could easily be 1-1.5months after signed Purchase & sale agreement. Through in the fact you'll have to pay whatever membership dues (realtor fees) mls fees etc up front, before you make any money.
So, theotericaly you could make just about any figure, realistically (and on average) your first year income would be very low. I'd say if after all your realestate related spending you ended up with 30k it would be a great success.
That is your income for year one.
One you pay for all of your "equipment", marketing, education, fees, etc,etc., EXPERIENCE is your paycheck!
I sold 20 houses my first year, and didn't earn much once you figured in all the costs. Like any business, Real Estate is a long term investment. The failure rate is huge for new Realtors, and you need to be prepared for year one to be financially tough. You may even lose money.
If you exceed the expectation and should make some money, that's great. But most new businesses fail (and understand that this IS a business) due to underfunding. They didn't bring enough money to the table to survive the little or no income in the first year, as you grow the business.
I would advise you to interview 3 brokerages and ask them to tell you how their newbies do. Also keep in mind that it completely depends on your ability to market yourself. If you are normally successful, you will do well. If you are a slacker, are the average, you will not do well. It's a tough gig since real estate agents are considered an undifferentiated cimmodity so again, you have to be the best of the best to break through. The first 3 years will be tough then it gets easier. But it is fun and very rewarding.
The business of real estate is based on your ability to make in-person contact with qualified buyers and prospective sellers. Putting aside the service aspect - if you can't make the contracts, you won't have any business.
If you're good at prospecting, you can make some gppd money. If you're lousy at prospecting, you can make lousy money!
Let me first say, because income for a Realtor is based on actual production or sales, then income is going to swing widely from one agent to another. So, to say what is "typical" isn't really a good question because it assumes some type of standard exist, which it doesn't.
Per the US Department of Labor Bureau of Labor Statistics (see web reference)
"The lowest 10 percent earned less than $20,170â€
I am sure, any Realtor who has been able to last in this business longer than 3 months would agree that the lowest 10 percent is most likely a representation with the most new agents.
Keep in mind, that $20,170 is Gross NOT NET! Just out of curiosity, I went back to look at my income tax statement for my first year back in 2003 and I netâ€™ed $14,000.00 while I grossed about $21,000.00. Slight above average so, once you take out your taxes, expenses, feeâ€™s, advertising, office supplies and whatever else you can imagine, chances are (statistically) you arenâ€™t going to gross more than $20,170.00 and net much less.
I was hesitant to start in real estate also. I became a Realtor in November 2006, and had over $1 million in sales my first year in the Dayton, Ohio area. It all comes down to how much time you invest and which agency you choose. I chose an agency that invests in the Realtors, and offers the best commission splits. Another reason I chose my agency is because they actually give me leads - buyers and sellers that are referrals from other Realtors, corporations relocating their employees, or people that request information from our agency website online. I'm proud to work for the #1 agency in Ohio and I'd love to email you more information. Please contact me today, and I hope you decide to become a Realtor - it's a blast!
Christina Asad Edwards, REALTOR
2006 & 2007 Sales Masters Top Agent
mobile or text 937-205-4741
Real Living Realty - #1 in OHIO!
Realty, Mortgage, Title, Relocation
But, If you still want to pursuit a Real estate career, make sure that you have at least one year of savings to support yourself. If you do, then have fun learning as much as you can from the business, network a lot and you may be prepared and ready to maximize profits from the Seller's cycle in er... Around two years?