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I think you'll find the highest paid agents are all on HGTV...just my humble opinion. Although an agent in my office closed on a $2MM deal the end of December. It was listed for $2.5MM. He had both sides at 7% on 100% comission plan. Sweet way to end the year.
This is from Realtor.org back in 2006. I bet it is even less this past year.
....REALTORS® who’ve been in the business for two years or less earned a median of $15,300, while those with three to five years of experience earned $44,200, according to the survey. For six to 15 years, the median was $64,600, while members in the business for 16 years or more earned $76,200.
“Since most agents work on a commission and become successful over time through training, repeat business and referrals, income in those early years can be quite lean as agents establish themselves,” Bishop says.
Income was significantly higher for members who are licensed as brokers; these REALTORS® earned a median of $73,700, compared with $34,600 for salespeople, the survey shows.
My income steadily increased the first few years of full time real estate, I did have a couple of years of lul. With the economy the way it is now I mostly see lookie loos. I think most people are waiting to see what happens with the economy. Not even the properties we manage are moving very well.
The comments posted are correct. The difference between net and gross is huge. A real estate agent is self employed. I don't think that most people understand that. The cost of suppies, computers, advertising, etc. is usually paid in full by the agent. In addition to splits of commissions most offices charge desk fees to defray the overhead cost of the office. All this plus the agent must pay self employment taxes. It's not a bad business, I enjoy it! But many agents fail within their first year because they underestimate the time and money needed to start a business.
Interesting thread. My question is this - is the difference between gross and net taking into account the tax writeoffs one gets? In other words, are the "net" numbers in this thread before or after the tax deduction one can take for spending money on their own business?
One other question - I'm curious how many agents here have a home office they write off on their taxes.....
how common it is to make over $50k. $100k. $200k. More?
Not common.
It's easier to ask the question in terms of gross production, then extrapolate backwards to net income. For most "producing" agents closing $2M-$5M in sales, net income will be around 43% of GCI (Gross Commission Income). This number is a result of a lot of study by Gary Keller before writing the Millionaire Real Estate Agent book.
So, if you want to earn $75K net annual income, before taxes and insurance, you'll need to generate about $175K in GCI. Assuming an average of 2.5% commission, you'd need to generate $7M in closed sales annually.
Assuming an average sales price of $250K, for example, you'd need to close a transaction every two weeks, or 28 per year. Change the math based on the average sales prices in your area.
A small percentage of agents ever close 28 transactions, period, much less in one year. It's a tough business and it chews people up and spits them out with impressive consistency. Still, the newbies come in droves, like lemmings, through the real estate schools. Most will become disheartened sooner than they imagined. Other remain in denial long after they've proven themselves incapable. A few will soar and have great careers.
And there is no reliable way to predict in advance which ones will flounder and which will make it. Interesting, isn't it?
It's easier to ask the question in terms of gross production, then extrapolate backwards to net income. For most "producing" agents closing $2M-$5M in sales, net income will be around 43% of GCI (Gross Commission Income). This number is a result of a lot of study by Gary Keller before writing the Millionaire Real Estate Agent book.
So, if you want to earn $75K net annual income, before taxes and insurance, you'll need to generate about $175K in GCI. Assuming an average of 2.5% commission, you'd need to generate $7M in closed sales annually.
Assuming an average sales price of $250K, for example, you'd need to close a transaction every two weeks, or 28 per year. Change the math based on the average sales prices in your area.
A small percentage of agents ever close 28 transactions, period, much less in one year. It's a tough business and it chews people up and spits them out with impressive consistency. Still, the newbies come in droves, like lemmings, through the real estate schools. Most will become disheartened sooner than they imagined. Other remain in denial long after they've proven themselves incapable. A few will soar and have great careers.
And there is no reliable way to predict in advance which ones will flounder and which will make it. Interesting, isn't it?
Steve
Well spoken!
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