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How Much Do Real Estate Agents Make?

Discussion in 'Small Business' started by 2FAST4U, 15th Jul, 2015.

  1. 2FAST4U

    2FAST4U Well-Known Member

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    I attended a seminar last night for Ray White and they said if you’re looking to get into real estate to make a six figure salary don’t bother. I know it varies based on commission but I always thought they made pretty good money. Or is it location dependent?
     
  2. D.T.

    D.T. Adelaide Property Manager Business Member

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    It's pretty funny they'd say that. If it was my franchise/agency, (and assuming I employed any sales staff), i would have said "if you don't think you can reach 100k pa, don't bother". See the difference in effect that has? I'd want ambitious people.

    In Adelaide, median house price is say $425k. Lets say they charge 2% commission. That's $8500 and probably have to split part of that with their principal. One of those a month is $100k, but remember need to split off part to principal depending on their individual arrangement (varies a lot).
     
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  3. Chilliblue

    Chilliblue Well-Known Member

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    It depends on what you do in real estate. Commercial agents normally make significant more money than their residential counterparts.
     
    Last edited: 15th Jul, 2015
  4. Be Developer

    Be Developer Property Developer Business Member

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    @2FAST4U

    really depends on location, and commission arrangements.

    known agents that barley makes 70K and some makes around $500k a year!
     
  5. 2FAST4U

    2FAST4U Well-Known Member

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    The night was run by Ray White managing director Nick George. He did say that the best agents make up to 3x as much as the average rate but he never mentioned what the average rate was. I think he made the 100k comment because he was explaining how Ray White has an 80% retention rate with their agents, whilst most other companies in the industry suffer high turnovers. He also said not to expect to get paid ‘good’ money for at least 3 years since it was about building up a client base etc. Being a REA isn’t for me but it was interesting to get an insight into it.
     
  6. Big Will

    Big Will Well-Known Member

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    Depending on the market lets take 500k is the meidan house price.

    2% commission is 10k commission

    20% (2k) goes to the listing agent, 20% (2k) goes to the selling agent and 60% (6k) goes to the office for marketing, admin, profit.

    Some will change the weight to be 25% list 15% sell... Rarely would there be a bonus e.g. 5% for list an sell (total 45%).

    If you list and sell each property to make 100k a year you need to sell 25 properties a year or 2 per month on average. It is more like 3 per month as you cannot guarantee you will list and sell every property you list.

    Even if you look at 1M properties the commission will be less maybe 1.5% or some even at 1%. You can even find agents that will do 1% at 500k.
     
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  7. Darlinghurst Boy

    Darlinghurst Boy Well-Known Member

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    :)I find they are cut throat towards each other here in Sydney City.
    Even they are so desperate to sell my property near Oxford Street the young real estate agent climbed 10 floors to reach my door after the lifts stopped.
    "Hi darling" he panted as i opened my apartment door wondering who the hell it could be.
    I actually met him at a inspection I went to..he was from Belle property group...young anbitious goodlooking willing to go that extra mile.
    No I didnt list my apartment with him despite his boyish smile and goodlooks.
    One of them had all black leather gear on..tight leather pants with butt cutt offs. and black leather cap..i should tell anyone that diesnt know that Oxford street is Sydneys Gay Capital .they even advertise locally here in the gay press that Adam & Steve are willing to go that extra mile to sell your property and they will certainly be bending over forwards to get you the best price !!

    I was talking to a real estate agent in City yesterday who was new. .he got a base salary plus commission and 8 days sick leave a year.
    Your expected to work 6 days a week if you dont sell they soon pss you off.
    In this climate its probably easy to sell..just the hardest is getting the listings.
    You may think its easy but imagine being a agent in Wilcaania..Walgett..or Moree and Muswellbrook..there you will have to kiss everyones ass just to get a sale,even Adam and Steve would lag behind there.

    A few years ago i was talking to a guy whose son was working for John Mcgrath real estate and he had apparently gained weight during his annual leave and they required him to lose it on his return .
     
    Last edited: 15th Jul, 2015
  8. RPI

    RPI Property Lawyer, Town Planner Business Member

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    My best referring agent (that is agent not agency) sent me 71 conveyancing clients last calendar year, that is she and her assistants working within a branded firm where there are multiple other agents working. 20 years in the game and this is in Brisbane and they had multiple sales that were above the 1.5m.

    The good agents have
    1. A PA (offshore)
    2. 2 or 3 people in their team assisting them

    So that they can do the hard part, get listings.
     
  9. Bayview

    Bayview Well-Known Member

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    It's not all beer and skittles, and I remember our first IP purchase was from a middle-aged lady r/e driving a crappy old Camry...and agents are the first folks to drive too much car for their income as we know.

    To give you an example of (bad) how it can be; I worked for a local franchise R/E down our way for a grand total of 3 months...did the R/E Rep course and all that.

    It was over the summer - in a holiday destination more at the "higher end", just near the end of the boom back in 2002. So, you reckon you'd sell a house or two?

    I only lasted 3 months because we had 2 IP's by this time, and over that 3 months our entire office sold a grand total of...NONE.

    Not one property across 3 sales people - me, the Boss and his wife who was also a Director. And we were quite busy - lots of enquiries and plenty of listings, but couldn't close any of the gaps.

    I had to leave because we (my wife and I) were going broke.
     
  10. Jamie Moore

    Jamie Moore MORTGAGE BROKER - AUSTRALIA WIDE Business Member

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    It varies so much.

    I know of some that pull in half a million p.a and others that hardly get by. I've seen some enter the industry and do really well whilst others give up within a few months.

    Location would also help a lot - it's commission based on sale price.

    Cheers

    Jamie
     
  11. D.T.

    D.T. Adelaide Property Manager Business Member

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    And also volume as well, which is probably governed by current market phase.
     
  12. 2FAST4U

    2FAST4U Well-Known Member

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    Maybe that explains why the majority of the agents around Elizabeth are shockers:D
     
  13. Pistonbroke

    Pistonbroke Well-Known Member

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    Agents are a poorly remunerated lot. Comms should be double or treble of what they're getting. If you consider that they can hit the ground running after completing a rudimentary course & get rolling virtually the next day.

    They put up with liars, cheats, bull artists, wand wavers etc (& that's before leaving the office ).

    Having to meet sales and listing targets.
     
  14. sanj

    sanj Well-Known Member

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    some make heaps, some make bugger all and a fair few make an average amount.

    surely this isnt surpriising? would be the case in many industries that are predominantly commission based
     
  15. D.T.

    D.T. Adelaide Property Manager Business Member

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    Disagree with this. It's the same as any industry. The top ones do really well, the ok ones do ok and the failures fail. They all get what they deserve in the end.

    Same as above i guess.
     
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  16. Pistonbroke

    Pistonbroke Well-Known Member

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    @D.T. How can anyone believe that someone with one day's training is worth $X00,000?
     
  17. D.T.

    D.T. Adelaide Property Manager Business Member

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    It isn't one day's training. They also have to do ongoing professional development.

    Similarly to what you're saying, how can anyone believe that someone with 7 yrs training (university) is worth $zero? Simple, people either know how to network with others to get where they want, or they don't.
     
  18. sanj

    sanj Well-Known Member

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    it's performance based, which is the ultimate leveller surely? if you sell the required numbers to make the money then youre worth it. if u dont then youre not.

    i dont have official qualifications or training in what i do either
     
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  19. Corey Batt

    Corey Batt Finance Strategist Business Plus Member

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    Some can turn a $1mil a year, others 30k - just like every other sales role.

    Commission splits + leads determine the equation a lot, but there's no loyalty in the industry so you can shuffle your way to the top (or build your own brand).
     
  20. 2FAST4U

    2FAST4U Well-Known Member

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    They need to have a Cert IV and go through ongoing training.
    With Ray White they work as sales associates for up to 18 months until they establish a client base and than after that they can work on their own. Of course there are a lot of other companies where people might just be pushed straight into agent roles as soon as they are certified, which is probably where the high turnover comes from since it's a sink or swim environment.

    Like D.T said the time doing something doesn't necessarily relate to the compensation. I spent 4 years studying at uni and only make marginally more than a factory worker because my skills aren't neccessarily in demand (oversupplied market). Same with a lot of scientists and recent IT/Commerce graduates.